Mr. Michael Howard:

The audit committee has taken a very serious view of that. There are a couple of general points that I would like to get across. Before I say anything else, in case I do not get an opportunity to say this, the audit committee has formally commended Niall Kelly on his work in relation to this. I think that I should say that. In approaching this, I cannot ignore the fact there has been some controversy and debate. I want to make it clear that Mr. Kelly was performing a task assigned to him by his employer. There is no question that he ever had any motivation other than to do that task impartially and objectively. Given the scale of the issue as it subsequently emerged, I devoted an enormous amount of time to this, way out of what one would normally devote as chair of an audit committee, to reviewing the work of the internal auditor. Niall Kelly was always completely open with me. I am satisfied and my committee is satisfied that the conclusions in his interim report are very firmly grounded on fact. I think I should say that before I say anything else.

I would, if I may, briefly skip through the narrative as it emerged from the point of view of the audit committee. In case anyone is a little unclear of the role of the audit committee, I am a retired civil servant. There are five people on the audit committee, a deputy commissioner who sits there permanently and four outside members, one of whom has to be chair. In addressing the members I want to say that the committee addressed this as an issue on which we had consensus. There were no divided opinions. I should start by saying that the matter was raised first with the audit committee on 30 September but it was raised verbally as an AOB item.