IL&P shareholders group to challenge recapitalisation

A GROUP of Irish Life and Permanent shareholders are to file a challenge to the Government’s decision to recapitalise IL&P in the High Court today.

Last Wednesday, the Government secured a High Court order to inject € 2.7 billion into Irish Life & Permanent, taking control of a fifth Irish bank.

The decision to secure a high court order followed shareholders’ rejection of the proposal at an egm the previous week. The € 2.7 billion injection will leave the State with a stake of more than 99 per cent and will wipe out the value of the shareholders’ investments.

Under the Credit Institutions (Stabilisation) Act – the sweeping banking legislation introduced last year which the Minister is using for the recapitalisation – the shareholders have five days from the day the order is granted to file a challenge.

The shareholders are expected to challenge both the decision of Minister for Finance Michael Noonan to make the order to inject € 2.7 billion into the bank and the constitutionality of the 2010 legislation that allowed him to do so.

They are also expected to argue that private investors should be involved in the IL&P recapitalisation.