Former Irish Nationwide chief Fingleton loses court action
Action was to stop Central Bank from starting inquiry into regulatory breaches
In his High Court proceedings Michael Fingleton sought various orders and declarations from the court in respect of the Central Bank’s decision to launch an inquiry
Former Irish Nationwide Building Society chief executive Michael Fingleton has lost his High Court action aimed at preventing the Central Bank from conducting an inquiry into alleged regulatory breaches at the financial institution.
Mr Fingleton, along with several other former officials of INBS, are the subject of a Central Bank inquiry, under Part III C of the 1942 Central Bank Act, which is due to commence hearings in February.
He challenged the Central Bank’s decision to subject him to an inquiry claiming it was unfair and unreasonable.
The Central Bank, which wants to inquire into allegations certain prescribed contraventions were committed by both INBS, and certain persons concerned with its management, between August 2004 and September 2008, opposed the application.
Giving judgment today Mr Justice Seamus Noonan, dismissed Mr Fingleton’s action, clearing the way for the inquiry to proceed.
In a lengthy and detailed ruling Mr Justice Noonan said Mr Fingleton had “not satisfied me that there is any unfairness inherent in the inquiry process to which he is subject.”
Mr Fingelton was not present in court for the decision.
The inquiry, in the event of any finding of wrong doing, has the power to impose a fine on an individual of up to €500,000. INBS was nationalised and merged with the former Anglo Irish Bank into IBRC in 2011.
The Central Bank estimates the collapse of INBS cost the tax payer €5billion, although the figure is disputed by Mr Fingleton.
In his action Mr Fingleton sought various orders and declarations from the court in respect of the Central Bank’s decision to launch an inquiry which he claims is disproportionate, oppressive and unreasonable.
Mr Fingleton also claimed that proceeding with the inquiry is a breach of fair procedures and an unlawful breach of his right to a fair hearing.
Mr Fingleton argued the Central Bank cannot conduct an inquiry of this nature. This is because Mr Fingleton, who retired in 2010, is no longer involved in the management of an entity that was a regulated financial service provider.
It was also claimed there was a delay by the Central Bank in bringing the inquiry, he had been subject to prejudicial adverse media coverage, and was made the scapegoat for the banking crisis.
Mr Fingleton is also the subject of proceedings before the Commercial Court, also arising out of events at INBS before it was nationalised. Mr Fingleton also claims that at the very least the inquiry should not be conducted until those proceedings have been concluded.
The Central Bank had rejected all of Mr Fingelton’s arguments, and said there was nothing preventing the inquiry from proceeding as planned.
In his decision Mr Justice Noonan dismissed all grounds of Mr Fingelton’s case. The 1942 Central Bank Act applies to Mr Fingleton, the Judge said, the former INBS CEO was lawfully subject to the inquiry.
There had been no culpable delay by the Central Bank in conducting its investigation into Mr Fingleton resulting in any unfairness to him.
The inquiry, and the elaborate procedures provided for in the 1942 Act, ensured Mr Fingleton’s right to a fair hearing “is guaranteed,” the Judge added.
“It seems to me that the public interest is well served by a credible system of financial regulation and enforcement such as that provided in the 1942 Act,” the Judge said.
Much of Mr Fingelton’s claim, the Judge said, was “an attempt to to preempt in advance issues before the inquiry that may or may not arise, or be determined by the inquiry itself.”
Any suggestion Mr Fingleton will be subject to any prejudice by the inquiry, the Judge found, was “devoid of substance and without merit.”
Rejecting Mr Fingleton’s claim the inquiry would occasion significant financial hardship on him as he would have to bear the legal costs associated in preparing for the inquiry.
The Judge noted that the Central Bank referred in a sworn statement said annual reports for INBS from the years 2003 to 2008 show Mr Fingelton’s remuneration package amounted to €9.77 million.
The Central Bank also avers that when his pension fund matures it is worth approximately €30 million. Mr Fingelton had not replied to that evidence, the Judge said.
“In the light of that the applicant’s complaints about equality of arms and the unfair costs burden on him of participating in the inquiry ring somewhat hollow,” the Judge said.
The Judge adjourned all outstanding matters in the case, including the issue of legal costs, to January 14th.