Criminal prosecutions possible in Rush Credit Union case
Members to get savings back within three weeks after High Court appoints liquidators
Rush Credit Union: The court heard there had been no annual meeting called by the credit union since 2013, and no dividend had been paid to members since 2008. Photograph: North County Leader
Criminal prosecutions may be brought arising out of investigations into Rush Credit Union in north Co Dublin, the High Court was told today as it appointed provisional liquidators to the credit union.
Investigations into the credit union had revealed significant misappropriation of funds and gardaí have been notified of suspected money laundering, the President of the High Court, Mr Justice Peter Kelly was told.
Appointing Jim Luby and Tom Rogers as provisional liquidators of the credit union, Mr Justice Kelly said their appointment was necessary in order to address the concerns of worried depositors, given its unhappy financial position.
The Central Bank will have to repay within 20 days deposits which are guaranteed under the State’s Deposit Guarantee Scheme. That guarantees savings of up to €100,000.
The court heard Rush Credit Union is in a distressed state, with net liabilities over assets of some €2 million and reserves of minus 8.7 per cent, which will require funding to the tune of €4.73 million. Credit unions are required to have reserves equivalent to at least 10 per cent of total assets.
Rush Credit Union was established in 1972 and has about 11,457 members with savings worth €24 million.
The winding up application was made by Paul Gallagher SC, for the Central Bank. He asked that certain material in the petition and affidavits before the court not be published. Mr Gallagher said this was because there may be criminal prosecutions and the Bank was anxious not to do anything to prejudice those.
Commercially sensitive information
The judge granted the order on this basis and on grounds of commercially sensitive information which, should the credit union need to be disposed of, it would not be in its interest to be revealed.
Despite significant engagement and assistance from a number of bodies since 2010 to assist Rush Credit Union with its difficulties, Mr Gallagher said, there continued to be significant issues including in relation to internal governance and lending practices. There had also been a significant level of misappropriation of funds.
The Registrar of Credit Unions had issued a number of directions in relation to its business activities, the Central Bank’s head of resolution for credit institutions Patrick Casey, said in an affidavit.
Issues arose in relation to a number of matters, including how a car draw was conducted and over certain payments to the Revenue Commissioners. The credit union notified Revenue and gardaí under money laundering legislation because of suspected money-laundering activities, Mr Casey said.
The court heard there had been no annual meeting called by the credit union since 2013, and no dividend had been paid to members since 2008. If a meeting was called, it would mean members would have to be informed of its financial position, which could have led to a run on deposits.
Mr Justice Kelly was satisfied a prima facie case was made out for appointment of provisional liquidators to take over the running of the credit union.
The case comes back before the court on November 21st.