The Central Bank of Ireland is to hold an inquiry into alleged regulatory breaches at Irish Nationwide Building Society, which was nationalised by the State in 2010 having received a €5.4 billion bailout.
In a notice on its website today, the Central Bank said that following an investigation under its administrative sanctions procedure, it has decided there are “reasonable grounds” to suspect that Irish Nationwide had committed “certain prescribed contraventions” of its rules.
It has also decided that “certain persons who were concerned in the management of INBS at the relevant time participated in the commission of those suspected prescribed contraventions”.
The regulator has established a three-person panel of inquiry to adjudicate on the breaches and has written to an unspecified number of former executives at Irish Nationwide.
The panel will be made up of solicitor Marian Shanley (chair), barrister and accountant Ciara McGoldrick and former chief executive of LloydsTSB Geoffrey McEnery.
Ms Shanley was appointed as a Law Reform Commissioner by successive Attorneys General from 2002 to 2012. She is currently registrar to the Fennelly Commission. She was appointed as a commissioner to the Child Abuse Commission in 2005.
Ms McGoldrick is the former deputy registrar and head of fitness to practise and legal affairs at the Pharmaceutical Society of Ireland.
Mr McEnery has over 40 years banking and financial services experience of which 28 were in a senior executive capacity spent mainly internationally. He is also a former main board director of Hill Samuel Bank in London.
The Central Bank has not named the former executives who will be the subject of this inquiry.
However, it is sure to include the former chief executive Michael Fingleton, who ran Irish Nationwide from the 1970s until 2009 when it was bailed out by the State.
Mr Fingleton was controversially paid a €1 million bonus by Irish Nationwide in November 2008, two months after the State’s blanket bank guarantee was issued.
He is slated to appear before the Oireachtas Banking Inquiry on September 2nd and is also subject of various legal actions relating to his stewardship of Irish Nationwide.
The regulator said the inquiry, which could be held in public, would establish whether the suspected regulatory breaches were committed by INBS and whether the former executives participated in them.
The executives have been sent an “inquiry management questionairre” to fill out, after which the panel members will decide if a hearing is to held.
The possible sanctions that could be issued by the Central Bank include a caution or reprimand, and fines of up to €5 million against the corporate entity and up to €500,000 against an individual.
It could also disqualify a person form managing a regulated entity and direct that the pay the costs of the inquiry.
Irish Nationwide's branch operation was closed by the State and it was folded into Irish Bank Resolution Corporation in 2011, alongside with Anglo Irish Bank, for wind down. IBRC was liquidated by the State in February 2013.
