PERMANENT TSB shareholders who wish to challenge the constitutionality of laws which permitted the bank's €4bn recapitalisation by the State cannot bring additional matters into their current court proceedings, a judge ruled yesterday.
Judge Peter Charleton said their proposed High Court challenge to sections of the Credit Institutions Stabilisation Act 2010 – the CIS Act – would have to be brought in separate proceedings as it cannot be pursued by amending the action initiated in 2011 by the shareholders.
In that action, Piotr Skoczylas, his company Scotchstone Capital Fund, Gerard Dowling and Padraig McManus have challenged the 2011 direction of Finance Minister Michael Noonan to inject €2.7bn into the former Irish Life & Permanent (IL&P), now Permanent TSB.
They claim the direction order was not appropriate or reasonable to their position as shareholders and the money could have been sourced elsewhere.
As a consequence of the minister's action their shareholding value was, but should not have been, written down from around 33 cent per share to one cent, they claim.
Although an egm of IL&P Group Holdings, the holding company for IL&P plc, voted 60/40 in July 2011 against the minister's intervention, the minister secured the direction order from the High Court on July 26, 2011. The €2.7bn capital injection was then made, followed by another €1.3bn in March 2012.
In March 2011, Mr Skoczylas and the other shareholders initiated their proceedings as a challenge to the earlier €2.7bn injection and the fall in value of their shareholdings.
Their full action has yet to be heard and Mr Justice Charleton yesterday ruled on a number of preliminary applications, including the shareholders' application to amend their case to include a challenge to sections of the CIS Act.