Green Party chairman asks who within society expedited loans from Anglo

DIRECTORS' LOANS:GREEN PARTY chairman Senator Dan Boyle yesterday questioned who at senior level within Irish Nationwide facilitated the movement of directors' loans from Anglo Irish Bank to the lender.

He added that following the resignation of the building society’s chairman, Dr Michael Walsh, questions needed to be asked of others working with him at the society.

Ever since the controversy surrounding Seán FitzPatrick’s loan transfers between Anglo Irish and Irish Nationwide emerged in December, the society’s involvement has been overshadowed by concerns at Anglo, following the series of resignations at the bank.

Attention has turned to Irish Nationwide’s involvement in the transfers and to its capital needs after the lender’s debt ratings were cut on Monday due to its vulnerability to the collapsing commercial property market.

The role of chief executive Michael Fingleton in the FitzPatrick loan transfers is now of particular interest given the omnipotent role that the 71-year-old businessman holds in his 38th year running the society.

Mr Fingleton was forced, under the society’s rules, to resign from its board in January 2008 when he turned 70. However, he retained his management role, assuming the position of chief executive.

While the society has boasted of having the lowest cost base of any Irish lender, concerns persist about the strength of Irish Nationwide’s management team and the society’s reliance on Mr Fingleton.

These concerns came to the fore in November 2007 when the society’s head of home loans claimed during a High Court action against Irish Nationwide that lending was “entirely informal and controlled by Michael Fingleton”.

Mr Fitzgibbon, who took the action to stop his suspension by the society, told the court that a credit committee set up by Irish Nationwide to approve home loans of more than €1 million “existed simply to satisfy requirements of the Financial Regulator” and, in practice, there was “limited compliance” with the society’s procedures.

Irish Nationwide defended Mr Fitzgibbon’s action but did not dispute the claims about its lending policies. The case was later settled.

Ratings agency Fitch downgraded the building society’s debt rating last September, in part due to concerns about corporate governance, adding that the lender needed to strengthen its management and board structure in light of its growth and size. The society bowed to the pressure, appointing former assistant Dublin city manager Seán Carey to its board.

The society has also commenced a recruitment process to hire a chief operating officer, a chief risk officer and a chief financial officer after the regulator directed last month that it bolster its senior management team.