Noel Ahern (Dublin North West, Fianna Fail)

The amendments are not necessary and do not add to the Bill. The Bill provides additional options for building societies to demutualise. It has been drafted in a way that ensures there is a transparent framework for conversions under the 1989 Act, which is being maintained. Appropriate controls are in place and the rigorous framework for conversions already exists. It is not necessary to involve any other independent actuary, independent expert or court, as the Senator suggests.

We have had two conversions under the 1989 Act and this amendment does not change the basic framework. The legislation already has a series of controls as regards the demutualisation process. As I said earlier, the conversion process involves the preparation of the statutory conversion scheme by the society, on which the Central Bank must be consulted. In a way that is to bring in an outside body. Then the law provides that a statement must be issued to members outlining the proposals. People have the right to inspect that, the members approve it and, if required, an appeal can be made to the Central Bank later. There are many people involved in the set up.

Senator Bannon asked about staff and whether they would get shares. Those matters are not covered in the legislation which is separate from the conversion scheme. The legislation says that if a building society is being demutualised, a conversion scheme must be drawn up, checked with the Central Bank and eventually put to the members. The details, as regards who might get what, the entitlements of any saver or mortgage holder, director or staff member, will be in the conversion scheme. Previous conversions have included provisions as regards free shares for employees and indeed share options for senior management. However, the Bill requires that any directors' interests in the acquisition be specified in the statement that issues to members and this will ensure transparency.

Basically, the conversion scheme, as put to members, lays down what any saver, mortgage holder or staff member might get. That is where this is done. It is not done in the legislation. There is the precedent of what happened in previous times. Based on the good aspects of that, I would hope that the benefits that might be given to staff will be continued in line with such precedent. However, we do not lay down what those benefits should be in this framework legislation.

The Central Bank is completely independent, so there is no need to be setting up any other agency layer to look at the matter. Those are the basic points I wanted to make to the Senator.