Former Irish Nationwide Building Society (INBS) managing director Michael Fingleton has denied that he was on the lender's key credit committee even though records list him as a member.
Mr Fingleton, whose stewardship of the lender between 2004 and 2008 the Central Bank is investigating, insisted on Tuesday that he was not on the committee, which reviewed big commercial loans, during the period on which the inquiry is focused.
In sharp exchanges with the inquiry’s senior counsel Brian O’Moore, Mr Fingleton said that he may have been listed as a member of the credit committee, but he was not actually on it.
Dominance
Mr O’Moore pointed out that a board meeting on December 21st, 2004 appointed Mr Fingleton to the committee. “Is it your evidence that, notwithstanding the board formally appointing you as a member, you were not really a member?”
“I did not consider myself a member,” Mr Fingleton told him. He argued that it would not have been appropriate for him to join the credit committee at the time, as the media and regulators were questioning his dominance of INBS.
The lender’s failure cost taxpayers €5.4 billion. The inquiry’s first module is looking at whether the credit committee failed to scrutinise large commercial loans in arrears, the lender’s exposure to specific customers or sectors or risks highlighted by auditors, advisers and regulators.
Mr Fingleton kept repeating that, had anyone raised it, he would have clarified that he was not a member of the committee, but was listed as such should he want to join it. “Nobody ever brought it up,” he said.
However, Mr Moore pointed out that a report, which INBS commissioned from accountants Deloitte, found that the credit committee was not following its own terms of reference.
He asked Mr Fingleton if it occurred to him that this was a good opportunity to clarify that he was not on the committee. “No, that did not occur to me,” Mr Fingleton replied.
Responses
Mr Moore then said a Central Bank review in July, 2006 highlighted that Mr Fingleton was a member of the committee but had failed to attended 27 meetings over the preceding two years.
“The obvious thing to say in response to this concern on the part of the Central Bank is that you were not a member of the credit committee, which is why you were not attending meetings,” Mr Moore argued. “You are named in the response but nobody says that you are not a member of the committee.”
Mr Fingleton suggested that whoever responded on INBS’s behalf must have assumed that he was not a member. “It’s strange that I did not address it head on,” he conceded.
He explained that others, including former finance director Stan Purcell would have written INBS's responses to these reports. Mr Fingleton admitted that he could have signed those replies without reading them.
“I had very competent people dealing with these things and I relied totally on them and could have just signed it, that’s it,” he said.
The inquiry is focusing on Mr Fingleton, Mr Purcell, former INBS commercial lending manager Tom McMenamin and Gary McCollum, who ran the society’s UK business.
