AIB 'Impropriety' In Carroll Loans

A senior judge has described as "astonishing" AIB's insecurity and flouting of good practice when handing over almost a billion Euro in loans to five companies formerly controlled by developer Liam Carroll.

During the hearing yesterday, High Court Judge Mr Justice Peter Kelly reacted to revelations that the bank had handed over the money with only a letter and the deposit of title deeds as security as "astonishing" and "extraordinary".

The judge also highlighted a series of errors whereby one of Mr Carroll's companies, Danninger, was identified as the owner of various properties when in fact it was owned by other companies within the Zoe group.

Mr Carroll has been locked in legal battles over the future of the Zoe umbrella group since last year as banks started to call in their outstanding loans with the developer.

AIB, as Mr Carroll's biggest lender, yesterday moved to protect its loans -- which are in default -- by securing court orders aimed at ensuring the strength of its security.

But given the vast sums involved that AIB's only security for the borrowings was letters of undertakings from a solicitors firm and the deposit of title deeds.

The bank's security was described by the judge as "fairly fragile" and "a far cry from a legal mortgage".

The judge told lawyers acting for AIB that it appeared from court documents that it had never inspected the title to the properties or conducted an investigation into the title.

(DW/GK)