Fingleton (83) claims that he’s too sick to face IBRC civil action
DISGRACED banker Michael Fingleton has claimed he is too ill to face a civil action over his conduct at Irish Nationwide Building Society (INBS).
The move comes just over a year after a Central Bank of Ireland inquiry into the 83-year-old was controversially shelved due to his ill health.
Now a long-running legal action taken by INBS’s successor, Irish Bank Resolution Corporation (IBRC), could also fall by the wayside.
INBS lost €6bn between 2008 and 2010 and needed a State bailout, with its former chief executive being blamed by IBRC for causing or contributing to the massive losses.
In its lawsuit, initiated in 2012, IBRC’s special liquidators are seeking damages from Mr Fingleton for breach of contract, gross negligence and breach of duty.
They allege he exercised control over and enjoyed very significant responsibility for the commercial and development lending which led to the building society’s downfall.
At a brief hearing yesterday, the Commercial Court set February 23 as the date for the hearing of Mr Fingleton’s motion to dismiss the proceedings. Mr Justice David Barniville said Mr Justice Tony Hunt had agreed to hear the motion.
Mr Justice Hunt usually sits in the Central Criminal Court and the Special Criminal Court. Last October the Commercial Court heard all of its judges were “conflicted” and unable to hear the case.
The court also heard at the time that Mr Fingleton was about to undergo tests to determine his cognitive capacity and memory. Medical reports have since been submitted in support of his application to dismiss the case.
Mr Justice Barniville yesterday warned that if the motion hearing was to be delayed, updated medical reports might be required.
Mr Fingleton was chief executive of the building society from 1971 until April 2009.
IBRC alleges that from March 1981 until his resignation in 2009 the Irish Nationwide board delegated all of its powers for the effective management and control of the society to Mr Fingleton.
He is said to have had considerable autonomy and freedom from oversight. It is claimed an unusual and excessive concentration of decision-making power was in his hands and that Mr Fingleton approved lending for amounts in excess of €1m before the board had the opportunity to consider it.
Having previously been predominantly involved in residential lending, the building society increased its activity in commercial property lending in the early 2000s.
IBRC alleges Mr Fingleton failed in his duty to put in place appropriate policies and structures to enable the society to comply with its duties under law and to manage the greater risks involved.
It alleges that if adequate care had been exercised, Mr Fingleton would have been summarily dismissed not later than December 2007.
However, he was subsequently awarded performance bonuses of €1m and €221,000 for 2008 and 2009 respectively.
Mr Fingleton has denied negligence, claiming he prudently sought to reduce the exposure of the society, including by building up liquidity, before the global economic downturn and the consequent collapse of the property market in 2008.
The former Irish Nationwide boss previously mounted failed legal challenges to the Central Bank inquiry in the High Court and Court of Appeal, before the probe was halted on health grounds.
The Irish Independent revealed last year the Central Bank was entitled to recover its legal costs of €467,000 for those cases from Mr Fingleton. The former INBS chief executive retired with a pension pot of €27.6m.