Analysis: Séamus Sheerin's claims have refocused attention on the foreign exchange scandal that rocked AIB, writes Arthur Beesley, Senior Business Correspondent

AIB moved swiftly to dismiss new claims that responsibility for the foreign exchange scandal goes right to the top of the organisation. The bank has also denied claims that it is seeking to scapegoat a mid-ranking manager with responsibility for the affair.

Séamus Sheerin was sacked last Wednesday as head of the bank's strategic development unit after an internal disciplinary committee made findings against him on four grounds. The first official to lose his job over the debacle, he is refusing to go quietly.

When Mr Sheerin went to the High Court last Friday to protect a job that is worth €10,000 per month after tax to him, he drew some of the bank's most senior officials into the affair.

Most significantly, Mr Sheerin put outgoing chief executive Michael Buckley in the frame. He did this by saying that the Deloitte & Touche inquiry into the over-charging reported that one official - John O'Donovan, senior executive corporate and commercial treasury - believed Mr Buckley "was aware of this issue" when he was managing director of the bank's capital markets division.

There was more. Mr Sheerin also said Mr O'Donovan told Deloitte that he believed AIB's Republic of Ireland managing director Dónal Forde also was aware of the issue. In addition, Mr Sheerin said he told Mr Forde about the overcharging issue in September 2002, fully 20 months before the affair was first publicised.

Mr Sheerin also said the bank's UK managing director Aidan McKeon had "unresolved issues" in relation to the over-charging. He said Mr McKeon was "one of the original architects" of the over-charging and, therefore, should not have been the one to investigate his conduct

Such claims, if found to be true, would have devastating implications for the bank's top-tier managers. They have always denied knowing about the overcharging before the scandal burst into the open last May, so there was no delay with their retaliation yesterday.

AIB's law agent Bryan Sheridan said in an affidavit yesterday that Mr Sheerin's affidavit had taken Mr O'Donovan's remarks to Deloitte & Touche out of context.

He said Mr Sheerin did this by failing to mention the sentence immediately after Mr O'Donovan's remarks which said that "Forde and Buckley have stated that he (sic) did not have any such knowledge of the matter".

Mr Sheridan also said the issue referred to was not the foreign exchange affair.

Mr Forde rejected the claim that he was motivated by a desire to protect his own position in dealings with Mr Sheerin and was outraged at the allegations made against him.

"I am informed by Mr Forde and believe that he was never advised by the plaintiff either orally or in writing, whether on the occasions alleged or otherwise, of the foreign exchange notification discrepancy referred to by the plaintiff," said Mr Sheridan.

"Still less did was Mr Forde aware, no did he acquiesce in, or approve of, any course of action planned or adopted by the plaintiff for dealing with the matter."

Mr Sheridan said Mr McKeon took the gravest exception to the allegation that he was acting to scapegoat Mr Sheerin for the affair.

His decision to sack Mr Sheerin was reached fairly and properly, in compliance with the principles of natural justice.

Mr McKeon rejected as completely unfounded Mr Sheerin's claim that he was "directly implicated" in the overcharging and had "unresolved issues" in relation to the investigation. He had been based in Britain since January 1996, before the obligation to notify foreign exchange charges under the 1995 Consumer Credit Act came into force in August 1996.

"In fact, the only mention of Mr McKeon in the Deloitte & Touche report is as a person interviewed in the course of their work. He was not the subject of recommended disciplinary proceedings by the board committee," Mr Sheridan said.

Mr Sheerin's counsel said that while he was being sacked for not doing his job and for concealing his ineptitude, he maintains that he has an exemplary record.

Mr Sheerin claims to be the only individual within the bank to be singled out for such treatment. The bank denied this, stating that disciplinary proceedings against a number of other staff members were continuing.

Still, Mr Sheerin said in his affidavit last Friday that he was aware of only two other officials suffering any sanction as a result of the foreign exchange issue. He identified one of those as Mr Chris Drucker, who he said was appointed in 1994 as executive head of branch and treasury products, reporting to Mr McKeon.

Mr Sheerin made a point of saying that Mr Drucker had been penalised for his role in the foreign exchange issue by having his bonus frozen for two years.

The hearings yesterday were the second public act of the AIB's confrontation with Mr Sheerin. The case will be heard again on April 4th. Just days after the bank chose Eugene Sheehy to succeed Mr Buckley, the overcharging saga continues to cast a dark shadow over AIB.