INBS credit committee agendas were 'a sham'
The former head of commercial lending at the now-defunct Irish Nationwide Building Society, Tom McMenamin, admitted that agendas - information that was provided to the lender's credit committee - were a "bit of a sham" and contradicted assurances given to the regulator that the organisation had reformed its practices.
He also conceded that "in hindsight" he should have corrected the record before the Society's chairman, Dr Michael Walsh, gave a "misleading" undertaking to the corporate watchdog that a set of governance recommendations delivered to the board had been addressed.
After almost three hours of interrogation at the Central Bank's inquiry into alleged regulatory breaches at INBS, Mr McMenamin claimed staff were under "fierce, fierce pressure" to meet the demand for loans and claimed "no top official" ever criticised "our work, or lack thereof".
Faced by a barrage of evidence that exposed a seeming disregard for basic governance procedures, Mr McMenamin insisted the failure of the credit committee to adhere to its own rules never struck him as troubling, because another "system was in operation" that allowed issues to be brought before the "boss man" two to three times a year - a reference to INBS's former managing director Michael Fingleton.
Under questioning by Brian O'Moore, SC - one of the legal team assisting the Inquiry - the former senior executive revealed that under his de facto chairmanship of the credit committee rules and regulations were flouted on a routine basis.
Mr O'Moore argued Mr McMenamin saw "no reason to change the way he was operating" because he had "been bumping along that way for years" and the "boss man was happy".
In July of 2005, when the property boom was in full swing, the committee approved over €300m in loans, which were then signed off by Mr McMenamin and advanced to the Society's board for sanction. At that time, however, McMenamin was in Australia visiting his son.
He told the inquiry he was away for a month and did not return until August 2005.
Mr O'Moore asked if he had inquired about the advances made in his absence, and on his behalf, when he returned to work. "I probably didn't," Mr McMenamin replied.
Mr O'Moore claimed the "casual observer would have taken it that you had considered and agreed to those advances but, in fact, you knew nothing about them".
In one of the most dramatic days of evidence so far at the Central Bank's inquiry, Mr McMenamin conceded he had provided "inaccurate information" to colleagues, including compliance officer, Ita Rogers, about the running of the credit committee. This information was later fed back to the board and the regulator.
He admitted credit reviews were never submitted to the credit committee, even though official responses from the Society - which Mr McMenamin knew to be incorrect - were then relayed back to external auditors KPMG and special consultants Deloitte.
When pressed repeatedly about whether he knew the credit committee's terms of reference, first formulated in 2003 and then revised in 2006, Mr McMenamin repeatedly said he couldn't remember - even though he'd helped draft the new terms and set the agenda for meetings that reflected the committee's rules.
When presented with a report from Deloitte in 2006 recommending the committee adhere to its rules, Mr McMenamin said he "must have read it", but could not recall doing so.
"Did it not strike you like an express train that there were terms of reference for this very important committee that you had been unaware of until now?" Mr O'Moore said. "You hardly ignored all of this successfully and consistently".
Mr McMenamin said he "should have" picked up on such an oversight.
"There is no should have… as matter of fact you probably did," Mr O'Moore said.
The inquiry continues.