RYANAIR HAS lost a High Court bid to compel the financial services regulator to investigate whether Aer Lingus had breached EU market abuse regulations in how it informed the Government about its decision to close its Shannon-Heathrow route.
Mr Justice Peter Kelly ruled yesterday that the Irish Financial Services Regulatory Authority has a wide discretion whether or not to investigate any complaint and is also not required to say whether it is investigating or not.
The regulator is not obliged to make public the results of any investigation, he found, and he also noted the relevant regulations included an option to "privately caution" a body for market abuse.
Aer Lingus publicly announced its decision to close the Shannon route on August 7th, 2007. However, Ryanair, the largest shareholder in Aer Lingus with a 29 per cent stake while the Government holds 25 per cent, claimed Aer Lingus chief executive Dermot Mannion told RTÉ on August 12th last that the Minister for Transport was informed on August 3rd of the decision.
If Aer Lingus had informed one shareholder of its decision prior to informing other shareholders and the public, then it had breached an EU Market Abuse Directive and regulations related to insider dealing and market manipulation, Ryanair claimed.
On August 21st, 2007, its solicitors wrote to the regulator, asking it to investigate the matter and to make its investigation results public. Ryanair said it later learned Aer Lingus had told the Minister of its decision as far back as June 13th, 2007 and it again wrote to the regulator seeking an investigation.
A reply from the regulator on October 22nd, 2007 did not indicate if it intended to investigate and also stated it was not the regulator's policy to directly brief those who bring matters to its attention of the outcome of investigations. In further replies, the regulator said it was prohibited from disclosing confidential information to Ryanair under provisions of the Central Bank Act 1942.
In January 2008, Ryanair initiated judicial review proceedings seeking orders compelling the regulator to investigate and to make that investigation result public. Alternatively, it sought orders directing the regulator to decide if it was going to investigate or not.
The proceedings were brought against the regulator with Aer Lingus as a notice party and the sides agreed that, if certain preliminary legal issues were decided against Ryanair, its action must be dismissed. In his reserved judgment yesterday, Mr Justice Kelly found against Ryanair on all preliminary issues and dismissed the judicial review proceedings.
