The collapse of the Waterford based Pilot Training College which went into liquidation after trainees and their families paid €5.5million in fees, is to be investigated by a committee of the Dáil and Seanad.
The decision to investigate was taken today after the Oireachtas Transport Committee heard from chief executive of the Irish Aviation Authority Eamonn Brennan that the directors of the college had “run for the hills”.
The authority's director of safety regulation Kevin Humphreys said the directors had been effectively operating “a ponzi scheme”.
The committee also heard criticism of the college's accountants and auditors and the investigation is to consider whether to report these firms to their regulatory bodies.
A number of trainee pilots – part of a group of up to 350 pilots - who were left stranded in Florida when the college collapsed, were in the committee’s public gallery today to hear acting chairman Patrick O’Donovan say the investigation would be “full and forensic”.
A number of committee members complained that fees had continued to be taken from trainees in the months before the Florida Institute of Technology ended its deal with the Waterford based college over non payment of bills.
The Committee also heard calls for the actions of the college directors to be referred to the director of corporate enforcement. Joe McHugh TD said the college’s accountants and auditors appeared to have given the school a clean bill of health when there were serious difficulties.
In a further move the committee said its investigation would cover whether the Minister for Transport Leo Varadkar should make a once-off offer of alternative training or compensation to the students involved.
Mr Brennan said the authority had done everything it could do, as it was a safety regulator and not the financial regulator. He said he would welcome an investigation by the director of corporate enforcement, and remarked that the directors of the Pilot Training College had not answered questions from the authority or the student’s families about the financial crisis at the business.
He said he understood a new company, Clearsky, had been incorporated in recent months by the principals of the Pilot Training College but it had not sought any approvals for the aviation authority.
Mr Humphreys said the lessons from a similar collapse in Co Cork in the 1980s had not been learned.
Speaking ahead of today's hearing, Brian and Martina Kealy of the Pilot Training College Action Group said many individuals and families had paid sums of about €80,000 each in the nine months before the college went into liquidation.
They have been told the company has no funds to repay the fees they paid for a course taught in the US.
Ms Kealy said the group maintained there were difficulties with the oversight of the Pilot Training College accounts by the IAA. She said they also took issue with the assertion by Minister for Transport Leo Varadkar to the effect that accountants had been “satisfied” the college would continue as a going concern.
Ms Kealy said Mr Varadkar could "not evade these truths", adding that “justice must be done”.
