INBS inquiry adjourned due to illness of Fingleton
PATRICK Neary, the former financial regulator and a key witness to the Central Bank inquiry into alleged regulatory breaches at the collapsed Irish Nationwide Building Society (INBS), was unable to testify yesterday because the lender’s ex-boss, Michael Fingleton, was unavailable due to illness.
The appearance of Mr Neary had been keenly anticipated and drew a larger than normal media turnout.
However, the inquiry’s chairwoman, solicitor Marian Shanley, was forced to halt yesterday’s proceedings after Mr Fingleton, who turned 80 in January, informed the inquiry he was too unwell to attend.
The inquiry is expected to reconvene on Wednesday although it remains unclear whether Mr Neary, who presided over the institution throughout the boom years, will reappear later this week.
He is viewed as among the most important of the 25 witnesses summoned to give evidence by the Central Bank in its long drawn-out examination of INBS’s management in the runup to its nationalisation in 2010, which foisted a €5bn clean-up bill on taxpayers.
Earlier this year, Mr Fingleton, who has elected to represent himself at the inquiry, suffered another bout of ill health, which caused proceedings to be halted for six weeks.
Last week, the prominent banker, who ran INBS for 37 years, lost a battle with the regulator after the Court of Appeal dismissed a case arguing he cannot lawfully be subject to a Central Bank inquiry.
That challenge centred on Mr Fingleton’s assertion that he had retired before the inquiry was formally initiated in 2015 and the law does not allow for inquiry into his “past” conduct of the society’s affairs. Lawyers for the Central Bank had rejected that argument as “nonsense”.
Mr Fingleton, along with INBS’ former finance director, Stan Purcell, who has also opted to represent himself, as well as INBS’ head of commercial lending, Tom McMenamin and the ex-head of UK operations, Gary McCollum, are under investigation for seven alleged contraventions between August 2004 and September 2008.
The inquiry, established in 2015, has the power to impose fines of up to €500,000.
A fifth former executive, Michael Walsh, INBS’s chairman from 2001 to 2009, was excluded from the inquiry in February, as part of a settlement reached with the regulator, which resulted in a fine of €20,000. Mr Walsh, a former professor of banking and finance, was also disqualified from managing any regulated financial service provider for three years after admitting breaches of financial services law.
Last week, Vincent Reilly, a partner at auditor KPMG, told the inquiry INBS failed to undertake detailed analysis of its largest loan exposures in 2008 despite the slump in property prices that helped to eventually cripple the organisation.
He claimed draft accounts submitted to him in that year showed “no underlying detailed analysis of the material loans”.
In his opening statement to the inquiry in December, Mr Fingleton blamed the organisation’s downfall on the regulator, claiming the systemic failures of Ireland’s banking sector lay “firmly” with the Central Bank.
He said the inquiry had “artificially trumped up a case” to deflect attention from the Department of Finance and the Central Bank, and claimed the regulator and, previously, the financial regulator had full details and knowledge of the activity of INBS at all times.
He is viewed as among the most important of the witnesses