THE OFFICE of the Director of Corporate Enforcement has no power to investigate practices at Irish Nationwide as building societies do not fall under its remit, a spokesman for the office said.
The spokesman said the office could not comment on reports around corporate governance failures at the building society under former chief executive Michael Fingleton as it did not cover entities such as the building societies.
“Because building societies are not registered as companies under the Companies Act we have no role in relation to building societies,” said the ODCE spokesman.
Details of the reports into Irish Nationwide were published in yesterday’s Sunday Business Post.
The reports by accountants Ernst Young and solicitors McCann Fitzgerald found Mr Fingleton had been granted special powers, allowing him to circumvent the credit committee which approves the society’s loans.
These powers allowed Mr Fingleton to set or alter interest rates on loans and fees to be charged.
The reports said loans were advanced before approval and that the sums advanced were different from the loans approved.
There was also no formal process for approving the extension of loan terms and they uncovered evidence that loans were given to associated companies rather than the borrowing entity.
The reports were forwarded by the new management at Irish Nationwide to the Central Bank.
Mr Fingleton stepped down from the building society in April 2009 following the controversy arising over the payment of a €1 million bonus. Irish Nationwide has received €5.4 billion from the State to cover losses on a loan book worth €12 billion at its peak. The society is to be wound down.
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