Updated at 6.40pm
IRISH NATIONWIDE BUILDING Society’s former CEO Michael Fingleton and ex director John Stanley Purcell have launched High Court proceedings aimed at stopping the Central Bank from conducting an inquiry into alleged regulatory breaches at the financial institution.
The two, with others, are the subject of the Central Bank’s inquiry into allegations that certain proscribed contraventions were committed by both INBS, and certain persons concerned with its management, between August 2004 and September 2008.
The inquiry, in the event of any finding of wrong doing, has the power to impose a fine on an individual of up to €1 million.
Oppressive and unreasonable
Justice Michael White today following separate applications, granted lawyers acting for both men permission to bring judicial proceedings aimed at preventing the Central Bank from holding the inquiry.
Both are seeking various orders and declarations from the court in respect of the Central Bank’s decision to launch an inquiry which they claim is disproportionate, oppressive and unreasonable.
In their proceedings both former INBS executives say that proceeding with the inquiry is a breach of fair procedures and an unlawful breach of their rights to a fair hearing.
Lengthy delay
Barrister Francis Kieran, counsel for Fingleton, said his client’s challenge was based on a number of grounds including there had been a lengthy delay in bringing the inquiry.
It was also argued that the Central Bank could not conduct an inquiry of this nature because Fingleton, who retired in 2010, was no longer involved in the management of a regulated financial service provider.
Kiernan said Fingleton was also the subject of proceedings before the Commercial Court, also arising out of events at INBS before it was nationalised. The inquiry, at the very least, should not be conducted until those proceedings had been concluded.
Other grounds included an apprehension of bias on the part of the Central Bank and the fact that Fingleton had been the subject of a large volume of adverse media attention.
The Judge after granting leave to bring the proceedings, on a ex parte basis, adjourned the cases to 17 September when both parties would ask the High Court for a stay to be placed on the inquiry from proceeding pending the determination of the applications.
Unconstitutional
Purcell, who resigned as a director of INBS in 2010, had earlier sued the Central Bank and the State, claiming the inquiry and the powers it purports to exercise, are unconstitutional.
His lawyers claim the inquiry would act in a manner that is expressly reserved for the courts. Purcell, of Fortfield Park, Terenure, Dublin 6w, is seeking to block the inquiry until his constitutional challenge has been determined by the High Court.
The full hearings of the judicial review and constitutional issue are not expected to be heard until later this year.
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