The Central Bank has disclosed almost €10 million of costs relating to running of public inquiries into individuals involved in the management of the failed Irish Nationwide Building Society (INBS) and Quinn Insurance Limited (QIL).
However, the information, contained in the Central Bank’s latest annual report, published on Wednesday, only gives a partial picture of total cost to date of the long-running INBS inquiry, as the key legal fees and inquiry members’ fees attached to this case will only be revealed once it has come to a conclusion.
The annual report said that operational costs of running both inquiries between 2016 and 2020 amounted to €7.82 million, with €4.17 million of this comprised of “professional fees”, covering technology and audio-visual services. Rent and utilities amounted to a further €1.5 million.
The Central Bank revealed that the QIL inquiry into former directors of the insurer, Liam McCaffrey and Kevin Lunney, which concluded last September after both men reached settlements, involved €1.89 million of additional fees. These included inquiry members' fees, legal professional fees and document management costs.
QIL, founded by businessman Seán Quinn in 1996, fell into administration in March 2010 after a hole was discovered on its balance sheet. It was taken over a year later by Boston-based Liberty Mutual Group.
While the public-hearing phase of the QIL inquiry took place over seven days in May 2019, the INBS inquiry has held sporadic public hearings since December 2017, mainly comprised of a concentrated block of public testimony in the first half of 2018.
Dropped case
During the period, the inquiry has dropped its case against INBS's long-standing managing director Michael Fingleton, due to the octogenarian's ill health, and settled with two of the other original five executives and directors subject to investigation: the society's former chairman, Michael Walsh, and one-time head of commercial lending Tom McMenamin.
Former INBS finance director John Stanley Purcell and erstwhile head of UK lending, Gary McCollum, are the only remaining subjects of the inquiry.
Most of the evidence in the final phase of the INBS inquiry, which started last October, has been given in private hearings, as it involves confidential information on 98 sample commercial loans granted to nine borrowers before the 2008 property crash.
INBS cost taxpayers €5.4 billion to rescue during the financial crisis, before its remains were folded in with Anglo Irish Bank in 2011. The combined entity, known as Irish Bank Resolution Corporation (IBRC), was put into liquidation in 2013.
“It is anticipated that the [INBS] inquiry will conclude evidential hearings in 2021,” the Central Bank said in the annual report.
The Central Bank decided to defer an investigation into Anglo Irish Bank in 2011 to allow for criminal investigations and prosecutions against individuals to proceed, which resulted in a number of convictions between 2014 and 2018.
However, with the special liquidation of Anglo Irish’s successor company, IBRC, set to conclude next year, the Central Bank has decided not to reopen its so-called “administrative sanctions procedure” investigation.
