After about five hours mostly dealing with procedural issues and legal arguments, the Central Bank of Ireland's inquiry into the stewardship of Irish Nationwide Building Society came to life yesterday when its chief executive of 38 years, Michael Fingleton, made his plea to have it delayed just before the close.
Fingers, to use his nickname, cited his advanced age, poor health, and the demands of separate litigation being pursued by Irish Bank Resolution Corporation (IBRC)among the reasons why the regulator's inquiry into his management of the failed building society should be postponed.
In mid-2011, INBS was transferred to Anglo Irish Bank, which was later rebranded as IBRC, which is suing Fingleton for €6 million.
He also claimed that many of those interviewed by the Central Bank as part of its 6½-year investigation into INBS had made defamatory statements about him.
The former banker has an appeal pending to a High Court case that he lost in January, where he had sought to block the inquiry's work.
His appeal will be heard next June and Fingleton urged the three-member Central Bank panel, chaired by solicitor Marian Shanley, to defer its work until after this time.
Fairness
This would be in the interests of fairness and natural justice, he added.
Of course, taxpayers, who bailed out INBS to the tune of €5.4 billion before its collapse, could well take a different view of fairness and natural justice when it comes to Fingleton being called to account for his role in the building society’s demise.
Fingleton suggested that he could ultimately take the matter to the European courts, which could result in the inquiry’s work being delayed for years.
His plea was largely rebutted by counsel for the “legal practitioner team” pursuing the case, and by legal representatives for the Central Bank’s enforcement unit.
Fingleton had no legal team with him at the hearing and he claimed to have had no assistance in dealing with the thousands of documents that had been presented to the inquiry.
Yet, his statement outlining his reasons for the delay was detailed and carefully crafted. And in the High Court proceedings he referenced his legal team, who apparently are of the view that his appeal will succeed.
It’s not clear why he had no legal advisers at the hearing, but it might be linked to the fact that the panel has no power to award costs to any of the five executives before it, although it can make orders for costs against them.
The former directors and senior management are accused of regulatory breaches between August 2004 and September 2008, the month of the Government’s infamous bank guarantee.
Michael Walsh, INBS's former chairman, will have an application for termination of the inquiry heard when it next sits on December 13th and 14th. Walsh didn't turn up at the inquiry, but was represented by senior counsel.
No-shows
Stan Purcell
, a former company secretary at INBS, sat and listened to the proceedings, declining to offer any observations when invited to do so by the chairwoman on two separate occasions.
Gary McCollum, who headed the building society’s lending into Britain from a base in Belfast, and Tom McMenamin, a former commercial lending manager at INBS, were no-shows, in spite of evidence detailing attempts to contact them.
Bizarrely, this included an affidavit from a Pony Express courier to the effect that he’d collected an envelope from the Central Bank and duly delivered it to the relevant address.
This inquiry is breaking new ground for the Central Bank in terms of pursuing regulatory breaches.
Some 110,000 documents were submitted to the panel for consideration, while the enforcement unit of the Central Bank submitted 198 notices to either INBS or IBRC in connection with this case.
Unlike a tribunal of inquiry, the panel will have the power to make findings that will have legal effect. A range of sanctions can be applied to the five men, including a fine of up to €500,000.
No evidence will be heard in the remaining two public sessions that have been notified by the panel. We’ll have to wait until next year to hear from witnesses, possibly over the course of 45 days. Or longer, if Fingleton get’s his way.
