Irish Nationwide manager seeks to halt internal ‘scapegoating’ inquiry

AN Irish Nationwide Building Society branch manager has asked the High Court for orders halting an inquiry instigated by the society into matters relating to his own borrowings and the handling of accounts of customers, including that of a large property developer who owes the society about e36 million.

Noel Harrington, manager of the INBS branch at Cruise’s Street, Limerick, is prepared to co-operate with a “bona fide investigation” but is unhappy with how the INBS has treated matters to date, his counsel Mark Connaughton SC said yesterday.

Mr Justice Garret Sheehan will today continue the hearing of Mr Harrington’s application for various orders, including an order halting the inquiry as constituted pending the outcome of full proceedings.

Mr Harrington, with an address at The Hermitage, Mill Road, Corbally, Limerick, said in an affidavit he believed the society is engaged in “a scapegoating exercise”. He was concerned his employment was inserious jeopardy and about the effect of these matters on his good name in the financial services industry where trust was a very important component.

He said he had an explanation related to matters raised concerning his own borrowings and was not himself responsible for the handling of accounts of a property developer who owed some e36m to the society. He said those accounts were mandated and controlled from INBS head office “at a much higher level than me” and were almost “virtual” accounts as they were controlled form Dublin.

The court was told Mr Harrington, following inquiries dating back to September last over certain matters, was directed on January 26 last by the society to go on paid leave and return his branch office’s keys. He was also told it would be unnecessary for him to attend the branch pending the investigation.

Mr Connaughton said the Society contended the investigation was an independent investigation being conducted by a solicitor, Alistair Purdy, who was not an employee of the society.

While his client had no issue with Mr Purdy’s professionalism or his ability to conduct an inquiry fairly, the concern was that the investigation was directed exclusively into Mr Harrington’s conduct as an employee of the society, counsel said.

If the society wanted to inquire into the dealings referred to, it should do so in a much more open and transparent way, and not via a narrow attack on his client’s conduct, counsel said. If they wanted to investigate Mr Harrington’s conduct an existing, albeit dated, disciplinary procedure could be invoked.

Mr Harrington was also concerned about the investigation’s terms of reference. He was entitled to know what allegations were being made and none had been specified.

Mr Connaughton said the investigation referred to three matters and also to “any other matters”.

The first of the three matters related to Mr Harrington’s personal borrowings relating to properties at Catherine Street, Limerick. It was alleged Mr Harrington provided an incorrect lower redemption fee of e1.17m to a solicitor concerning those borrowings which was passed onto the society when the actual redemption figure was some e2.3m.

The second matter related to certain customer transactions which resulted in three customers taking proceedings against the society claiming the return of an arrangement fee of e75,000. The third matter related to the management and operation of substantial accounts of a property developer.

Mr Harrington said he was asked last September to attend a meeting with INBS chief executive Michael Fingleton who had asked him about certain accounts. Mr Harrington said when he told Mr Fingleton the account was not operated by Mr Harrington, Mr Fingleton had held up his hands and said he didn’t want to hear it and had directed him to go through the accounts with commercial staff.

The court also heard staff at the Limerick branch were all required by the INBS to complete questionnaires and attend meetings in Dublin in relation to the inquiry.

In opposing the application, the INBS contends it is wholly unnecessary, premature and ill-conceived. It contends the proposed investigation is an independent and necessary one and also rejects Mr Harrington’s claims to have fully co-operated with it. It has also denied Mr Harrington has been suspended.