Follow @PoliticsIE
 
 
 
Page 1 of 2 12 LastLast
Results 1 to 10 of 17

Thread: Depfa may sue Irish directors, Ireland's reputation on the line

  1. #1
    Politics.ie Member cyberianpan's Avatar
    Join Date
    Jan 2006
    Location
    Wherever I can see
    Posts
    16,729
    Mentioned
    0 Post(s)

    Default Depfa may sue Irish directors, Ireland's reputation on the line

    Depfa in the IFSC was a very peculiar bank. It was only here for tax dodge & low regulation - it;s business remained in Germany. The German authorities were never happy about it. Our Financial Regulator... well dodged regulating it.

    Irish Times

    GERMAN LAWYERS investigating the near-collapse of the Hypo Real Estate (HRE) group are considering legal action against former board members of its Dublin-based subsidiary, Depfa plc.

    Former directors of Depfa include ex-Central Bank head Maurice O’Connell and Frances Ruane, director of the Economic and Social Research Institute.

    They could find themselves dragged into a bitter legal battle between Depfa parent Hypo Real Estate (HRE) and Georg Funke, its former chief executive and a former Depfa director.

    “We are examining compensation suits against the entire boards of Depfa and of Hypo Real Estate,” Detlef Bauer of Gleiss Lutz, legal counsel to HRE, told The Irish Times.

    Many of the risky activities carried out by the Dublin-based bank that brought HRE and Germany’s financial system to the brink of ruin last year took place when several prominent Irish businesspeople sat on the Depfa board.
    ...
    The final rescue package cost €102 billion in loans and guarantees and was followed last year by full nationalisation.
    ...
    As well as “gross negligence” in preparation for the Depfa purchase, HRE lawyers accuse Funke of presiding over faulty risk management procedures and “numerous breaches of Irish banking regulatory law” by Depfa.

    The Irish Financial Regulator imposed a fine of €250,000 on Depfa ACS Bank, a subsidiary of Depfa plc, on December 16th last.

    A German source claimed that the breach only came to light when Depfa itself approached the regulator....

    Prior to any sense of global crisis the IFSC's & our regulatory system's reputation was on the line:
    Indo 2005 : Taming the wild west

    With an investigation by New York district attorney Elliot Spitzer into the activities of a Dublin-based subsidiary of insurance giant AIG, the Cologne Re kerfuffle was stunningly bad news for the image of Dublin's financial district. The regulator took a raking. The hugely influential New York Times rowed in to label the IFSC as "the financial wild west".
    And there's been plenty of press in Germany on our poor regulation over the years, e.g. as evidenced here:
    Irish Times June 2009
    Even more damaging to its future health has been the degree to which its reputation has been called into question by problems at German banks Sachsen LB and Depfa Bank, and the regulatory approach – or the lack thereof – that the Financial Regulator has adopted to the sector. Coming on the back of reports that Ireland is the “wild west of European finance”, the latest attacks on the integrity of the IFSC may do more lasting damage.

    Germany has never been a supporter of the IFSC, and while it continues to question regulatory oversight in Ireland, it is the UK which is emerging as its most vehement critic. Lord Oakeshott, a British treasury spokesman and managing director of investment management company OLIM, described Dublin as a “Liechtenstein on the Liffey”, claiming it “aggressively chases footloose financiers and less scrupulous British companies to move to Dublin to dodge tax”.
    Now much of the IFSC is good, we're one of the top three places in the world for Funds Administration (and contrary to what many thing, Funds Administration is a complex , challenging & well paid job). However chunks are the IFSC are just shell games, who need directors. In Ireland our native pool of directors is of shockingly low quality.

    This scandal threatens not only the IFSC, but would also threaten Ireland's low tax status... and it comes at a time when we desperately need brownie points , especially from Germany, in order that we get the aid & understanding required to recover.


    cYp
    "Yawn , am I alive yet ?"

  2. #2
    Politics.ie Member southwestkerry's Avatar
    Join Date
    Aug 2008
    Posts
    4,207
    Mentioned
    0 Post(s)

    Default

    Every Country has its closets and in said closets are what we fondly call skeletons... shame we cant hide ours better though.
    A ship at harbour is safe but that is not what ships were built for.

  3. #3
    Politics.ie Member
    Join Date
    Jul 2006
    Location
    Somewhere between Akureyri and Ushuaia
    Posts
    8,999
    Mentioned
    0 Post(s)

    Default

    Lichenstein on the Liffey. But I'm sure that certain well connected (to FF of course) individuals do very well out of the IFSC. Of course the guy who promoted it to CJH in the first place assumed that every transaction would be kosher. In the words of that great Dub Roddy Doyle, Ha Ha Ha.

  4. #4
    Politics.ie Newbie
    Join Date
    Jun 2006
    Location
    Dublin
    Posts
    86
    Mentioned
    0 Post(s)

    Default

    The Lichtenstein on the Liffey comment was made by a treasury spokesperson and therefore, must be taken as a political statement and is not analysis. The "unsrupulous" British companies he describes includes some of Britain's largest PLC's.

    This reminds me of the archives release yesterday which documented the British disgust in the seventies at Jack Lynch's proposals to reduce corporation tax to 10%. Meanwhile, Britain was paying £100k per job to bring investment to the North which Ireland could not compete with.

    The phrase "They don't like it up em" springs to mind.

  5. #5

    Default

    Some of the figures from within the IFSC in relation to the low level of employees are mind boggling. It is the Financial whorehouse of Europe.
    “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” - Friedrich A. Hayek

  6. #6
    Politics.ie Member
    Join Date
    Jun 2004
    Posts
    232
    Mentioned
    0 Post(s)

    Default

    Quote Originally Posted by Cassandra Syndrome View Post
    Some of the figures from within the IFSC in relation to the low level of employees are mind boggling. It is the Financial whorehouse of Europe.
    well, they outsouce to exixting service providers who have lots of employees -- eg if I want to start a small finco why not pay AIB 100k a year to run it etc

    that said the depfa story is shocking and people should think twice of becoming non execs

  7. #7
    Politics.ie Member Digout's Avatar
    Join Date
    Oct 2008
    Location
    at the bar, where the sock puppets are
    Posts
    1,396
    Mentioned
    0 Post(s)

    Default

    Quote Originally Posted by Cassandra Syndrome View Post
    Some of the figures from within the IFSC in relation to the low level of employees are mind boggling. It is the Financial whorehouse of Europe.
    Your spot on there, no doubt a lot of "hot" money lives there also. When I worked in the City of London all the real bankers there used to laugh at the IFSC, banks could get fully trained accountants to work as "fund monkeys" for €30k a year, after a few years at that, the poor lads are stuck in the business. FF went around spinning that the IFSC was some kind of financial centre, but people who know what they are talking about think its more of a kinder garden.

  8. #8
    Politics.ie Member cyberianpan's Avatar
    Join Date
    Jan 2006
    Location
    Wherever I can see
    Posts
    16,729
    Mentioned
    0 Post(s)

    Default

    Quote Originally Posted by Digout View Post
    Your spot on there, no doubt a lot of "hot" money lives there also. When I worked in the City of London all the real bankers there used to laugh at the IFSC, banks could get fully trained accountants to work as "fund monkeys" for €30k a year, after a few years at that, the poor lads are stuck in the business. FF went around spinning that the IFSC was some kind of financial centre, but people who know what they are talking about think its more of a kinder garden.
    Your ignorant anti-Paddyism shines through as ever

    A significant number of people in investment bank front offices tend to sneer at the middle & back offices, that says more about them than anything else.

    The rates of pay for fund administration here have gone up by quite some amount over the years -

    The Panel Salary Survey 2009 (i.e. FY 2008)
    Code:
    Graduate/Administration                     €24K €28K
    Administrator 1-2 years                      €25K €33K
    Senior Administrator 2-3 years            €30K €38K
    Supervisor                                         €35K €45K
    Assistant Manager                             €45K €60K
    Manager                                            €55K €75K
    Group Manager/Senior Manager           €70K €90K
    Head of Trustee/Compliance/Custody   €95K €140K
    Also that above suvrey leaves out client relationship management, and I know plenty there with limited responsibilities on €150k+. Furthermore certain legal people are on €300k+. That said the typical "fund accountant" has a pretty unexciting role.

    And if you're really so concerned companies such as Susquehanna have substantial front office presence here and in Dublin their employment spans traders, algorithmic trading coders etc.

    cYp
    "Yawn , am I alive yet ?"

  9. #9
    Politics.ie Member cyberianpan's Avatar
    Join Date
    Jan 2006
    Location
    Wherever I can see
    Posts
    16,729
    Mentioned
    0 Post(s)

    Default

    Quote Originally Posted by diablo View Post
    The Lichtenstein on the Liffey comment was made by a treasury spokesperson and therefore, must be taken as a political statement and is not analysis. The "unsrupulous" British companies he describes includes some of Britain's largest PLC's.

    .
    Indeed ... and if this whole case goes to court, thus exposing Ireland's shoddy regulation... it is political pressure we'll be under

    The Germans in particular don't like the IFSC (they have a peculiarly co-operative relationship between their banks & regulator(s) )

    With Ireland needing bailouts.... with EMU faltering.... with the events in Depfa Dublin having caused global ripples ... we'll come under great pressure to homogenize (i.e. better regulation and they may take a pop at corporation tax)

    cYp
    "Yawn , am I alive yet ?"

  10. #10
    Politics.ie Member
    Join Date
    Jan 2006
    Location
    Left of Centre
    Posts
    276
    Mentioned
    0 Post(s)

    Default

    Agreed with previous comments that there is a lot of good financial services in the IFSC, however there is some dodgy stuff as well.

    Interesting piece in Fintan O'Toole's book about Depfa, he suggests that we were very lucky that Depfa was taken over in Sept 2007 by Hypo Real Estate, because if they hadn't Depfa would have been an Irish regulated entity and it would have been Ireland.....(well could we have afforded it) that would have had to come up with the €100bn to clean up the mess created and not the Germans. I don't know the ins and outs of this, as they were here solely for tax purposes probably unlikely that Irish Govt would have done so, (even if we had this money) was still effectively a German bank so the Germans would still have had to come to the rescue. What do others think?

    Obviously the type and nature of regulation of what happens in IFSC is very different from domestic banks, but it would appear to me that regulation down there will have to be enhanced. Yes we may lose business as a result, but the reputational risk for Ireland and other entities down there and of course the potential costs of cleaning up a mess created by rogues there makes it virtually inevitable.

    Well the 13 Directors in Depfa paid themselves well....€34m in 2004, obviously most of this went to the executive directors, but the non-execs must have been on six figures sums. Directors of Depfa bank get €34m pay package - The Irish Times - Mon, Oct 10, 2005
    Corporate Governance in Ireland is very poor, that will have to be enhanced as well, most as has been said here before were only on the board to meet eu rules on residency.
    Quimby can't be trusted-Vote Sideshow Bob for Mayor http://www.youtube.com/watch?v=HXBDEPr9P9k

Page 1 of 2 12 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •