Ex-INBS director ‘unable to recall’ key meeting
STAN Purcell, a former director at the now-defunct Irish Nationwide Building Society, told the Central Bank’s inquiry he was unable to recall a pivotal board meeting at the end of 2007 when the organisation decided to cease new lending and hand its credit committee sweeping new powers.
Mr Purcell joined the board of INBS in 1994 and resigned in March 2010.
Under cross-examination by Niamh Hyland SC, and a member of the inquiry’s legal practioner team, the former high-powered executive said he struggled to remember details of a fractious board meeting in December 2007, when the global financial crisis was unfurling.
Ms Hyland pointed out “two big decisions” were made at that time. She added that Dr Michael Walsh, the former chairman, had also characterised the discussion among the directors as “fairly heated” but said to Mr Purcell: “You do not recall anything about that meeting?”
Mr Purcell replied he could only go by the “minutes”, although he stressed he could recall the Society’s decision to halt lending as this impacted his area of business.
He said “at that time... we were in the relatively early stages of the credit crunch and there were increasing concerns about liquidity” and claimed, “we needed to make certain of where we stood with funding and where our cash position would be going forward”.
He also contradicted evidence given to the inquiry by INBS’s former head of commercial lending Tom McMenamin, and ex-boss Michael Fingleton.
Mr Purcell insisted the Society’s managing director had been a member of the credit committee “from 2001 onwards” – an assertion disputed by Mr Fingleton.
Mr Purcell also shot down claims by Mr McMenamin that he had played a key role in forming the lender’s credit committee. He argued that function was carried out by the board.
Asked by Ms Hyland whether the committee had discharged its duties by adhering to its terms of reference, he acknowledge it “had been deficient in that respect”. But when questioned about who should have monitored the credit committee’s role to ensure it was fulfilling its duties, Mr Purcell insisted this role fell to the internal auditor.
Mr Purcell is due to give evidence to the inquiry for the rest of the week.
He is one of four senior managers, including Mr Fingleton, under investigation by the Central Bank’s inquiry, which was established in 2015 and in this first phase is concerned with alleged governance failings in the lender’s credit committee.