An inquiry into Irish Nationwide Building Society (INBS) is set to consider this week how it can proceed with public hearings that have effectively been delayed since the summer due to the ill health of the lender's former managing director, Michael Fingleton.
The three-person panel presiding over the inquiry, led by chairman Marian Shanley, is scheduled to hold an "inquiry management meeting" on Tuesday in public, according to a notice published on the Central Bank's website.
The Irish Times understands t the meeting will consider whether the inquiry should continue public hearings in Mr Fingleton's absence, stay the case against him, or adjourn everything further.
Alleged breaches
The Central Bank decided in 2015 to set up the inquiry into the actions of five former INBS executives and directors, including Mr Fingleton, in relation to a series of alleged breaches of financial laws. Some 26 witnesses gave evidence at public hearings between last December and June as the inquiry looked into the first of seven so-called suspected prescribed contraventions, the alleged failure of the society's credit committee to carry out its duties properly.
However, it emerged in October that public hearings had been delayed since the summer due to what the Central Bank referred to as the “illness of one of the persons concerned”, known to be Mr Fingleton (81).
Settlement
Last February, one of the five men, former INBS chairman Michael Walsh, reached a settlement with the regulator, in which he was fined €20,000 and banned from managing a regulated financial firm for three years. While Mr Walsh was not involved in the day-to-day management of the lender, which cost taxpayers €5.4 billion to rescue during the crisis, he admitted his ultimate responsibility for certain breaches.
One of the four remaining men, INBS’s former head of commercial lending, Tom McMenamin, entered a settlement agreement with the Central Bank last week. While the Central Bank said that his actions merited a €250,000 fine, the regulator said that such a sum would likely have pushed Mr McMenamin into bankruptcy, which it is prohibited under law from doing.
Barred
Mr McMenamin, who is retired, was ultimately fined €23,000 and barred from taking on a senior role in a regulated financial firm for 18 years.
Mr McMenamin admitted to participating in multiple breaches of financial services law by INBS, including not properly documenting commercial loan applications, not following loan approval processes, and not following processes relating to the size of loans relative to a property’s value. Other violations included not monitoring commercial loans and the failure of the company’s credit committee to discharge its functions.
The remaining individuals subject to the inquiry are INBS's one-time finance director John Stanley Purcell and former head of UK lending Gary McCollum.
