Alpha Japan Aib offer

Discussion in 'Investments' started by ABank, Dec 18, 2016.

  1. ABank

    ABank Frequent Poster

    Posts:
    37
    Advice please

    AIB have offered investors who borrowed in Yen an opportunity to convert their yen loan to a euro one as if they had borrowed in Euro in the first place thus eliminating currency losses. Investors as part of the deal have to pay euro interest.

    My situation:

    I repaid the yen loan in 2012 and have been offered a refund of €50k.

    My refund does not provide any contribution for
    Legal costs
    Time value of money
    Compensation
    Additional euro interest I am being charged as part of Aib computation (I did not sign up for a euro interest rate)

    My question
    Aib letter stakes I should get legal advice before accepting the offer. Do I take this to mean that acceptance of the offer will prevent me from pursuing them for costs

    If this is correct am I taking too big a risk by letting the offer date pass? I am not a risk taker which is why I purchased yen to repay the loan at very unfavourable rates.
    I know a number of you are investors in the fund and am interested in your views
     
  2. Jim2007

    Jim2007 Frequent Poster

    Posts:
    1,820
    I can't comment on the rest of your post except to say seek proper legal advice on how to proceed, given the figures involved. However the above sound to me like you are expecting to get the risk profile of one currency with the interest rate of the other which is not going to fly! At the time of making the decision, you had two loan choices Yen or Euro. As I understand it from you, this proposal would put you in the same position as if you had picked the Euro instead of the Yen from the start, in respect of the loan. Is that not the case? If not then what is the 50k in respect of? Just the interest difference?
     
  3. js12345

    js12345 New Member

    Posts:
    5
    ABank. I posted a reply before Christmas but it was taken down for being ill-informed. Harsh, but I just about understand. The moderator and I disagree, it seems, on the course of action and the institution to bring the matter up with.

    How did you get on?

    I have not accepted the offer yet as the offer does not contain enough information on which one could make an informed decision. Why is this being offered? Is it an appropriate deal? There is not enough information provided for a legal advisor or accountant to express a considered view. The vague terms of this 'option' are dictated by the Bank but the customers have little idea where they stand on this. No further information will be provided by the Bank it appears. I have asked the Bank for clarity on a number of queries but they will not engage. I have also tried to get my personal data but the Bank appear to have only very limited documentation on file. The Bank are unable to produce copies of minutes or records of the transactions or account for the movement of monies.

    A question of more interest perhaps is that the Bank became aware of the issue very early on. Why was the Euro Option not offered then? It would have reduced the exposure to investors and also assisted those who had offsetting arrangements and surpluses in their credit accounts. Those who challenged the Bank and disputed the Yen hedge arrangement had no option but to maintain Yen exposure throughout the period as the Bank denied there was any grounds for concern. You may recall that the purpose of the Yen Hedge, as advised, was to reduce risk in the overall investment. Not to reduce costs or for gain.

    In regards to you getting compensation, it would be extremely difficult to force this to occur imho. They do not have to compensate you for the legal costs to date (I assume you are not in proceedings).

    As mentioned by Jim2007 you really need to get informed legal advice if you feel the need to pursue it further. I presume you have exhausted all avenues with AIB and other statutory bodies.
     
  4. ABank

    ABank Frequent Poster

    Posts:
    37
    Hello

    I accepted the option offered by AIB. I am still out of pocket in respect of exchange rate used and professional costs incurred. However I felt it was better to accept.

    In respect of your question ... why now ?, I think I got the answer over the weekend. Apparently AIB are considering offloading their investment loan book to a vulture fund in advance of IPO . Those who accepted the offer have paved the way for this.
     
  5. js12345

    js12345 New Member

    Posts:
    5
    I would be surprised if a vulture fund accepted this as part of a job lot. This Yen issue is a mess for AIB. How can they win any proceedings? As a lawyer said to me recently, you can't be half right in Law. Either they got it right or they got it wrong. There is also the possibility of litigation taken by clients and thus subsequent liabilities for any potential buyer.

    Regarding the above posting, why now? My understanding was the Cork Solicitors and a couple of individual investors had forced AIB into a corner through proceedings/discussions and this was looming. AIB would have great difficulty in any Court Case as it would have to overcome Discovery. They would have to provide all the relevant records including all the damning stuff. They could of course say they have nothing but this would equally undermine them. The Bank denied they advised clients to take out Yen positions to mitigate currency risk. However there is evidence that they did advise this. They had to settle. The Euro Option was their solution.

    The Euro Option offered by the Bank has now muddied the waters and split investors.

    The interesting thing now is how does the Bank treat those who did not accept the offer. The offer is vague and there is no facility to query it and there is no admission of fault. They surely cannot treat one group of investors unfavourably on the basis that they did not take their "accept this or else" ultimatum. Is it valid at Law? It is the Bank's problem they are redressing.

    But ABank you are probably doing the right thing in accepting as it seems you got a reasonable enough deal. The battle may be long and bloody.
     
  6. ABank

    ABank Frequent Poster

    Posts:
    37
    Those who have accepted the Euro conversion now have Euro loans. As I see it AIB can now offer customers the option of repaying the Euro loan and if they dont do so the bank can sell the loan.

    Pressure on the bank from the Central Bank, High Court cases and the ambition to reduce state ownership are behind this.

    Do you know if many yen loan investors accepted the option? I gather you intend to pursue this in the high Court. Good luck with this. I agree the option as offered was not a perfect redress but at least it was progress.
     
  7. js12345

    js12345 New Member

    Posts:
    5
    For those who may have missed it , there was an article in The Sunday Times on 1st January 2017 re the AIB JapanAlpha Yen Mis-selling - "AIB promises to make good Alpha losses". One or two points not quite right but good on Mr Carey. Even Askaboutmoney gets a mention!