Lenihan seeks private order over bank

 

Minister for Finance Brian Lenihan applied to the High Court just after 9am seeking to make a private application under the Government's new sweeping bank restructuring legislation.

Lawyers for Mr Lenihan asked Ms Justice Maureen Clark to have the application "in relation to a financial institution" heard in private and to exclude two Irish Times reporters from the proceedings.

The Minister's court application related to the Government's injection of a further €3.7 billion into AIB which paves the way for the State's shareholding in the bank to rise to 49.9 per cent initially and eventually to 92.8 per cent.

David Barniville SC, with Niamh Hyland SC, for the Minister, applied under Section 60 of the Credit Institutions (Stability) Act 2010 to have the matter heard in private on the grounds that it related to a matter of "extreme commercial sensitivity".

Ms Justice Clark asked if the in-camera application was still relevant given the nature of news bulletins this morning at 7am and 7.30am. Mr Barniville said the issues running in the media were not the issues involved in the application.

The judge asked the two Irish Times reporters to leave the proceedings saying that the courts were "working our way through the legislation" and that it was appropriate to have it heard in-camera.

One of the reporters for The Irish Times asked the court for a brief adjournment to allow the newspaper to consult with lawyers to see if the newspaper wanted to consider opposing the in-camera application because the newspaper had only become aware of this.

The judge said that if she did so, she would negate the powers of the Minister for Finance if she allowed the preliminary application for a private hearing of the matter to be heard in public. She added that she had been told that these were matters of commercial urgency.

A solicitor who was not representing any of the parties to the application was also asked to leave the court. The solicitor told the court that he had a watching brief for an interested party in the case.

The court granted the order, allowing for the second Government bailout of what was once Ireland's largest bank. The move effectively nationalises AIB, bringing a fourth financial institution under State control, joining Anglo Irish Bank, Irish Nationwide and EBS building society.

AIB has been directed by the court to cancel its listing on the main markets of the Irish Stock Exchange and the London Stock Exchange, and to apply for a listing on the junior Irish market, the Enterprise Securities Market.

The move will allow existing shareholders in the bank to continue to trade their shares and will not affect their ownership of or their rights over the ordinary shares in the bank.

Section 60 of the Act says: "The court may order that any application under this Act, or any part of such an application, shall be heard otherwise than in public or may impose restrictions with regard to the disclosure in open court, publication or reporting of any material that might be commercially sensitive."

The sweeping legislation, which allows the Minister to restructure banks by compelling them to take State capital or forcing them to sell deposits or loan books, was enacted on Tuesday after it was signed into law by President Mary McAleese.