Ex-director of INBS criticises legal action against members

A former director of Irish Nationwide Building Society has criticised the decision to take legal action against members of the building society.

John Stanley Purcell told the Banking Inquiry he sees no benefit in pursuing directors of INBS when others have not been the subject of any investigation.

He told the inquiry he was not aware of “any civil proceedings or any administrative sanctions having been initiated against the management of any other bank or building society as a result of the crash”.

“I can’t see how there is any benefit to the public in INBS being investigated and pursued on the double, when institutions which subsist have not been the subject of any serious investigation, inquiry or proceedings.”

Mr Purcell and three other directors of INBS have been sued by Irish Banking Resolution Corporation for breach of contract and breach of duty over the board's decision to delegate powers to the then chief executive of INBS, Michael Fingleton.

“The proceedings represented an attempt by IBRC to make the directors personally liable for the losses of the society,” said Mr Purcell.

“A central plank of the claim was the allegation by the plaintiffs that the delegation of powers by the board of the society to Michael Fingleton was excessive.

Legal advice

"On legal advice, I joined the Central Bank to the proceedings as a third party because they had approved the delegation of powers to Mr Fingleton."

Mr Purcell said he entered into a confidentially settlement with the liquidators but said he accepted no liability.

He confirmed he had paid a sum personally to the plaintiffs for the benefit of the State.

Mr Purcell is also taking a High Court challenge over the Central Bank's role in an inquiry being carried out into the building society.

Mr Purcell told the banking inquiry: “I really can’t understand how the Central Bank can purport to investigate me in relation to events for which they bear responsibility. That is the subject of legal proceedings.”

Mr Purcell, who resigned as a director of INBS in 2010, told the inquiry he expressed regret to “everyone who suffered as a result of the demise of INBS”.

Mr Purcell defended former chief executive Michael Fingleton, and denied he had excessive control of the institution.

He said his control was subject to the board and he made presentations and reports at every board meeting.

Mr Purcell said Mr Fingleton was a strong, focused chief executive who worked extremely hard.

He also insisted Mr Fingleton had access to a computer, but did not have one in his office.

Sinn Féin TD Pearse Doherty questioned the former director on reports the chief executive had no access to the INBS’s computer network.

Mr Purcell said: “He had access, he didn’t use it a lot, he had access if he wanted.”

Mr Purcell also denied he was a yes man for Mr Fingleton.