THE DIRECTOR of Corporate Enforcement has said that the former chief executive of National Irish Bank (NIB), Jim Lacey, must bear ultimate responsibility for “very serious wrongdoing” by the bank in the 1980s and 1990s.
At the start of a legal action to disqualify Mr Lacey from acting as a director of a company, corporate enforcer Paul Appleby told the court that there was “a catastrophic failure of governance” during Mr Lacey’s tenure as NIB chief executive between 1988 and 1994.
The proceedings arise from the July 2004 report by High Court inspectors into the bank which concluded that NIB had been involved in widespread tax evasion and the overcharging of customers with unwarranted fees and interest.
The court inspectors, who were appointed following reports by RTÉ in 1998 about practices at the bank, investigated the affairs of NIB between 1988 and 1998.
They found that several senior managers, including Mr Lacey, bore responsibility for improper practices and failed to deal decisively with, among other matters, bogus non-resident accounts and the improper charging of interest.
Maurice Collins SC, representing Mr Appleby, told the court that the inspectors’ report not only justifies but mandates a court order disqualifying Mr Lacey from involvement in managing any company on grounds of unfitness.
In an affidavit resisting disqualification, Mr Lacey rejected the inspectors’ findings in relation to him as “fundamentally flawed” and he argues that he discharged his responsibilities as chief executive “diligently and competently”.
Mr Lacey, who was in court, is likely to face cross-examination later this week. The court action before Mr Justice Roderick Murphy is expected to last three weeks.
Mr Lacey is one of nine former senior executives and directors of NIB to face disqualification proceedings by Mr Appleby’s office.
Five former NIB managers were disqualified from becoming directors for terms of up to 10 years. They include Mr Lacey’s successor, Barry Seymour.