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Irish Times
28-05-2025
- Business
- Irish Times
Like grief, banking inquiries have five stages and closure is never guaranteed
The Central Bank' s investigation into the collapse of the Irish Nationwide Building Society (INBS) – which concluded with publication of a report last week – followed a depressingly familiar pattern. First there was anger. Lots of anger. The collapse of the building society in 2010 led to a €5.4 billion bailout. It was a disproportionately large part of the €45.7 billion bill for bailing out the banking sector during the financial crisis. The debacle confirmed decades of suspicion that the building society was run as a personal fiefdom by chief executive Michael Fingleton . It led to more public outrage during a very angry time. Then came fear. Fear on the part of politicians – correctly as it turned out – that all of this anger would be vented on them come election time. After fear comes the third stage of Irish inquiries; activity masquerading as action. The Central Bank – then known as the Financial Regulator – began an investigation into the INBS's activities between 2004 and 2008. This confirmed what it already knew: that the building society's governance and risk management were a joke. READ MORE [ Fifteen years, €24.3m and 1,384 pages later, was the Irish Nationwide inquiry really worth it? Opens in new window ] This five-year investigation concluded that a wider investigation was needed to see if the INBS had broken the law and if its management was involved. This led to the setting up of the second inquiry in 2015, which delivered its findings last April and finally wrapped up last week. But before that, we had two more phases to go through. The next was apathy. A constitutional challenge by Fingleton and his lieutenant Stan Purcell effectively put the whole thing on hold for two years. It also took much of the heat out of the inquiry before it finally got going in 2017. It then sat for 105 days over the next four years amid waning public interest. The Central Bank reached settlements – involving sanctions and fines – with former chairman Michael Walsh and former executive Tom McMenamin in 2019. It settled with William Garfield McCollum in 2021. A permanent stay was put on inquiries into Fingleton on medical grounds, leaving only Purcell in the inquiry's sights. He was fined €130,000 and disqualified from being a director for four years. We finally arrived at stage five last week: resignation. The publication – 15 years after the event – of the final report on how a small and badly run building society played an outsized role in our national bankruptcy has been met with barely a shrug. It might seem overly cynical, but the five-stage Irish inquiry process would seem to serve the interests of everybody involved, except for those looking for a timely explanation of how something went seriously wrong and who is responsible. The delay suits politicians well enough – as long as the inquiry is set up promptly enough. A quick start, followed by years of hearings and legal challenges is just fine. They are pretty much in the clear once the inquiry is set up as commenting on the work of statutory inquiry – no matter how slow or badly run – breaks the convention that they can't interfere in the work of inquiries. And of course, they can take no remedial action until the inquiry is finished as that would prejudge the outcome. The attractions of the five-stage process for the subjects of an inquiry are equally obvious. The more time passes, the less the public care about the result when it comes. That makes it easier for all concerned to dismiss the findings as past tense and move on. The legal profession is happy to facilitate all of this, but the real enablers are us. We have bought into the notion that it is not possible to get answers to any serious institutional or regulatory failure in less than half a decade. The Central Bank, in fairness, appears alive to the unsatisfactory nature of the INBS inquiry. It published a market commentary along with the inquiry report that touched on this. There is a section devoted to the 'importance of the Central Bank's investigation and inquiry into INBS'. It leans heavily on the lessons the bank can take from the process, noting that: 'As the inquiry proceeded, the Central Bank continuously reflected on what it could do better; developing improvements to both its internal investigative and inquiry processes.' It concluded that 'this investigation and inquiry have had an enduring and positive effect on the Irish regulatory environment'. It sets out various measures put in place to ensure the smoother running of inquiries. The Central Bank was less effusive about how the 15-year €24.3 million process bolstered its authority as a regulator. 'The Central Bank's ability to bring inquiries to conclusion is critical to the effectiveness of its enforcement regime,' it commented, somewhat elliptically. It said it was important that 'individuals understand the Central Bank will use the full extent of its powers to pursue cases to their conclusion and to hold relevant individuals to account.' That is not exactly the message conveyed by yet another five-stage Irish inquiry.
Irish Times
21-05-2025
- Business
- Irish Times
Irish Nationwide manager shocked at Michael Fingleton's ‘get out of jail card' for borrower
A former senior commercial manager at failed lender Irish Nationwide has told the High Court he was left 'absolutely shocked' that Michael Fingleton Sr, referred to as 'the boss' at the bank, confirmed an alleged 'get out of jail card' to a borrower who could not repay a multimillion euro property loan. Conal Regan, who joined the bank after Mr Fingleton left the society in April 2009, told the High Court on Wednesday that the defendant allegedly wrote a letter to a lender, Louis Scully, who borrowed almost €6 million to purchase land in Co Meath in October 2007, confirming that the sum loaned to him was a 'non-recourse' one. A non-recourse loan means that debt on a loan is secured by the collateral and cannot be pursued by the lender from the borrower. The High Court civil case, which is in its third week, against the former INBS chief executive and managing director alleges he negligently mismanaged the building society and engaged in property 'gambles' with high-net-worth individuals in an informal and speculative manner in the mid-2000s, leading to fatal losses. READ MORE Mr Fingleton (87), who cannot give evidence due to ill-health, joined the building lender in 1971 and retired in 2009. He held the roles of both managing director and chief executive in that time. At its height in 2007, INBS had reported assets of €16 billion but was a high-profile casualty of the financial crisis in 2008. Liquidators for Irish Banking Resolution Corporation (IBRC) have taken the case against Mr Fingleton, who denies the allegation of negligent mismanagement. The total losses at INBS had been estimated to be €6 billion. However, only €290 million in damages is being pursued by IBRC, relating to five specific loans, allegedly approved by Mr Fingleton. The court has been told that Mr Fingleton was allegedly 'nodding through' top-ups and extensions to certain clients without the knowledge of the society's board. At the High Court on Wednesday, former INBS manager Mr Regan, who joined the society in late October 2009, said he was dealing with 'significantly' distressed credits at the lender. When Mr Regan queried and tested loans issued to Mr Scully, he was told by letter from Mr Scully that the money advanced to him were all 'non-recourse' loans. Lyndon MacCann SC, for IBRC's liquidators, was told by Mr Regan that a February 2009 letter from Mr Scully to Tom McMenamin, then manager of commercial lending at Nationwide, referred to a list of borrowings by Mr Scully and other individuals that stated 'nobody was getting any younger'. Mr McMenamin wrote back saying that all loans to Mr Scully were made on a non-recourse basis. Mr Regan said he could not find any reference 'anywhere' in the paperwork about a non-recourse element in a loan to Mr Scully for Meath lands – measured at 21,700 acres – at €598,7850, arising from a value of €275,000 per acre, which Mr Regan said 'seems exceptional, very, very high'. Mr Regan said he reacted by thinking 'why in the name of god was a get-out-of-jail card given here, given the level of funding that had been provided?' 'I just could not understand that somebody could possibly believe that letter would trump agreements or legal documents signed and on a 'normal-recourse' basis. All of a sudden there is this and it just didn't make sense,' Mr Regan told the court. Mr Regan said he had looked at the files regarding Mr Scully's loans and that 'non-recourse was mentioned nowhere. Nowhere'. Mr Regan told the court he asked Mr McMenamin 'why in the name of god' was the letter of confirmation issued and claimed Mr McMenamin told him: 'I was only doing what the boss told me to do'. Mr MacCann asked who was being referred to as 'the boss' to which Mr Regan said he was told by Mr McMenamin that this was a reference to Mr Fingleton Sr. Later in December Mr Scully wrote to Mr Regan saying as far as he was concerned all of his business with the society was on an non-recourse basis and that this had been agreed by Mr Fingleton. Mr Regan told Mr Justice Michael Quinn that it was a 'shocking assertion' and that 'individuals were not even putting hands in their pockets' if they had a 'free bet' on getting planning or zoning for lands. 'It was a get out of jail card. It was incredible. I have never, never come across it before,' said Mr Regan. In response to a request for any documentary evidence as to the agreement between Mr Scully and Mr Fingleton, Mr Scully wrote back on March 25th, 2010, enclosing a letter of confirmation of the non-recourse loans from Mr Fingleton and writes 'I trust this brings matters to a conclusion'. Mr Regan said he was left 'absolutely shocked' by the letter from Mr Fingleton. The case continues at the High Court.
BreakingNews.ie
21-05-2025
- Business
- BreakingNews.ie
Former Irish Nationwide manager 'shocked' that Fingleton issued 'get-out-of-jail card' to borrower
A former senior commercial manager at failed lender Irish Nationwide has told the High Court he was left "absolutely shocked" that Michael Fingleton Sr, referred to as "the boss" at the bank, confirmed an alleged "get-out-of-jail card" to a borrower who could not repay a multi-million euro property loan. Conal Regan, who joined the bank after Mr Fingleton left the society in April 2009, on Wednesday told the High Court that the defendant allegedly wrote a letter to a lender, Louis Scully, who borrowed almost €6 million to purchase land in Co Meath in October 2007, confirming that the sum loaned to him was a "non-recourse" one. Advertisement A non-recourse loan means that debt on a loan is secured by the collateral and cannot be pursued by the lender from the borrower. The High Court civil case, which is in its third week, against the former Irish Nationwide Building Society (INBS) chief executive and managing director Mr Fingleton alleges that he negligently mismanaged the building society and engaged in property "gambles" with high-net-worth individuals in an informal and speculative manner in the mid-2000s, leading to fatal losses. Mr Fingleton (87), who cannot give evidence due to ill health, joined the building lender in 1971 and retired in 2009. He held the roles of both managing director and chief executive in that time. At its height in 2007, INBS had reported assets of €16 billion but was a high-profile casualty of the financial crisis of 2008. Liquidators for Irish Banking Resolution Corporation (IBRC) have taken the case against Mr Fingleton, who denies the allegation of negligent mismanagement. Advertisement The total losses at INBS had been estimated to be €6 billion. However, only €290 million in damages is being pursued by IBRC, relating to five specific loans, allegedly approved by Mr Fingleton. The court has been told that Mr Fingleton was allegedly 'nodding through' top-ups and extensions to certain clients without the knowledge of the society's board. At the High Court on Wednesday, former INBS manager Mr Regan, who joined the society in late October 2009, said he was dealing with "significantly" distressed credits at the lender. When Mr Regan queried and tested loans issued to Mr Scully, he was told by letter from Mr Scully that the monies advanced to him were all "non-recourse" loans. Advertisement Lyndon MacCann SC, for IBRC's liquidators, was told by Mr Regan that a February 2009 letter from Mr Scully to Tom McMenamin, then-manager of commercial lending at Nationwide, referred to a list of borrowings by Mr Scully and other individuals that stated "nobody was getting any younger". Mr McMenamin wrote back saying that all loans to Mr Scully were made on a non-recourse basis. Mr Regan said he could not find any reference "anywhere" in the paperwork about a non-recourse element in a loans to Mr Scully for Meath land – measured at 21,700 acres – at €598,7850, arising from a value of €275,000 per acre, which Mr Regan said seemed "exceptional, very, very high". Mr Regan said he reacted by thinking "why in the name of God was a get-out-of-jail card given here, given the level of funding that had been provided?" "I just could not understand that somebody could possibly believe that letter would trump agreements or legal documents signed and on a 'normal-recourse' basis. All of a sudden there is this and it just didn't make sense," Mr Regan told the court. Advertisement Mr Regan said he had looked at the files regarding Mr Scully's loans and that "non-recourse was mentioned nowhere. Nowhere". Mr Regan told the court he asked Mr McMenamin "why in the name of god" was the letter of confirmation issued and claimed that Mr McMenamin told him: "I was only doing what the boss told me to do". Mr MacCann asked who was being referred to as "the boss" to which Mr Regan said he was told by Mr McMenamin that this was a reference to Mr Fingleton Sr. Later in December Mr Scully wrote to Mr Regan saying as far as he was concerned all of his business with the society was on an non-recourse basis and that this had been agreed by Mr Fingleton. Advertisement Mr Regan told Mr Justice Michael Quinn that it was a "shocking assertion" and that "individuals were not even putting hands in their pockets" if they had a "free bet" on getting planning or zoning for lands. Ireland Michael Fingleton engaged in 'solo run' trading wh... Read More "It was a get out of jail card. It was incredible. I have never, never come across it before," said Mr Regan. In response to a request for any documentary evidence as to the agreement between Mr Scully and Mr Fingleton, Mr Scully writes back on March 25th, 2010, enclosing a letter of confirmation of the non-recourse loans from Mr Fingleton and writes "I trust this brings matters to a conclusion". Mr Regan said he was left "absolutely shocked" by the letter from Mr Fingleton. The case continues at the High Court.
Business Post
21-05-2025
- Business
- Business Post
Irish stocks end Wednesday trading in the green
Shares in Alphabet have seen a significant jump since markets opened on Wall Street,... It was a mixed day of trading by market close on Wednesday, with both Irish and UK... Michael Fingleton helped a borrower request a 'get out of jail free card'... Ryanair boss Michael O'Leary is edging closer to a bumper pay day as he looks... The Iseq All Share has closed in the green, ending the day up 0.22 per cent since... Google has come a long way from its so-called 'code red' situation in late 2022,... Two Irish diplomats were among the European delegation that shots were fired in the...
Business Post
21-05-2025
- Business
- Business Post
Shares in Alphabet soar as investors back new AI features at Google I/O event
Shares in Alphabet have seen a significant jump since markets opened on Wall Street,... It was a mixed day of trading by market close on Wednesday, with both Irish and UK... Michael Fingleton helped a borrower request a 'get out of jail free card'... Ryanair boss Michael O'Leary is edging closer to a bumper pay day as he looks... The Iseq All Share has closed in the green, ending the day up 0.22 per cent since... Google has come a long way from its so-called 'code red' situation in late 2022,... Two Irish diplomats were among the European delegation that shots were fired in the...
