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Thread: ICI.....History Repeats itself....

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    Default ICI.....History Repeats itself....

    Ernst & Whinney (now Ernst & Young) reached an out-of-court settlement for $118 million with AIB Group, Ireland 's largest bank and administrator of the Insurance Corporation of Ireland. AIB accused Ernst of negligence when the bank discovered that an insurance company, audited by Ernst, that it had purchased just 12 months previously faced serious and unexpected losses on its underwriting business.

    Now if the auditors were guilty of negligence in this case how on earth can they not be guilty in what seems a far far more straightforward case in respect of Anglo Irish Bank.?

    People should read the Dail debates and aftermath on the ICI scandal to see that the government has learned nothing. Fianna Fail opposed the ICI bailout on the following grounds...'the taxpayer should not carry the burden of losses made by a private company'. Yet over 20 years later Fianna Fail does exactly that for amounts that make the ICI figures look like petty cash.

    One hope...if the auditors were made carry some of the can in 1985 why not now?

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    Politics.ie Member Sync's Avatar
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    Because the mandates were completely different. If I hire you to check my tyres and my tyres blow up after I leave the garage I've got a case for negligence. If I hire you to change my oil and my tyres blow up after I leave then I can complain that as a professional you should have noticed, but nothing more.

    In the 80s Ernst were contracted to be involved in the due diligence of the purchase, and were alleged by AIB to have failed in that capacity, allowing their pre-exisiting interest in ICI to colour their work, as it was alleged they had been ignoring certain elements in their role as auditors (surrounding the underwriting business). Now sure it raised the question as to whether Ernst was the right group to pick for the DD, but there you go. Your source is wrong though, the final figure paid out was £70 million. About half of that went directly to the administrator, and AIB are still paying around 9 million a year to the same administrator.

    In Anglo, the auditors did their job according to the board approved mandate, as they were required to do. I haven't seen any credible accusation to the contrary.

    ICI is a critical incident though, it perfectly highlighted why Ireland should have been at the forefront of efforts to correctly regulate the internal market instead of allowing the banks to run wild, effectively unsupervised.
    Last edited by Sync; 12th October 2010 at 12:46 PM.
    I'm living in America, and in America, you're on your own. America's not a country. It's just a business. Now f***ing pay me.

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    Staggering gombeenism.

    We saved the largest financial insitution in the State in 1985 with less than 100m (which in turn was more than easily repaid so the final bill was zero) and that institution went on to provide probably 10s of billions to the exchequer over the next 20 years and some of the biggest advocates of the current 60 billion bail out opposed it.

    No doubt Ahern in his Anorak pomp days was very vociferous in his opposition, that's if he wasnt doing "real FF" business for Haughey and Burke et al at the time.

    25 years later some of the same apes (Cowen and Ahern chief of all) asking for national unity on a tax payer tapping 600 times greater with no conceivable chance of ever getting it back.

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    Quote Originally Posted by Sync View Post
    AIB are still paying around 9 million a year to the same administrator.
    Yes, although my understanding is that the AIB's payment is due to end in 2012/3 - as compared to the ordinary schmuck, who will still have to pay 2% of each non-life insurance premium until the end of time. A "temporary" levy which was surrepitiously converted into a permanent Stamp Duty in 1996.

    Irish Examiner - 2002/01/18: Temporary insurance levy still paid 17 years later

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    Politics.ie Member roc_'s Avatar
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    Quote Originally Posted by Oldira1 View Post
    ...the government has learned nothing...
    You're right. It seems we learned nothing.

    But from the start, every action undertaken by the government and the establishment was carried out to this end. Why? - Because the truth and the acknowledgement of massive error and fault would reflect badly on themselves. And THEY were not only complicit - in many ways they were indeed the instigators.

    I mean, just look at this article from the Tribune last weekend - INBS in drive to increase mortgage lending by 700%

    Since we seem incapable of learning, we will fail to adapt. Thus we can only go the same way as the dodo bird. Looks like it's going to be a painful ride there.
    “Words are animals, alive with a will of their own”.

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    Politics.ie Member Sync's Avatar
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    Quote Originally Posted by roc_ View Post

    Since we seem incapable of learning, we will fail to adapt. Thus we can only go the same way as the dodo bird. Looks like it's going to be a painful ride there.
    Sure. We keep electing the same type of people, so we get the same kind of results. It's no point blaming a rat for eating the cheese when you're the one that put him in the fridge. Someone on another thread recently mocked protesters saying

    "What do we want?"

    "The cake we ate!"

    "When do we want it?"

    "Now!"

    It's very accurate.
    I'm living in America, and in America, you're on your own. America's not a country. It's just a business. Now f***ing pay me.

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