Business Opinion: As the nascent Irish Nationwide sales process starts to crumble around Michael Fingleton, the 120,000 members of the building society might feel entitled to an explanation, writes John McManus.

A decade after legislation was introduced to allow the demutualisation of building societies, the members of the Irish Nationwide are still waiting for their payday. And any Irish Nationwide member planning a Christmas holiday in the Caribbean in anticipation of a sale this year had better make alternative arrangements.

The only credible bidder to emerge into the public domain is a consortium of Bank of Scotland (Ireland) and Quinlan Private. But even that appears to be at risk of unravelling now. The other name in the frame, Landsbanki is clearly nervous and has sought information on Irish Nationwide's exposure to the troubled credit markets and would itself have to rely on the same markets for finance if it was to make a bid.

The third player, GE Money, may have no funding problems but as Tony Ryan and the other GPA investors could tell you, GE does not have much of a reputation for overpaying for assets.

The members of the society are entitled to ask how they came to this sorry pass. In his defence, Fingleton could no more have foreseen the global credit crunch that has decimated bank valuations than any one else. Well, that is not strictly accurate. Someone of his reputation should have seen it coming before the rest of us, but the truth is nobody saw it.

But that does not get around the fact that Irish Nationwide could have been demutualised at any stage over the last 10 years since the legislation came in and Fingleton has had numerous opportunities to take advantage of attractive market conditions. The happy former members of Irish Permanent and First Active can attest to this.

For some reasons that have never really been satisfactorily explained, Irish Nationwide eschewed demutualisation. We can say with some certainty that it was not due to some deep-seated attachment to the concept of mutual ownership for the benefit of all members. Whatever else it has done over the last decade, Irish Nationwide has not established a reputation for being cheaper, better or more customer focused than any of its rivals. The EBS, the other mutual, has at least tried to develop its business along these lines.

The Irish Nationwide has become a very serious player in the market for commercial lending, mostly to property developers. This now accounts for around 75 per cent of the business, with the residential mortgage business accounting for the rest.

From one perspective, this has proved a very astute move, and helped drive profits. The argument can be put forward that this would not have been possible - or at least more difficult - if Irish Nationwide had not had the flexibility that came about as result of its retained mutual status.

Equally, Fingleton's sustained and successful lobbying to have the laws governing demutualisation changed made sense in the context of this strategy.

Taking such a hybrid beast down the traditional demutualisation route - conversion to bank status and flotation - would have been difficult. And then there was the bar on any takeover of the business for five years post demutualisation.

The changes sought by Fingleton allow the straight sale of the mutual to another institution, by passing this complex and lengthy process.

From the perspective of the members, the path plotted by Fingleton has been something of a two-edged sword, the downside to which has now become clear.

The Irish Nationwide's exposure to the commercial property sector would have made a sale complicated at the best of times, but makes it downright difficult in the current climate. With property prices falling and widespread unease about the economy, it is not the time to be trying to shift a portfolio of Irish commercial property loans.

In many ways, a break-up of the society is the only show in town. And it looks as though the only serious player is half-hearted at best. Quinlan Private are said to be furious that their involvement has been made public at this stage, and Bank of Scotland (Ireland) has a policy of walking away under such circumstances.

Even allowing for the inevitable gamesmanship, it looks unlikely that a sale at a satisfactory price will be achieved in the short term. And if the doomsayers are proved right about the commercial property market in Ireland, then its value going forward could be significantly impaired.

It really does look as though Fingleton's strategy is unravelling and the members are entitled to accountability. The staff of the society may also question why a strategy was pursued which makes a break-up inevitable and their jobs redundant.