Fingleton faces day in court over €1m bonus

Former Irish Nationwide boss Michael Fingleton is facing court proceedings to have the €1m bonus he received in 2009 taken off him.

The civil action being brought by the special liquidator for IBRC may also see Mr Fingleton sued for a portion of his pension pot, which had stood at €27m when he retired, but which is believed to have been substantially reduced since then.

The former chief executive and four other former executives also face action over their management of the financial institution, which had to be nationalised at a cost of €5.4bn to the taxpayer.

The civil proceedings will be the first time the men will face questions in public about one of the biggest financial collapses in history.

The case is being brought by KPMG, which is the special liquidator for IBRC. IBRC was responsible for running down the operations of Anglo Irish Bank and Irish Nationwide, and had originally initiated these proceedings in Mar 2012.

Representatives for the special liquidator declined to comment.

Papers were served on former directors Terence Cooney and Stan Purcell, and former chairman Michael Walsh, on Tuesday night. Papers are scheduled to be served on Mr Fingleton and another former director, David Brophy.

It is believed that the former executives at the building society will face charges of breach of fiduciary responsibility and breach of contract.

The building society was the biggest casualty of the property boom. On a total loanbook of just over €10bn, it had eventual losses of €5.4bn.

Mr Fingleton has been widely criticised for his management style. A number of reviews of the failed institution uncovered inadequate corporate governance procedures and risk management controls. Mr Fingleton had been in charge of the building society since 1971.

It recently emerged that he took sole responsibility for making multimillion-euro loans and very often failed to draw up adequate documentation to support the loan process.

Mr Fingleton stood down in Apr 2009 following the announcement that Irish Nationwide had made a €280m loss for the previous financial year. He walked away with a €1m bonus and a €221,000 pay packet for the first four months of 2009.

The then finance minister Brian Lenihan demanded that he hand back the bonus. Mr Fingleton said in 2010 that he would return it, although he has since refused. The special liquidator claims he is not entitled to the bonus because of the state of Irish Nationwide at the time he stepped down.

Starting off as a mortgage provider in 1971, Mr Fingleton grew the building society into a prominent player in Ireland’s booming property sector in the 1990s and 2000s.

The Government has come in for a considerable amount of criticism for the failure to hold anybody to account for the banking collapse which cost the taxpayers €64bn.