IL&P shareholders bid to overturn Noonan’s purchase of Irish Life

Shareholders of Irish Life & Permanent have brought a legal challenge aimed at setting aside the High Court’s approval for Finance Minister Michael Noonan to purchase the group’s life assurance business, the Irish Life Group, for €1.3bn.

Last month the president of the High Court made direction orders, under the Credit Institutions (Stabilisation) Act 2010, allowing the minister to purchase Irish Life from IL&P.

The proposed sale is part of the recapitalisation of Irish Life and Permanent as required by the Central Bank, the EU Commission, the IMF and the ECB and will result in the separation of IL&P’s life assurance and banking businesses.

The court was told that the minister’s decision to purchase the business “would benefit IL&P by €1.3bn, was in the best interest of the state, the company and the shareholders.”

However, earlier this week, a group of shareholders of IL&P’s parent company, Irish Life and Permanent Group Holdings plc, Gerard Dowling, Padraig McManus and Piotr Skoczylas and Mr Skoczylas’s company, the Malta-based Scotchstone Capital Fund Limited, initiated High Court proceedings seeking to have the direction orders set aside.

Yesterday Mr Justice Patrick McCarthy granted Irish Life & Permanent permission to bring a motion seeking to have IL&P included as a notice party to the shareholder’s challenge.

Brian Kennedy, counsel for IL&P, told the court that anything concerning the proposed €1.3bn sale of Irish Life to the minister would have an impact on his client. Counsel also asked the court that the matter be given priority.

IL&P’s motion was made returnable before Mr Justice Kearns later this month.

Last month, Mr Justice Kearns was informed the minister had decided to purchase Irish Life after attempts to sell the business to private bidders failed.

The judge was also informed that the proposed sale limits the potential for contagion of Irish Life from Permanent TSB and allows for more management focus on the respective separated businesses.

A report from the rating agency Standard & Poor’s indicated that the separation of Irish Life will result in its credit rating being raised.

Mr Justice Kearns also made a number of orders including ones allowing IL&P to enter into a share purchase agreement with the minister in respect of the entire issued share capital of Irish Life, enter into asset transfer agreements, as well as a confidentiality and data retention agreement.

The Government owns more than 99.5% of Irish Life & Permanent after injecting €2.7bn into the company in July last year.

However in separate legal proceedings currently before the High Court, Mr Skoczylas, his company, Mr Dowling and Mr McManus have challenged that move on grounds including that recapitalisation has put an unacceptable burden on Irish and EU taxpayers.

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