Challenge to State's €2.7bn injection into ILP

TWO IRISH Life Permanent shareholders have begun legal actions against the Government’s recapitalisation of the company.

Last week the Minister for Finance secured High Court orders allowing the State to inject €2.7 billion into ILP, giving the State a 99 per cent stake and wiping out shareholders’ investment. Yesterday, in a brief application before the High Court, shareholders Gerald Nigel Bunting and Horizon Growth told Mr Justice Michael Peart they were serving motions aimed at overturning or varying the orders obtained by the Minister.

Speaking from his office in Ipswich, Suffolk, Mr Bunting told The Irish Times he was not connected to Horizon Growth. He declined to comment further on the timing of his investment in Irish Life Permanent, saying: “I am not really prepared for this call and I don’t know if I have anything of any interest to say.”

Shareholders must serve notice of legal action within five working days of the making of the recapitalisation order under the Credit Institutions (Stabilisation) Act.

The motions were adjourned until next month. It is hoped there will be a full hearing in October.

In affidavits sworn on behalf of Mr Bunting and Horizon, it was alleged that the Minister’s actions were unreasonable and unlawful.

In separate challenges, both claim their shareholdings in ILP have been overwhelming diluted and their rights “abrogated without any consultation”.

Both said the orders were in clear disregard of the majority of shareholders and the Minister’s actions had been carried out without adequate discussion or investigation of alternatives.

Mr Bunting and Horizon allege the Minister’s action was unlawful on grounds that the Minister acted without proper observation of fair procedures and without the appointment of an independent valuer to assess the value of the shareholder’s interest.

The affidavit sworn on behalf of Horizon Growth, which has a registered address at Berg Arrarat on the Caribbean Island of Curaçao, said the fund holds more than 6,000,000 shares acquired between February and July 2011.

Mr Bunting said that he and his family hold 3,030,000 shares in ILP in different accounts.