A prominent financial adviser has estimated that hundreds of investors in an ill-fated series of funds set up by AIB two decades ago still have not received adequate refunds or compensation from the bank.
Padraic Kissane, who is a member of the Irish Banking Culture Board, said he remains concerned that many of the 2,500 investors who put money into the failed UK commercial property funds have not had their cases dealt with correctly by AIB.
Speaking at a press conference in Dublin today, Mr Kissane said he had been examining the issue since November of last year after a number of clients asked him to assist them.
Mr Kissane claimed that in many cases, customers had invested their savings in Belfry funds.
"I am especially highlighting my concerns regarding the matter of customers who borrowed money to invest in Belfry and also customers who invested in Belfry through their pension plans," he said.
This is because the product was a "geared" investment, which tend to be riskier, he said.
He said the customers in the main were recorded as being "high risk takers" with their money, but he claimed this characterisation by AIB was incorrect in most cases.
He added that none of those he had spoken to had been told the investments were high risk and instead claimed they were presented as a "sure thing".
Mr Kissane, who represented many customers who were mistreated by the banks over their tracker mortgages, also described the paperwork as "sloppy".
He appealed to those who invested in Belfry funds, particularly those who put money into funds 5 and 6, or who had not been fully refunded their initial investment, to contact him.
The six Belfry Funds were marketed and sold by AIB from 2002 to 2006. Belfry Investment Fund 1 made a return of around 250%.
But the following five funds were caught up in the subsequent financial crisis and property downturn and the losses they incurred resulted in investors' money being wiped out.
In total investors had put £214m into the funds, with the minimum investment for an individual set at €80,000 and for a couple at €100,000.
Three years ago, AIB set up a case-by-case review to try to determine if a refund may be due to some investors.
It examined the suitability of the funds for investors by looking at their investment objectives, experience and financial position and checking if these were appropriately aligned to investing in the funds.
The lookback also examined whether the documentation provided to investors was clear.
99.8% of investors have received the outcome of their review, the bank said today, and where it found the investment may have been unsuitable, investors received a full repayment of their investment along with compensation.
In cases where the review found an error may have been made in the process, investors received 50% of their investment plus additional compensation, while where it concluded that the investment was suitable for the investor, no payments were made, AIB added.
Mr Kissane said investors in Belfry funds 2 to 4 had generally had their situation adequately corrected, although with exceptions.
"All investors had the right to appeal to an independent appeal panel and were offered a payment of €1,250 towards the cost of obtaining independent professional advice," AIB said in a statement.
"Investors already in receipt of payments retained those payments irrespective of the outcome of any appeal."
"The deadline to submit an appeal passed on 30 November 2023. For a small number of certain investors, the deadline to submit an appeal was extended."
However, that deadline of the end of January has now passed.
But Mr Kissane said time shouldn’t matter when it comes to correcting wrongs.
To date, AIB has set aside €233m to cover the cost of payments to investors, around €207m of which has been cashed.
