Legal bid to stop sale of Irish Life to minister opens

The proposed €1.3bn sale of Irish Life and Permanent’s life assurance business, the Irish Life Group, to the Minister for Finance undervalues the company’s “crown jewels”, it was claimed before the High Court yesterday.

Mr Justice Michael Peart has begun hearing a challenge by some Irish Life shareholders aimed at quashing a direction order for the purchase of Irish Life granted by the High Court last March to the Finance Minister Michael Noonan under Section 9 of the Credit Institutions (Stabilisation) Act 2010.

The Government owns more than 99.5% of Irish Life & Permanent (IL&P) after injecting €2.7bn into the company in Jul 2011.

The minister contends the sale is part of the recapitalisation of IL&P as required by the Central Bank and the troika. The minister also claims there is an urgency to the matter as the recapitalisation must be completed by the end of June or the bank could face sanctions.

IL&P, a notice party to the action, also opposes the proceedings.

The action has been brought by a number of shareholders of Irish Life and Permanent Group Holdings plc, IL&P’s holding company. They are Gerard Dowling, Padraig McManus, Piotr Skoczylas and Mr Skoczylas’s company, Maltese-based Scotchstonepital Fund Limited, J Frank Keohane, Georg Haug, John Paul McGann, and Tibor Neugebauer.

The applicants contend the direction order is unreasonable and is invalidated by errors of law.

They claim the direction order illegally forces IL&P to sell a very valuable asset at undue expense of ILPGH shareholders and for the benefit of the minister. The order was instigated without adequate consultation and proper observation of fair procedures, they claim.

The minister denies all the claims and argues no grounds have been identified to justify the direction orders being set aside.

Yesterday, Mr Justice Peart said he would do whatever possible to ensure the court could rule on the case before the Jun 30 deadline.

The case is expected to last at least 10 days.