Anglo: Give us back €11,500 watch and €1m bonus
But letter from new chief demands its return -- as well as €1m bonus
Published 03/08/2011 | 05:00
DISGRACED Irish Nationwide chief Michael Fingleton got an €11,500 watch as a parting gift from the building society -- just weeks after his empty promise to return a controversial €1m bonus.
News of the lavish gift, given in April 2009, emerged last night as a letter was hand-delivered to Mr Fingleton's home in Shankhill, Co Dublin, demanding the return of both the designer watch and the bonus.
The letter was written by Anglo Irish Bank chief Mike Aynsley who assumed responsibility for Nationwide's "legacy" issues after the two lenders were merged.
"He can either return the watch or give the money back," Mr Aynsley told the Irish Independent yesterday.
"It's disgraceful that he would accept a retirement gift at a time when the bank was guaranteed by the State and it was clear that it, along with all other institutions, was financially distressed."
The watch is understood to have been bought at Paul Sheerin's jewellers off Grafton Street in April 2009, ahead of Mr Fingleton's departure at the end of that month. Internal records reveal that Nationwide also paid €9,650 to the taxman so that Mr Fingleton would not have to pay benefit in kind tax. This brought the total cost of the executive's send-off to €21,150.
The gift was given just weeks after the bank announced losses of €243m for 2008 -- an early sign of the catastrophic lending that would ultimately cost the taxpayer €5.4bn and led to Nationwide becoming
Ireland's first nationalised bank in January 2010.
Sources close to one of the then-Nationwide directors last night claimed the lavish gift had not been sanctioned by the board, and at least some directors had not been aware of it.
The culture in Nationwide was such that a leaving gift, even of that magnitude, would not have needed pre-authorisation before it was purchased.
Nonetheless, Mr Fingleton's successor Danny Kitchen is likely to come under pressure to clarify whether he sanctioned the gift or made any effort to prevent it being awarded.
Mr Kitchen, who chaired Nationwide until its recent merger with Anglo, was in London last night and could not be reached for comment. It is understood, however, that the Nationwide board had "queried" the gift with Mr Fingleton after he stepped down. Two government-appointed directors who sat on Nationwide's board from December 2008 are likely to also face calls to explain what they knew and when.
Mr Aynsley said he had not yet had a "single conversation" with the Department of Finance about Mr Fingleton's parting gift, which he only became aware of very recently. The Anglo boss yesterday paid tribute to the "enormous efforts" the Nationwide board had made to deal with "legacy issues" but said that Anglo would now make a fresh push to recover value for the taxpayer.
A key target is the drawing an end to the saga of the €1m "retention bonus" Mr Fingleton was controversially paid after the Government guarantee was introduced in September 2008.
Despite caving to public pressure in March 2009 and agreeing to repay it, the cash has not yet been returned. Mr Fingleton has always maintained he was "legally entitled" to keep the bonus.
"We are essentially asking him to step forward and do the right thing, at a difficult time for the taxpayer," Mr Aynsley said, adding that it was "disgraceful" that the bonus had not yet been repaid.
Calls to Mr Fingleton were not returned last night, but sources close to him had previously suggested the cash had been given to charity. Mr Aynsley said the bank was "looking to recover" the bonus "irrespective of donations to charity".
The Anglo boss refused to be drawn on what other avenues he could pursue if Mr Fingleton ignores the letter, but his legal team is understood to be "examining all options".
"It's someone really doing the wrong thing by the country," Mr Aynsley stressed.
"The Irish taxpayer deserves a better result than Michael Fingleton saying he doesn't need to pay it back because he's legally entitled to it or he's given the money to charity."
The action against Mr Fingleton comes as Anglo's executives mull over a range of "legacy issues" at embattled Nationwide. Asked whether the "legacy issues" were worse at Anglo or at Nationwide, Mr Aynsley replied: "Both are bad".