AIB returned to Mr Charles Haughey the sureties held against his outstanding debt of £110,000 despite the fact the sum was never repaid, the tribunal heard yesterday.
Mr Brian Sheridan, the bank's law agent, said the sureties, which were to have been kept until debt was cleared, were returned to Mr Haughey's solicitors in February 1990. He said, however, that the bank had no record of an agreement to return the documents, which included title deeds for Inishvickillane Island, letters of guarantee and shares.
Mr Jerry Healy SC, counsel for the tribunal, said AIB had confirmed the £110,000 was never paid.
The bank has denied seeking any advantage from Mr Haughey over his debt. It said the settlement, under which AIB wrote off more than £350,000 of Mr Haughey's debt, was "commercially justified".
In a statement, the bank said it "sought no advantage or favour arising out of the indebtedness to Mr Haughey's account and indeed exerted considerable pressure on the debtor to compel him to deal with his affairs when it could be said that he had reached the apex of his career, having just become Taoiseach."
The statement, written by Mr Sheridan, added: "AIB believe the compromise is commercially justified having regard to the protracted and difficult history of the accounts, to the fact that it was extracting itself from them and was to have no further dealings with the affairs of Mr Haughey."
In relation to the sureties, Mr Sheridan said that on January 21st, 1980, AIB held the following against Mr Haughey's debt: (1) a deed of charge over the Abbeville lands and residence; (2) title deeds and certificates for about eight acres of land acquired at Abbeville shortly before 1980; (3) a letter of guarantee for £350,000 from Mrs Maureen Haughey from 1977; (4) a letter of guarantee for £40,000 from Larchfield Securities Ltd dating from 1974; (5) title deeds for Inishvickillane Island, Co Kerry; (6) title deeds for 12 acres of land in Co Sligo owned by Larchfield; (7) a Norwich Union life policy valued at £1,000 dating from 1954; (8) 5,765 shares of £1 each in Printer Press Ltd; and (9) a letter of guarantee for £500 from Henry James Boland dating from 1956.
Under the settlement, the bank was to return the charge on Abbeville and the title deeds relating to other Abbeville lands, as well as to cancel the letter of guarantee for £350,000, once Mr Haughey had paid £750,000 of his £1.14 m debt.
The other securities were to have been retained until the settlement balance of £110,000 was repaid.
On February 14th, 1990, after the last of three payments totalling £750,000 had been made by Mr Haughey, AIB released the charge on Abbeville. Land certificates were returned to Mr Des Traynor, Mr Haughey's accountant, on December 17th, 1971. The other sureties remained with AIB until February 14th, 1990, when they were handed over to Mr Haughey's solicitor, Mr Michael O'Connor.
