independent

Wednesday 16 April 2014

Permanent TSB given green light to participate in legal action against Finance Minister

PERMANENT TSB can fully participate in a legal action against the Minister for Finance next month in which some shareholders are seeking to overturn the Minister's order for the €2.7 billion recapitalisation of the institution, formerly Irish Life & Permanent (ILP).

The three-judge Supreme Court yesterday unanimously set aside a High Court order allowing limited participation in the case to Permanent TSB Group Holdings plc and Permanent TSB plc and ruled they could fully participate as notice parties.

The two entities had sought to fully participate arguing they have a vital interest in ensuring the direction order is not overturned.

Their application was supported by the Minister.

The High Court last February ruled there was no need for Permanent TSB to be joined unless the court got to a point in the main action where it was considering substituting the direction order for a new order.

Only then would the court hear submissions from PTSB about the effect any reversal of the order would have on it and what alternative order might be suitable, Mr Justice Peter Charleton said.

The PTSB entities appealed to the Supreme Court which upheld their appeal yesterday, meaning both entities can fully participate in the case due for hearing on January 21.

In that action, Piotr Skoczylas, his company Scotchstone Capital Fund Ltd, Gerard Dowling and Padraig McManus have challenged the 2011 direction of the Minister to inject €2.7bn into the former Irish Life & Permanent, now Permament TSB.  Another €1.3bn was injected in March 2012.

The shareholders claim the direction order was not appropriate or reasonable in relation 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 written down from around 33 cent per share to one cent, they claim.

Giving the Supreme Court decision on the joinder appeal, Mr Justice Nial Fennelly said, as the trial had yet to take place, the court would not express any view on the issues in dispute or the strength of the arguments.

It was clear the two PTSB entities were at least potentially affected by the shareholders' bid to set aside the Minister's order, he found.

He also could not see how the shareholders would be prejudiced as a result of the two companies being  allowed to participate fully.

Another factor was the Minister and the PTSB entities had different interests in this matter.

The judge also disagreed with the High Court that it would be illogical to permit the two companies fully participate when the ILP holding company had voted at a 2011 EGM against the directions order.

There was a great dispute between the sides over matters at that EGM, he observed.

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