The inquiry into Irish Nationwide Building Society (INBS) is to further delay aspects of the case relating to former managing director Michael Fingleton who is unable to attend due to his ongoing health issues.
Having heard from 26 witnesses between December 2017 and last June relating to one of seven strands of investigation – into alleged failings of the lender’s credit committee before the financial crash – the inquiry panel has now started a second phase, looking at suspected INBS failures to provide important reports to the board of directors.
Public hearings had been delayed since last summer by Mr Fingleton’s inability to attend. However, the inquiry panel has now elected to look initially at the actions of former INBS finance director John Stanley Purcell in relation to the current phase, on board reporting.
The inquiry heard on Tuesday that Mr Fingleton’s son, Michael Fingleton jnr, had raised issues with this plan in correspondence with the inquiry, as his father would not be in a position to cross-examine witnesses in a timely manner on testimony that may unfairly affect the 81-year-old’s reputation.
Biased view
He also raised concerns that panel members could have a biased view, having investigated Mr Purcell in relation to board reporting, ahead of Mr Fingleton being able to participate. He also expressed a fear about hearings taking place in public in Mr Fingleton’s absence, which may give rise to unfair prejudice.
However, the inquiry panel, led by chairwoman Marian Shanley, decided to proceed with an investigation into Mr Purcell in relation to the second phase for the time being, saying it could move into a private session if Mr Fingleton’s name came up.
The second phase – into a sixth suspected prescribed contravention of regulations, or SPC6 – is looking specifically at allegations that the board did not receive some important reports between dates in 2005 and 2008.
‘Proceed with caution’
These included reports on INBS exceptions to commercial lending policies, quarterly commercial lending, annual credit risks stress tests, and on compliance and geographic concentration of lending, Brian O’Moore, a senior counsel assisting the inquiry, said in his opening statement on the SPC6 phase of inquiry.
Mr Purcell, who is defending himself against the allegations, gave his evidence in private, as some of it referenced Mr Fingleton. “We will proceed with caution for the moment,” said Ms Shanley.
Mr Fingleton has also previously denied participating in the alleged regulatory breaches under investigation.
When public hearings began in December 2017 into INBS, five men were under investigation. However, INBS’s former chairman Michael Walsh and one-time head of commercial lending Tom McMenamin have since reached settlement agreements with the Central Bank. INBS’s former UK lending head Gary McCollum is subject to the inquiry for certain matters.
