MICHAEL Fingleton, the former managing director of the collapsed Irish Nationwide Building Society, has rejected all allegations of regulatory breaches levelled at him by a Central Bank inquiry, and instead blamed the regulator for the lender’s collapse.
He claimed the systemic failures of Ireland’s banking sector lay “firmly” with the Central Bank.
In dismissing an accusation of lending failures at Irish Nationwide building Society (INBS), Mr Fingleton’s version of events contradicted evidence presented by his former finance director, John Purcell, who was a director of the company until his retirement in 2010.
In a witness statement, read out to the inquiry by Brian O’Moore, a member of the Central Bank’s legal team, Mr Fingleton said he only became a member of the Society’s credit committee in December 2007.
That view contradicted Mr Purcell’s declaration, also contained in a witness statement and read out by Mr O’Moore, that Mr Fingleton and INBS’s head of commercial lending, Tom McMenamin, were the “most senior and permanent members of the credit committee”.
Mr Fingleton – who turns 80 in January and presided over INBS for 38 years – was expected to make an opening statement at the inquiry, which is examining the actions of senior management in the run up to the failure of the building society in 2010.
However, the lengthy presentations from the Central Bank’s legal team mean that is now set to take place this morning. While Mr Fingleton is expected to address the three-member panel shortly after 10.30am today, written statements to the inquiry reveal he disputes each of the seven “suspected prescribed contraventions” levelled at him and four other directors – and that he regards the Central Bank as the chief culprit for the difficulties suffered by both INBS and the sector.
The accusations cover a four-year period between August 2004 and September 2008.
In a witness statement composed in August 2017, he accused the regulator of “suppressing material and vital information to financial institutions” in the lead-up to the crash and claimed its failure led to “serious consequences for lenders”.
He also insisted he was not a member of INBS’s credit committee until December 2007 and that a month later the rules governing the committee were changed.
The opening module of the Central Bank’s inquiry – the first-ever established by the regulator – has centred on the role of the Society’s credit committee. It probes whether it adhered to internal procedures set by the board, and whether its actions breached legal regulations, including the Building Society Act of 2005.
INBS collapsed in 2010, after two decades of rapid growth during which it lent extensively to property developers.
In 2011 it was shunted into the bombed-out Anglo Irish entity that would later become the Irish Bank Resolution Corporation (IBRC), as part of the Government’s bank bailout strategy.
The Society’s demise cost the taxpayer €5.4bn.
But the written correspondence submitted to the inquiry from each of the directors reveals sharply varying accounts of those final years.
Mr McMenamin insisted in a letter read out by Mr O’Moore that he was little more than an administrative assistant and characterised himself as a subordinate who answered directly to Mr Fingleton.
He stressed he was given no formal training for his role when he was promoted in 2001 and was parachuted into the position to take over the department’s reins following the exit of another executive.
The inquiry, which can levy penalties of up to €500,000 on the directors, continues today. It is likely to run well into next year with former financial regulator, Patrick Neary among the witnesses scheduled to appear.