Business

Monday 19 August 2019

Michael Fingleton Jnr snubs inquiry into Irish Nationwide ‘profit share’ loans

Michael Fingleton junior
Michael Fingleton junior
Former INBS managing director Michael Fingleton’s ill health has kept him from the inquiry. Photo: Collins
Stan Purcell.
INBS was nationalised in 2010

Shawn Pogatchnik

Michael Fingleton Jnr - who ran the Irish Nationwide Building Society office in London as the bank built a huge UK portfolio of “profit share” loans - has refused to attend a Central Bank inquiry into the high-risk practice.

Senior counsel Brian O’Moore SC said Mr Fingleton Jnr had been sent 11 written requests to help the inquiry dating back to 2012, including four invitations over the past month to testify to the current module examining INBS “profit share” loans - and did not respond.

“It’s simply both unfortunate and unacceptable that Mr Fingleton Jnr... has chosen not to respond or engage at all,” Mr O'Moore told the three-member inquiry on Thursday.

“It’s not just the lack of courtesy, it’s the fact that as a former executive of the society, Mr Fingleton Jnr sinply isn’t prepared for reasons, which he has not specified, to attend today or at any other day that might be fixed for the taking of his evidence.”

READ MORE: INBS had no counter-balance to Fingleton, inquiry is told

The INBS Inquiry chairperson, solicitor Marian Shanley, said the probe could not compel Mr Fingleton Jnr’s attendance, either in person or by videolink, because he still lives outside the jurisdiction in London “and can’t be summonsed in the usual way”.

Mr Fingleton Jnr’s absence yesterday lengthens the list of witness difficulties facing the inquiry as it examines INBS’ management of “profit shares”.

Such unorthodox loans involved advancing 100pc of the purchase value of land or property to a developer, most commonly in the UK, on terms involving no security beyond the asset being acquired and no interest or capital repayments due until the asset was sold. Then INBS would receive 25pc to 50pc of net profits - or face full exposure if the investment soured.

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Former INBS managing director Michael Fingleton’s ill health has kept him from the inquiry. Photo: Collins

The inquiry reopened this month to news that INBS’ former managing director Michael Fingleton Snr, would not attend citing ill health.

Mr O’Moore said Mr Fingleton Jnr had communicated with the inquiry several times in early 2019 in hopes of postponing the entire “profit share” module until his father’s health improved, an effort rejected by the inquiry.

Mr O’Moore noted that Mr Fingleton Jnr had engaged “with the inquiry promptly and meeting deadlines fixed by the inquiry” in relation to that topic, making his silence on his own attendance as a witness “striking”.

READ MORE: Irish Nationwide too busy 'racing from crisis to crisis' to set policy on high-risk loans

Several other figures in the bank - which collapsed in 2011 at a cost to taxpayers estimated at €5.4bn - have testified that the profit-share loans grew by late 2006 to represent most of Irish Nationwide’s €8.1bn commercial loan portfolio, even though the bank had never approved or enforced any formal credit-risk policy specific to “profit share” agreements at all.

The inquiry had planned to question Irish Nationwide’s other key UK-based executive, Gary McCollum, next week as its penultimate witness before former finance director Stan Purcell, who has attended the entire module and cross-examined several witnesses.

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Stan Purcell.

But Mr McCollum, the former head of UK commercial lending based in Belfast, has told the inquiry he cannot attend at any time in the coming two weeks.

Mr O’Moore said Mr McCollum had been offered videolink from Belfast as an option but this had been declined.

“With Mr McCollum being out of the jurisdiction in Belfast, it’s harder to impose a date for evidence,” he said.

Mr O’Moore proposed that the inquiry reschedule both Mr McCollum and Mr Purcell for September “as the final witnesses, subject always to the hope that Mr Fingleton Jnr might present himself at some stage”.

Ms Shanley replied: “It’s not satisfactory - but we will proceed on that basis.”

Last week another listed witness, former INBS credit committee member John Roche, told the committee he would be travelling internationally over the coming year - but not to Ireland - and so would not testify in person or by videolink. Mr Roche reportedly lives in Nice, France.

READ MORE: Senior INBS lender says he never understood 'profit-share' loans

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