Central Bank drops actions against two ex-INBS directors

The Central Bank of Ireland has decided not take any action against two former directors of Irish Nationwide, the building society whose collapse cost the taxpayer €5.4 billion.

Six years after the decision by the State to guarantee the liabilities of the society, the Central Bank recently wrote to two of its non-executive directors Terry Cooney, an accountant, and David Brophy, a former group chief executive of Seán Mulryan's Ballymore, an international property group.

The Central Bank, looking into reckless lending by the former building society, informed them it had decided not to investigate them any further in relation to any “alleged prescribed contraventions”.

Both men were told they might be asked to respond to further questions if the bank decides to proceed with a full inquiry into the society but this would be only as a witness.

Last night Mr Cooney, who was a non-executive director of the society from 2002 until 2009, said: “I can confirm that. I have no further comment.”

Mr Brophy, the shortest serving member of the society’s board, could not be contacted last night. The Central Bank declined to comment.

The Central Bank is understood to be continuing to examine the actions of Michael Fingleton, the society's former managing director, Michael Walsh, its chairman from 2001 until 2009, and Stan Purcell, its finance director, while they were at its boardroom table.

The bank started its investigation in 2010 into the society and initially it identified about 40 different cases of loans it was concerned about. The Central Bank has the power to fine individuals up to €500,000 each if it finds against them. All five former board members are believed to have submitted strenuous defences against any allegations put to them.

KPMG, the liquidator of IBRC which took over the society in 2010, is also taking a legal action against the former board of Irish Nationwide. In part this case hopes to prove members of the society's board were wrong to grant Mr Fingleton a €1 million payment in the year prior to his resignation in 2009.

Last November John Rodgers, senior council for Mr Purcell, secured an order joining the Central Bank as a third party to this case so as to claim indemnity and contribution against the bank for any damages that might be awarded against Mr Purcell.