In a recent development, The Bank of Ireland has deferred a payment of approximately €15 million that was meant for the former shareholders of Davy Stockbrokers – the country’s leading securities company. The bank has already transferred over €75 million to Ailmount Investments, which is controlled by the previous shareholders of the securities organisation. The acquisition took place two years ago following a scandal concerning a bond sale within Davy Stockbrokers.
According to an agreement, a portion of the purchase price was postponed until this month. The Bank of Ireland remitted a substantial part of the deferred settlement to Ailmount, based on the set criteria that were met at that time. The total payment due to Ailmount per the 2022 sales agreement was approximately €107 million. It was reported last week that the bank has started legal proceedings against Ailmount and was considering delaying a €15 million portion of that amount. Of the full amount, over €10 million has been acknowledged by both sides for technical matters. The bank has remitted most of the remaining balance but has held back the €15 million as threatened.
The bank believes it has the legal right to withhold the amount due to the indemnification clauses included in the original deal. This is the second legal case between the two parties. Ailmount has also filed a commercial court suit against the bank alleging that it failed to make a payment related to the bank’s acquisition of the broker.
The Bank of Ireland’s purchase of Davy amounted to approximately €427 million, including the postponed €107 million. Nearly 60% of this amount was designated for former Davy employees, as reported in the Bank of Ireland’s 2022 annual report.
Davy was put on the market in 2021 following a record-breaking €4.13 million fine by the Central Bank for violating market regulations. The brokerage faced a scandal when it sold a client’s bonds to a group of 16 Davy employees without notifying its compliance team. The incident led to the bond desk’s closure and the loss of their main brokerage of Irish government bonds.