'Negligent' former bank chief barred from management of any company
Published 09/04/2011 | 05:00
FORMER chief executive of National Irish Bank (NIB) Jim Lacey was "grossly negligent" in his conduct regarding various aspects of the bank's affairs, a court ruled.
He should be disqualified from involvement in the management of any company on grounds of unfitness, for a period to be decided later, the High Court heard yesterday.
Mr Lacey won't be forced to immediately resign from the only Irish directorship he holds, with Dublin-based Forexconcept Fund. A court hearing next month will determine how long he will be disqualified for and once that takes place, he will be expected to relinquish his existing directorship forthwith.
Mr Justice Roderick Murphy found various breaches of duties by Mr Lacey as CEO and director of the bank between 1988 and 1994 were "grossly negligent".
He ruled that his conduct fell below the required standard and "constituted a fundamental failure of governance".
He was delivering his judgment in granting an application by the Director of Corporate Enforcement Paul Appleby for a disqualification order against Mr Lacey under the Companies Act.
Mr Appleby had argued the order was justified on foot of the report of the inspectors who investigated the affairs of NIB and NIB Financial Services between 1988 and 1998.
The inspectors concluded the bank was involved in widespread tax evasion and imposed unwarranted fees and interest charges on customers.
The director claimed there was "a catastrophic failure of governance" during Mr Lacey's tenure as CEO -- and Mr Lacey must bear ultimate responsibility for "very serious wrongdoing" by the bank.
Mr Lacey of Pine Haven, Grove House Gardens, Blackrock, Co Dublin, had opposed any disqualification order, arguing it was unwarranted and would have major reputational consequences for him.
Since leaving NIB, he was appointed to various state boards, worked with the World Bank and was a director of two International Financial Services Centre companies.
Based on the findings of the inspectors' reports and the court's own findings after a disqualification hearing, Mr Justice Murphy ruled Mr Lacey was guilty of various breaches of duty and his conduct made him unfit to be concerned in the management of a company.
The judge agreed with the inspectors that, as CEO, Mr Lacey had ultimate responsibility to ensure Deposit Interest Retention Tax (DIRT) was deducted and paid from all accounts subject to DIRT -- and had failed to discharge that responsibility.
Mr Lacey was guilty of "a serious failure" to perform his duties as CEO and director of NIB relating to his continual failure to ensure compliance with statutory requirements regarding non-resident deposit accounts and Clerical Medical Insurance policies, he found.
While the inspectors had not found Mr Lacey knew of deficiencies in the operation of special savings accounts in NIB, Mr Lacey must bear ultimate responsibility for the shortcomings in that area.
A source said directors disqualified in Ireland typically received a five-year ban, although there was no specified time frame that applied under the relevant legislation.