The Irish arm of UK outsourcing giant Capita has been hit with a million-euro fine
The Central Bank said the company was running as an unlicensed investment firm for nine years.
THE IRISH ARM of one of the UK’s largest outsourcing companies has been fined €1.15 million by the Central Bank.
Capita Life and Pensions Services (Ireland) was slapped with the penalty for two breaches that covered a period of more than nine years.
It is a subsidiary of outsourcing and professional services giant Capita, which is one of the UK’s largest companies and a member of the FTSE 100 on the London Stock Exchange.
The parent company runs various services, including debt collection and handling the UK’s TV licence fee regime. In Ireland, it has been contracted to implement the Eircodes system.
The Central Bank said the Irish firm was running as an investment firm or business between February 2006 and September 2015 without authorisation.
The firm, which has admitted that all breaches occurred, was also holding clients’ assets without permission from the regulator.
Breaches
The breaches only came to light after Capita’s UK affiliate raised regulatory concerns in April 2014 – a move which prompted the Irish offshoot to check if its administrative services for pensions were properly licensed.
Nevertheless, it didn’t report the issue to the Central Bank until February 2015 – around 10 months later.
“There was an unacceptable delay in reporting the breaches which was a matter taken into account by the Central Bank in determining the appropriate penalty to apply,” the regulator said in a statement.
The breaches were not related to the company’s core business, which is providing administration services to life assurance companies.
The Central Bank said that the breaches instead related to pension scheme administration services that the Irish company was carrying out on behalf of a UK affiliate of Capita.
Lack of oversight
Derville Rowland, the Central Bank’s director of enforcement, said that Capita Life and Pensions Services (Ireland) “conducted unauthorised business, outside of its core business, for a period of more than nine years”.
“The firm’s failure to obtain the required authorisations evidenced an unacceptable lack of proper compliance oversight, governance and control in the conduct of its occupational pension scheme administration services business,” she said.
In 2014, the most recent year for which accounts are available, Capita Life and Pensions Services (Ireland) reported profits of €3.2 million, down from €9.9 million in 2013.
Its turnover was recorded as €36.4 million – down from €49.1 million the previous year. The company employed about 330 people in Ireland at the time.
The fine is the second this week doled out by the Central Bank, which charged KBC Bank Ireland €1.4 million for loans that KBC issued to “related parties”.
