Fingleton facing Anglo action

Legal proceedings were taken this afternoon against former Irish Nationwide chief executive Michael Fingleton and five other former directors of the building society, the former Anglo Irish Bank that is winding down Irish Nationwide has confirmed.

Two set of proceedings were filed against the six individuals in the courts this afternoon relating to breach of contract.

The first is against Mr Fingleton and the second against former chairman Michael Walsh, former finance director and secretary Stan Purcell and board members Cornelius Power, Terence Cooney and David Brophy, according to legal papers filed in the courts.

Earlier today, Mike Aynsley, chief executive of Irish Bank Resolution Corporation, formerly Anglo, said the bank would issue "protective plenary summons" against Mr Fingleton, Mr Walsh and other former senior officers of the building society.

A spokesman for the bank this evening confirmed that the summons were filed in court this afternoon. He declined to name the other four individuals.

Speaking at the bank’s annual results yesterday, Mr Aynsley said that the proceedings would "signal a potential series of actions to come" and that they were being issued today to avoid any problems arising with the statute of limitations. He declined to outline the bank’s case against the individuals.

The statute of limitations sets the maximum time after an event that legal proceedings may be initiated. In relation to contractual issues, the statute limits legal actions to six years.

The bank’s proceedings relate to matters dating back to 2006 when the six men were directors of the building society and centre on actions taken by Mr Fingleton and his activities, and the board’s oversight of his role and management at the building society.

The legal action follows investigations into the building society by accountants Ernst and Young and law firm McCann Fitzgerald, which is representing IBRC in the proceedings.

Reports by Ernst and Young and McCann Fitzgerald into decisions of the Irish Nationwide board and Mr Fingleton’s stewardship of the building society were passed to the Central Bank and the Department of Finance. They in turn passed them to IBRC after Anglo and Irish Nationwide were merged last year.

Speaking generally about legal actions being taken by the bank, Mr Aynsley said that the bank was required to pursue individuals where the bank believes they have breached regulatory and contractual obligations or fiduciary duties.

Mr Aynsley said that the bank had received approval from the Minister for Finance Michael Noonan to take the proceedings under the framework agreement that governs the relationship between the Government and the State-owned bank.

"We just don’t charge off and do this - the Minister has now provided his approval to commence these proceedings," he said.

The bank has been pursuing Mr Fingleton for the return of a €1 million bonus paid in the weeks after the Government bank guarantee in 2008, a €11,500 watch received as a retirement gift and expenses charged to Irish Nationwide during his time running the building society.

A spokesman for the bank said that it had taken over “legacy matters” at Irish Nationwide after the building society was merged with Anglo and renamed as IBRC last year and that these proceedings relate to those matters.

Irish Nationwide was nationalised in 2010 after receiving €5.4 billion of State funds to cover losses on property lending.