€1.3bn sale of Irish Life Group to Minister for Finance cleared
THE HIGH Court has cleared the way for the €1.3 billion sale of Irish Life and Permanent’s life assurance business, the Irish Life Group, to the Minister for Finance.
Mr Justice Michael Peart yesterday dismissed a challenge by some Irish Life shareholders aimed at quashing a direction order for the purchase of Irish Life granted by the High Court last March to the Minister under section 9 of the Credit Institutions (Stabilisation) Act 2010.
In a lengthy and detailed judgment, Mr Justice Peart found that the shareholders lacked the legal standing to challenge the direction order as they were shareholders of the parent company ILPGH, not ILP itself.
The Government owns more than 99.8 per cent of Irish Life Permanent Group Holdings (ILPGH) after injecting €2.7 billion into the group in July last year, resulting in the shareholder’s equity in ILPGH being diluted from 100 per cent to 0.2 per cent.
Lawyers for the Minister argued the sale was part of the recapitalisation of ILP as required by the Central Bank and the troika of the European Commission, the International Monetary Fund and the European Central Bank.
The Minister also claimed there was an urgency to the matter as the recapitalisation must be completed by the end of June or the bank could face sanctions. ILP, a notice party to the action, also opposed the proceedings.
The action has been brought by a number of shareholders of ILP’s holding company, Irish Life and Permanent Group Holdings plc.
They are Gerard Dowling, Pádraig McManus, Piotr Skoczylas and Mr Skoczylas’s company, Maltese-based Scotchstone Capital Fund Ltd, J Frank Keohane, Georg Haug, John Paul McGann and Tibor Neugebauer.
The shareholders argued the direction order, made under section 7(2) of the 2010 Act, was unreasonable and was invalidated by errors of law. They claimed the direction order illegally forces ILP to sell a very valuable asset at undue expense of ILPGH shareholders and for the benefit of the Minister.
The order was instigated without adequate consultation and proper observation of fair procedures, they claimed. They claim the sale undervalued the “crown jewels” of Irish Life.
Mr Skoczylas said he intended to appeal to the Supreme Court.
The Minister argued that no grounds had been identified to justify the direction orders being set aside. He claimed the proposed sale would result in the complete separation of ILP’s life assurance and banking businesses, would benefit ILP by €1.3 billion and was in the best interests of the State, the company and shareholders.