Shareholders lose Irish Life challenge

The High Court has cleared the way for the completion of the €1.3bn sale of Irish Life and Permanent’s life assurance business, the Irish Life Group, to the finance minister.

Mr Justice Michael Peart dismissed a challenge by some shareholders of Irish Life and Permanent Group Holdings in the High Court yesterday aimed at quashing a direction order for the purchase of Irish Life granted last March to the minister under Section 9 of the Credit Institutions (Stabilisation) Act 2010.

Mr Justice Peart found the shareholders lacked the legal standing to challenge the direction, and dismissed their case as they were shareholders of the parent company and not ILP itself.

The Government owns more than 99.8% of ILPGH after injecting €2.7bn into the group in July last year, resulting in the shareholders’ equity in ILPGH being diluted from 100% to 0.2%.

In the proceedings, lawyers for the minister argued the sale was part of the recapitalisation of ILP as required by the Central Bank and the troika.

The minister claimed there was an urgency as the recapitalisation must be completed by the end of June or the bank could face sanctions. ILP also opposed the shareholders.

The action was brought by ILPGH shareholders Gerard Dowling, Padraig McManus, Piotr Skoczylas and Mr Skoczylas’s company, Maltese-based Scotchstonecapital Fund Ltd, J Frank Keohane, Georg Haug, John Paul McGann and Tibor Neugebauer.

They claimed the €1.3bn sale of Irish Life undervalued the “crown jewels” of ILP. They also claimed the direction order illegally forced ILP 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 also claimed.

Following the ruling, Mr Skoczylas, who represented himself during the nine-day hearing, said he intended to appeal the judgment to the Supreme Court.

The minister denied all the claims and argued no grounds had been identified to justify the direction orders being set aside.

If ILP is not recapitalised by the end of June it faces sanctions, including the possible revocation by the financial regulator of its licence to operate as a credit institution, it was claimed.

That could put 1,800 jobs at risk and result in the calling in of the government guarantee of €8bn bonds issued by ILP, the minister also submitted.

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