Credit union body moved €3.2 million from protection fund without AGM approval and blocked watchdog report

The Irish League of Credit Unions (ILCU) moved more than €3 million out of its members’ protection fund without approval at an AGM – with a former president of the league describing the transfer as a “smash and grab”.

A supervisory committee member – who described it as “worse than the FAI” – got seven  seven different explanations for a €3.7 million transfer in the league’s management accounts, according to internal correspondence seen by The Ditch.

The ILCU blocked its own oversight committee from putting a report on the affair before its credit union members.

'There was an unexplained €3.7 million drop in cash'

The Irish League of Credit Unions is the largest credit union body on the island, representing more than 240 credit unions.

It operates the movement’s stabilisation protection scheme, the fund that protects savers in those credit unions.

In June 2024 and May 2025, €3.2 million was transferred from the fund to the league’s general fund to cover pension contributions and investments, according to a legal memorandum prepared for the league by law firm McCann FitzGerald.

The transfers were not put to an AGM of the credit unions. 

McCann FitzGerald advised that the league’s rules neither expressly prohibited nor authorised the transfers. The law firm recommended the league tighten its controls before this year’s AGM.

When the management accounts were presented to the board in August 2025 there was an unexplained €3.7 million drop in cash. But the board adopted those accounts without question.

A member of the league’s elected supervisory committee looked for an explanation and was told the money had been returned to the fund. 

Over the following months she was given a series of other explanations. “We are now where we are now, with seven different explanations, none of which add up,” she wrote to the board in February 2026.

She wrote that the money had been “used for activities not approved by the ILCU AGM”, and described this as “a material breach of the… rules”.

The league’s chief executive David Malone acknowledged that the general fund owed another account €546,000 – the majority of which was transferred to the wrong bank account – at the end of 2025. 

It was repaid on 9 February, 2026, three days after the matter was raised at a board meeting.

The committee member told the board the situation was “worse than the FAI” and was “an issue for the Director of Corporate Enforcement”. She wrote separately that the matter might have to be brought to external authorities.

The league’s treasurer David McAuley described it as “jaw-dropping” and found that there was an “absence of control functions”, according to minutes of the board’s 20 February, 2026 meeting.

Helene McManus, a former president of the league, told the board meeting it was a "smash and grab of the SPS" – the stabilisation protection scheme fund. 

Directors discussed suspending staff and one floated a motion of no confidence in the finance department. The board withdrew a set of accounts it had been due to approve.

The board block a report

Credit unions elect the supervisory committee to scrutinise the board on their behalf. 

The committee prepared a report for this year’s AGM. 

It was recorded that these matters required a full explanation and that the committee had been unable to obtain all of the relevant records.

The board blocked it from the membership. 

“We have been informed that the report will not be published to the membership,” another supervisory committee member wrote in a note prepared for the AGM

The committee, he wrote, had “no confidence in the present board in its handling of governance matters arising from this dispute”.

“Members are entitled to draw their own conclusions from the fact that a report prepared by the supervisory committee, in the discharge of its responsibilities, has not been put before them,” he said.

The ILCU admitted to The Ditch that the committee report still hasn’t been disclosed to its members and that they were only informed of the €3.2 million transfer last month.

“At the… AGM which took place on 23 May, the ILCU presented a detailed finance report to delegates for the year ended 31 December, 2025,” said a ILCU spokesperson.

“As part of this presentation, delegates were fully informed of intercompany transfer activity between the ILCU SPS fund and general fund to the value of €3.2 million which occurred in 2025…(It) also informed delegates that based on legal advice the ILCU board had decided that it was not appropriate to include the supervisory committee report in the annual report.”

The spokesperson added that “external auditors provided a clean unqualified audit opinion on the ILCU financial statements for year ended 31, December 2025” and there was “no net impact on either fund”.