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Thursday 21 September 2023 Dublin: 8°C
# Irish Nationwide
Bankers whose building society got a €5.4 billion bailout claim an investigation is "unconstitutional"
Irish Nationwide was folded into IBRC after its bailout.

THE CENTRAL BANK’S inquiry into alleged regulatory breaches at Irish Nationwide Building Society is a breach of the constitutional rights of a former director and officer of the troubled lender to a trial by an independent judge, the High Court has heard.

The claim was made on behalf of John Stanley Purcell who was a director of and company secretary of INBS until his retirement in 2010.

Purcell, along with several other former officers of INBS, including ex-CEO Michael Fingleton, are the subject of a Central Bank inquiry into allegations that certain prescribed contraventions were committed by INBS and persons concerned with its management, between August 2004 and September 2008.

In High Court proceedings against the Central Bank, Ireland and the Attorney General, Purcell argues the inquiry, and the powers it purports to exercise, are unconstitutional.

Purcell’s lawyers today asked Mr Justice Robert Eager for an injunction to be put in place until his constitutional challenge against the inquiry, brought under Part III C of the 1942 Central Bank Act, has been determined.

The Central Bank, represented by Paul Gallagher SC, Remy Farrell SC and Paul Anthony McDermott Bl, opposes both the challenge and the application for an injunction.

In his challenge Purcell claims the Central Bank inquiry will act in a manner that is expressly reserved for the courts which is in contravention of Article 34 of the Constitution.

The inquiry also breaches Purcell’s constitutional right to a trial, under Article 38 of the Constitution, and his rights under the European Convention on Human Rights, it is further claimed.

Seeking the injunction barrister John Rogers SC, who appeared with Reg Jackson for Purcell, told Judge Eager that his client, along with Michael Fingleton and three others, were being subjected to an inquiry which was “in the nature of a criminal trial.”

He said Mr Purcell, if found to have done something wrong by the inquiry, could face a fine of up to €500,000 and be disqualified from holding a senior position in a bank.

The inquiry, counsel said, was an attempt by the Central Bank to potentially expose Mr Purcell to a disqualification and a monetary penalty that “would not be available in a trial before a jury.”

Those conducting the inquiry could not be described as being independent in the same manner that a judge is, Mr Rogers said. Under statute the persons that have been appointed to conduct the inquiry are “agents of the Central Bank”, counsel said.

Mr Rogers said the injunction is being sought because the Central Bank refused requests not to proceed with the inquiry until the constitutionality of the inquiry has been determined.

While the inquiry is due to commence in February, some preliminary matters, including a requirement that Purcell complete and submit a detailed questionnaire to the inquiry, have to be concluded by the end of this month.

Purcell, of Fortfield Park, Terenure, Dublin, resigned as a director of INBS in 2010. Irish Nationwide was nationalised in 2010 after receiving a €5.4 billion bailout. It was folded into Irish Bank Resolution Corporation in 2011, alongside Anglo Irish Bank, for wind down. IBRC was liquidated by the State in February 2013.

The hearing continues.

Aodhan O'Faolain and Ray Managh