Lender to launch probe of Fingleton decisions
THE Government has ordered disgraced lender Irish Nationwide to investigate controversial decisions taken by ex-chief Michael Fingleton, the Irish Independent has learned.
It has directed the bank's current management team to trawl through decisions made by Mr Fingleton and fellow directors over a number of years.
During Mr Fingleton's time at the helm, Irish Nationwide operated with lax credit standards which led to the society writing off 25pc of its loan book this week.
And the building society, which recently got a €2.7bn bailout from taxpayers, will now have to investigate the kind of actions taken by Mr Fingleton and his colleagues when they were in charge.
Government sources last night said it was possible that actions by Mr Fingleton and his management team may have breached the duty of care they had to the company and by extension its members.
If evidence of this is found it could result in legal action.
Taoiseach Brian Cowen yesterday admitted he met bosses at Irish Nationwide Building Society when he was finance minister, but failed to ask any questions about lending practices.
The Government yesterday came under renewed pressure over the €1m bonus paid to Mr Fingleton after the State's bank guarantee. Mr Cowen insisted everything was being done to recover the money.
The Taoiseach confirmed he met the management of Irish Nationwide about the forthcoming legislation, and also met EBS building society executives.
This meeting with Irish Nationwide took place on May 10, 2005. Mr Cowen and his officials in the Department of Finance met with Mr Fingleton and directors, Michael Walsh and Con Power.
He said he was not aware of any inappropriate financial practices taking place in the building society and this was a matter for the Financial Regulator.
"At no time did the regulator intimate to me that there were issues for legislative change or whatever that should have been considered by me in respect of that society or other financial institutions," he said. But Labour Party leader Eamon Gilmore said there had been a "degree of discussion in business circles that all was not well" in Irish Nationwide.
He said a report from the Ombudsman had described practices in the building society as "illegal".
"It is not credible to suggest that he [Mr Cowen] heard and saw nothing," he said. Fine Gael leader Enda Kenny also criticised the €55,000 a month paid to Mr Fingleton in the first four months of last year -- as well as his €1m bonus.
"The Government appears to be powerless to deal with a small number of senior bankers for whom no pain is being taken and who have business as usual, that is, thumbing one's nose at the office of the Taoiseach," he said. The Irish Independent has learned Irish Nationwide has been asked to produce a "legacy action plan" for Finance Minister Brian Lenihan outlining the kind of decisions taken by the previous management.
This plan will have to outline concrete steps the society intends to take over "any issues arising".