Michael Fingleton fails to halt Central Bank inquiry

Former Irish Nationwide Building Society chief executive Michael Fingleton has lost his High Court action aimed at preventing the Central Bank from conducting an inquiry into alleged regulatory breaches at the financial institution.

Mr Fingleton, along with several other former officials of INBS, are the subject of an inquiry, under Part III C of the 1942 Central Bank Act, which is due to begin hearings next month.

He challenged the bank’s decision to subject him to an inquiry, claiming it was unfair and unreasonable.

The Central Bank, which wants to inquire into allegations certain prescribed contraventions were committed by both INBS, and certain persons concerned with its management, between August 2004 and September 2008, had opposed the application.

Giving judgment yesterday, Mr Justice Seamus Noonan dismissed Mr Fingleton’s action, clearing the way for the inquiry to proceed.

Ex-Nationwide boss Michael Fingleton loses court action to block Central Bank inquiry https://t.co/GxI8aYTKKR

— David Murphy (@davidmurphyRTE) January 4, 2016

In his ruling, Mr Justice Noonan said Mr Fingleton had “not satisfied me that there is any unfairness inherent in the inquiry process to which he is subject.”

Mr Fingelton was not present in court for the decision.

The inquiry, in the event of any finding of wrongdoing, has the power to impose a fine on an individual of up to €500,000. INBS was nationalised and merged with the former Anglo Irish Bank into IBRC in 2011.

The Central Bank estimates the collapse of INBS cost the taxpayer €5bn, although the figure is disputed by Mr Fingleton.

Mr Fingleton is also the subject of proceedings before the Commercial Court, also arising out of events at INBS. Mr Fingleton also claimed that at the very least, the inquiry should not be conducted until those proceedings have been concluded.

The Central Bank had rejected all of Mr Fingelton’s arguments, and said there was nothing preventing the inquiry from proceeding as planned.

In his decision, Mr Justice Noonan dismissed all grounds of Mr Fingelton’s case. The 1942 act applies to Mr Fingleton, the judge said, and he was lawfully subject to the inquiry.

There had been no culpable delay by the Central Bank in conducting its investigation into Mr Fingleton resulting in any unfairness to him, the judge said.

The inquiry, and the elaborate procedures provided for in the 1942 act, ensured Mr Fingleton’s right to a fair hearing “is guaranteed”, the judge added.

Much of Mr Fingelton’s claim, the judge said, was “an attempt to pre-empt in advance issues before the inquiry that may or may not arise, or be determined by the inquiry itself.”

Any suggestion Mr Fingleton will be subject to any prejudice by the inquiry, he found, was “devoid of substance and without merit.”

The judge noted that the Central Bank referred in a sworn statement said annual reports for INBS from the years 2003 to 2008 show Mr Fingleton’s remuneration package amounted to €9.77m.

The Central Bank also avers that when his pension fund matures, it is worth approximately €30m.

”In the light of that the applicant’s complaints about equality of arms and the unfair costs burden on him of participating in the inquiry ring somewhat hollow,” the judge said.

The judge adjourned all outstanding matters in the case, including the issue of legal costs, to January 14.