AIB's egg-straordinary General Meeting

This morning the Allied Irish Bank (AIB) held an Extraordinary General Meeting (EGM) of its shareholders, in order to vote on the acceptance of € 3.5 billion re-capitalisation money from the Irish government, which means in effect from the Irish taxpayers.

This EGM preceded the bank's regular AGM (Annual General Meeting), which took place in the afternoon, and was supposed to be "a short, but necessary event". That, at least, was the plan of the AIB's board of directors, who have presided over one of the most spectacular bank busts in economic history. Over the past two years AIB stock lost more than € 20 billion in value. In 2007 a single share was traded at more than € 24, but in recent months the value has been rarely much above € 2 and even fallen below € 1. AIB's share price fell again by 13% yesterday, and by a further 14.63% today, closing in Dublin on a mere 88 cents.

With such a disastrous performance, which sank not only the bank, but contributed significantly to the wrecking of the entire Irish economy, one would expect that the complete board of AIB and its senior management team would be sacked on the spot, and without 'golden parachutes' and fat pension packets.

But this is Ireland, and here big criminals always get away, especially if they are white-collar crooks and government friends (while many poor people are sent to prison for - in comparison - petty offences). And although AIB's Chairman Dermot Gleeson (left) and the unbearably arrogant Group Chief Executive Eugene Sheehy (right) have eventually decided to resign, they will go with millions in their pockets and live their lives as very rich pensioners.

At the EGM this morning, Gleeson made at least a weak attempt of atonement when he verbally apologised "for the mistakes that have been made". He might as well have saved his breath, as the statement was insincere and clearly a rehearsed performance.

The more than 800 shareholders, who attended the meeting in the AIB banking centre* in Dublin, were not impressed and not at all pleased. In fact, they were angry. Very angry.
After Gleeson's formal statement, dozens of individual shareholders rose from the audience and voiced their anger and disappointment. Many attacked the AIB board in no uncertain terms, and most demanded a complete removal of all directors. A large number of the shareholders who spoke were elderly and said they had lost huge amounts of their retirement income.

The atmosphere was heated (see the large photo above), and no matter how much Gleeson and Sheehy tried to weasel themselves out of the situation with meaningless words, the shareholders from the floor were definetely clear winners of the debate.

One of them, who identified himself as Gary Keogh (aged 66) from Blackrock in Dublin, was so outraged that he threw two eggs at the board. One of them narrowly missed Eugene Sheehy, but the other spilled a good bit of its natural substance over Dermot Gleeson's expensive suit when it hit the stage wall.

Gary Keogh (left) was swiftly escorted from the meeting by AIB security staff, but he had done what he had come for and did not intend to stay longer anyway.
Outside the banking centre Mr. Keogh became an instant darling of the Irish media. Surrounded by reporters, he gave more than ten spontaneous interviews for newspapers and radio stations.
And then, at 1.45 pm, Gary Keogh was also the first speaker on the popular phone-in programme Live Line on RTÉ Radio 1, hosted by Joe Duffy.

He said that he had planned his direct action "for about two weeks" and explained that he had lost nearly € 20,000 in the AIB collapse, money he had specifically invested to provide him with a retirement income, "because we were told that bank shares were blue chip stock and as safe and solid as gold".
Now these shares, from whose dividends Mr. Keogh had planned to augment his pension, are almost worthless and payment of dividends has been suspended "for the foreseeable future". It is very unlikely that they will rise to significant heights again in Mr. Keogh's lifetime.

After his courageous and very symbolic action, Gary Keogh is tonight Ireland's hero of the day. There is not one house or pub in the country where people are not talking about him, and many will be drinking to his health.

I don't know if he came up with the idea of using eggs all by himself, or if he was perhaps inspired by the 'Eggman of Cork', who had pelted the façade and windows of the AIB main office in Ireland's second-largest city in February with about three dozen eggs and remains so far unidentified. (for details see my entry of February 20th)

After this morning's egg-straordinary incident, a brief interruption (during which the Chairman tried desperately to clean his suit) and many more angry and emotional statements from the floor, AIB shareholders voted by an overwhelming majority for the re-capitalisation of the bank with € 3.5 billion of taxpayers' money.
In return for the cash injection AIB has allotted the agreed number of preference shares to the Irish government.

When in the afternoon - after lunch (and a change of clothing for Dermot Gleeson) - the regular AGM got underway, the board was subjected to more criticism and emotional statements from angry shareholders.
However, the ownership structure of most large companies and financial institutions makes it impossible for individual shareholders to exercise any of their stutuatory rights, except the right of speaking at AGMs and EGMs.
Institutional shareholders, especially pension funds, control large amounts of shares and are the real forces in charge of banks and major companies. Their one and only interest is a rising share price, and thus they always vote in favour of anything the board proposes. (This has created a corrupt 'golden circle' of large corporate shareholders who vote for each other at various AGMs.)

It is thus no surprise that this evening AIB shareholders voted to return all the bank's current directors to its board. This alone is a scandal, and I hope that more people will do what I have already decided last Autumn: Never do any business with AIB. (And if you are a customer of theirs, then change your bank!)

The Emerald Islander


* It is an interesting footnote to the AIB collapse that the banking centre in Ballsbridge, Dublin (where today's meetings were held) is no longer owned by AIB. At the height of the boom, when the bankers were gambling madly and throwing money around in the most reckless way, the bank's board decided to sell the landmark building to a group of private investors and then rent it on a long-term contract from them. This is pretty stupid and shows how incompetent AIB has been run over many years. But what really takes the biscuit is the fact that AIB was first lending these private businessmen the money with which they were then buying the banking centre. I presume a six-year-old in primary school would have better skills in basic mathematics than the entire AIB board combined. In the olden days people who would have behaved so unbelievably idiotic and reckless would have been taken out and shot. But nowadays we don't even sack them. No, we re-elect them to carry on with their mismanagement, while a couple of scape goats are told to retire - on pension packages worth millions. Perhaps a revulotion might be required after all...