Business Irish

Saturday 18 November 2017

Europe asked to review laws used to nationalise Permanent TSB

Finance Minister Michael Noonan
Finance Minister Michael Noonan

and Ray Managh

The High Court is to ask the European Court of Justice to examine whether emergency laws used to nationalise Permanent TSB in the wake of the financial crisis comply with EU law.

Last night Finance Minister Michael Noonan said he is "confident" of a successful outcome when the European Court considers the directive which allowed the state recapitalise and take over Permanent TSB Group Holdings and Permanent TSB.

That was after Judge Iseult O'Malley said she would seek a seek a preliminary ruling on the law from the European Court of Justice.

She has been hearing a case 
taken by a number of Permanent TSB shareholders who are challenging the constitutionality of laws which permitted the bank's €4bn recapitalisation by the lender.

Judge O'Malley said she was not in a position to say definitively whether the Court of Justice would resile from, qualify or affirm the law as outlined on the Credit Institutions (Stabilisation) Act (CIS Act) used by the Minister for Finance to "stabilise" the bank.

The case has been taken by Piotr Skoczylas - a former director of the bank, his company Scotchstone Capital Fund, Gerard Dowling and Padraig McManus.

They are challenged a 2011 direction issued by the minister to inject €2.7bn into the former Irish Life & Permanent (ILP).

At an extraordinary general meeting held in July 2011 shareholders had voted to reject the investment by the State.

The minister secured a direction order from the High Court on July 26 2011 allowing the recapitalisation to go head.

Following Judge O'Malley's ruling she made findings of law and fact for the purpose of the future referral to the European Court of Justice.

Without the State support the bank could have failed, wiping out shareholders, she said.

The decision to invest in the recapitalisation had been made in fulfilment of the State's legal obligations as well as being in the interests of the State's financial systems, the citizens of the State and the citizens of the European Union, she said.

Irish Independent

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