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Court gives State go-ahead to buy Irish Life Group

THE High Court has cleared the way for the €1.3bn sale of Irish Life and Permanent's life assurance business, the Irish Life Group, to the State.

The deal was given the green light after Mr Justice Michael Peart dismissed a challenge by some shareholders of Irish Life's holding company, Irish Life and Permanent Group Holdings PLC (ILPGH), aimed at quashing a direction order for the purchase of Irish Life.

The order had been granted by the High Court last March to Finance Minister Michael Noonan under the Credit Institutions (Stabilisation) Act 2010.

In a detailed judgment, Mr Justice Peart found that the shareholders lacked the legal standing (locus standi) to challenge the direction and so dismissed their challenge.

This was on grounds including that the challengers were shareholders of ILPGH and not members of ILP itself.

The Government owns more than 99.8pc of ILPGH after it injected €2.7bn into the group in July last year, resulting in the shareholder's equity in ILPGH being diluted from 100pc to 0.2pc.

In the proceedings, lawyers for the minister argued that the sale was part of the recapitalisation of ILP as required by the Central Bank and the 'troika' of the EU Commission, the International Monetary Fund and the European Central Bank.

The minister claimed that there was an urgency to the matter as the recapitalisation must be completed by the end of June or the bank could face sanctions. ILP, a notice party to the action, also opposed the shareholders' action.

It was brought by ILPGH shareholders Gerard Dowling; Padraig McManus; Piotr Skoczylas and his company, Scotchstonecapital Fund Limited, which is based in Malta; J Frank Keohane; Georg Haug; John Paul McGann and Tibor Neugebauer.

They claimed that the €1.3bn sale of Irish Life undervalued what was the "crown jewels" of ILP. Following the ruling Mr Skoczylas, who represented himself during the nine day hearing, said that he intends to appeal the judgment to the Supreme Court.

The Minister denied all the claims and argued no grounds had been identified to justify the direction orders being set aside.

He claimed the proposed sale will result in the complete separation of ILP's life assurance and banking businesses, and is in the best interests of the State.

Irish Independent