Thursday 17 October 2019

Ex-INBS executive fined €23,000 over collapse

McMenamin accepts role in 'systemic breaches' and is banned for 18 years

Probe: The Central Bank set up an inquiry into the actions of executives at the former INBS in 2015
Probe: The Central Bank set up an inquiry into the actions of executives at the former INBS in 2015
Ellie Donnelly

Ellie Donnelly

The former head of commercial lending at Irish Nationwide Building Society (INBS) has been fined €23,000 and disqualified for 18 years from taking up a senior role in a regulated entity.

Tom McMenamin is the second former senior figure at INBS to agree a settlement with regulators in relation to his role in the collapse of the lender, which has cost taxpayers €5.4bn.

Mr McMenamin was one of five senior executives at INBS that have been subject to a public inquiry into matters at INBS between August 2004 and the end of September 2008.

"Mr McMenamin accepts that he participated in a pattern of systemic policy breaches by INBS leading to poor risk management, ineffective governance and an overall culture of high-risk lending. In this respect, his actions and/or omissions were not deliberate or dishonest," the Central Bank said.

In February, former INBS chairman Michael Walsh agreed to pay a €20,000 fine and accepted sanctions - which concluded the inquiry against him.

The Central Bank set up the public inquiry in 2015 into the actions of Mr McMenamin, former INBS CEO Michael Fingleton, former finance director John Stanley Purcell, former head of UK lending, Gary McCollum and Mr Walsh.

That inquiry remains ongoing, with a meeting scheduled for next Tuesday.

His settlement concludes the Central Bank's Inquiry into Mr McMenamin, the Central Bank said. It relates to him alone and has no effect on the ongoing inquiry into other persons concerned in the management of INBS, the regulator added.

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"INBS's financial instability led to its ultimate collapse," the regulator said.

The breaches relate to INBS's multiple failures to adhere to its policies and procedures in relation to commercial lending and credit risk.

The Central Bank said the failings admitted by Mr McMenamin demonstrated "a serious lack of due skill, care and diligence in carrying out his role and responsibilities".

In his evidence to the INBS Inquiry Mr McMenamin had described information that was provided to the lender's credit committee as a "bit of a sham" and said it contradicted assurances given to the regulator that the organisation had reformed its practices.

INBS cost Irish taxpayers €5.4bn in bailouts before it was merged with Anglo Irish Bank to form Irish Bank Resolution Corporation, and later liquidated.

Irish Independent

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