Tuesday 17 October 2017

Michael Fingleton should have been sacked in 2007, court hears

Michael Fingleton: action
Michael Fingleton: action

Tim Healy

Former Irish Nationwide boss Michael Fingleton should not have been paid a €1m performance bonus prior to his departure, the Commercial Court has been told.

Had the true picture of the Society's affairs been known, Mr Fingleton should have been summarily dismissed no later than 2007, according to the special liquidators of the Irish Bank Resolution Corporation (IBRC), formerly known as Anglo Irish Bank.

Mr Justice Peter Kelly today agreed to fast-track separate proceedings by the special liquidators against Mr Fingleton and four other former directors in the Commercial Court.

While no sum in specified in the proceedings  against Mr Fingleton or the ex-directors, the judge noted the claim will run into tens of millions of Euro.

The case relates to the conduct of some 20 transactions which had been subject to a forensic examination, the judge heard. The statement of claim in the case extends to 80 pages, it was stated.

An investigation into how affairs of the Irish Nationwide Building Society (INBS) were conducted under the stewardship of Mr Fingleton had taken more than three years due to factors including he had left behind "astonishingly" few documents, the court also heard.

That meant the affairs of INBS had to be effectively reconstructed, said Maurice Collins SC, for IBRC.

The judge noted Mr Fingleton was involved with the Society from 1971, initially as a director and later as CEO, until 2009.

Bill Shipsey SC, for Mr Fingleton, neither consented nor objected to transfer but said he was concerned Mr Fingleton was not covered by insurance within the meaning of a policy relating to directors and officers of the Society.

It also seemed Mr Fingleton was being blamed for effectively allowing the board give him too much power, counsel added.

Mr Collins said the issue of insurance had no relevance to the case.

The four others being sued are former chairman Michael Walsh, and former directors Terence Cooney, Stan Purcell and David Brophy.

Lawyers for those defendants argued they were in a very different position from Mr Fingleton and the cases against them should be dealt with separately on grounds, including that Mr Fingleton had significant knowledge of the transactions at issue but they were non-executive directors who had not.

Mr Justice Kelly noted the claim against the four included allegations they had wrongly delegated authority to Mr Fingleton to deal with a range of transactions. He said they were entitled to time to examine documents and also noted some intended to seek security for costs of the case against IBRC.

He was satisfied the state of knowledge of the four was substantially less than that of Mr Fingleton, the judge said.

IBRC was nationalised in 2010 and later merged with Anglo Irish Bank into IBRC.

The proceedings relate to matters dating back to 2006 when the men were directors of Irish Nationwide and centre on actions allegedly taken by Mr Fingleton and the board’s oversight of his role and management of the lender.

 

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