Department of Finance refusal to publish report into INBS-Update-Central Bank investigation continues

[DCon]

Apparently, according to Newstalk (and Richard Curran who they interviewed today) the report is quite critical of Corporate Governance at INBS and the (alleged) Financial Regulator of the day by extension.

DoF want to keep it hidden.

Mickey Martin was on earlier and said he would be calling on Kenny and Gilmore to publish it

[PaddyJoe]

Richard Curran covered these reports in the SBP back in March 2011. The Post is behind a paywall now but there are a couple of posts by Boyracer on the pin that give a flavour of what's in them.
Note that Eamon Gilmore called for the reporst to be published as well.

The Fingleton files - Richard Curran -> http://www.sbpost.ie/news/the-fingleton ... 55085.html

Quote:
The original report found that Fingleton, who ran the society for over 30 years, was granted special powers by its board in 1981, which were reinforced twice in the 1990s.

The powers allowed Fingleton to personally set, vary or alter interest rates charged on loans and decide the fees to be charged on them. It also entitled him personally to make arrangements on loans with individual clients of the society.

The report found evidence of a litany of corporate governance failings at the society over many years, including:
• circumvention of the credit committee by Fingleton through the use of these special powers;
• evidence of loans granted before approval and the amounts lent out being different to the amount approved;
• evidence of the funds borrowed, being issued to associated companies rather than the borrowing entity;
• no formal process for extending loan terms;
• evidence of invoices for substantial sums being paid twice;
• millions paid for consultancy services to UK offshore companies linked to borrowers; and
• introduction fees being paid to developers for introducing other developers to joint venture deals

The probe also examined how, on a number of occasions, the price of development land being purchased by a society company from a developer increased substantially on the day of purchase without any obvious explanation.

Just before Fingleton retired, he is understood to have written a letter, supporting a borrower, saying that all of that borrower’s loans were on a joint-venture profit share basis and non-recourse.

This was challenged by the new management team that came in under current chief executive Gerry McGinn.




Tánaiste wants Irish Nationwide report published - Richard Curran -> http://www.sbpost.ie/news/ireland/tanai ... 55216.html

Quote:
Tánaiste Eamon Gilmore wants to see the publication of a controversial report into corporate governance failings at Irish Nationwide while the society was run by former chief executive Michael Fingleton.
Gilmore raised the issue of publication of the confidential report, compiled by Ernst & Young and solicitors McCann FitzGerald, in the Dáil last October while on the opposition benches.
A spokesman for Gilmore told The Sunday Business Post last week that the Tánaiste remained of the view that it would be desirable for the report to be published.
He added however, that the decision ‘‘would be one for the line minister (Minister for Finance), who would have to take legal advice on it’’.
‘‘This is just one of a range of legacy issues arising from the banking crisis that the government has not yet had an opportunity to consider," he said.

http://www.thepropertypin.com/viewtopic.php?f=19&p=486607

[Holly]

...
Note that Eamon Gilmore called for the report to be published as well.
Something must have happened to change his mind.

[C. Flower]

When was this report completed ?

Any file to go to the DPP?

[PaddyJoe]

When was this report completed ?

Any file to go to the DPP?

It's with the Financial Regulator, it seems. However, the DCE has no power to follow it up:

THE OFFICE of the Director of Corporate Enforcement has no power to investigate practices at Irish Nationwide as building societies do not fall under its remit, a spokesman for the office said.

The spokesman said the office could not comment on reports around corporate governance failures at the building society under former chief executive Michael Fingleton as it did not cover entities such as the building societies.

“Because building societies are not registered as companies under the Companies Act we have no role in relation to building societies,” said the ODCE spokesman.

Details of the reports into Irish Nationwide were published in yesterday’s Sunday Business Post.

The reports by accountants Ernst Young and solicitors McCann Fitzgerald found Mr Fingleton had been granted special powers, allowing him to circumvent the credit committee which approves the society’s loans.

These powers allowed Mr Fingleton to set or alter interest rates on loans and fees to be charged.

The reports said loans were advanced before approval and that the sums advanced were different from the loans approved.

There was also no formal process for approving the extension of loan terms and they uncovered evidence that loans were given to associated companies rather than the borrowing entity.

The reports were forwarded by the new management at Irish Nationwide to the Central Bank.
http://www.irishtimes.com/newspaper/finance/2011/0314/1224292061647.html

[PaddyJoe]

Financial Regulator gets damning reports on Irish Nationwide
Sunday, March 13, 2011 - 10:05 AM

The Financial Regulator has received several damning reports on corporate failures at Irish Nationwide covering the time during which Michael Fingleton was at the helm.

The documents were put together by teams of accountants and solicitors, who were asked to examine specific issues raised in a seperate report given to the Regulator last year.

That document highlighted that the board gave special powers to Mr Fingleton, who ran the society for more than 30 years, in 1981.


Read more: http://www.irishexaminer.com/breakingnews/business/financial-regulator-gets-damning-reports-on-irish-nationwide-497056.html#ixzz1gVcR2Q1J
http://www.irishexaminer.com/breakingnews/business/financial-regulator-gets-damning-reports-on-irish-nationwide-497056.html

[C. Flower]

Without Company Law, does that perhaps mean that only the laws on fraud, theft, negligence (?) etc. apply? Unless the INBS or Fingleton was sued by an aggrieved party ?

[ang]

The reports were forwarded by the new management at Irish Nationwide to the Central Bank.

Pressure Honohan and Elderfield to release.

[C. Flower]

It's unclear from this who commissioned the reports and for what purpose.

[ang]

Michael wants it published :-


Officials say the reports are confidential and subject to legal privilege.

Read more: http://www.breakingnews.ie/ireland/martin-demands-publication-of-irish-nationwide-report-532178.html#ixzz1gVgpcpF2

[PaddyJoe]

It's unclear from this who commissioned the reports and for what purpose.

DOF, Central Bank, FR, Lenihan?

Minister for Finance (Deputy Michael Noonan): I propose to take Questions Nos. 75 and 78 together.

Following the State’s investment of capital into Irish Nationwide Building Society, the Board of the Society was asked to identify and address the “legacy issues” of the Society and to co-operate with, where relevant, the appropriate regulatory or other authorities. To assist them in this work, the INBS Board engaged Ernst and Young and McCann Fitzgerald, and initial reports from these organizations were provided to the INBS Board in 2010. Following additional work on this matter, a further report was presented to the Board of the Society in June 2011.


http://debates.oireachtas.ie/dail/2011/07/06/00066.asp

[C. Flower]

DOF, Central Bank, FR, Lenihan?

http://debates.oireachtas.ie/dail/2011/07/06/00066.asp

That seems clear enough. INBS were requested to prepare the report. The report belongs to INBS. They are not even obliged to give it to the Government, unless some kind of legal contract was made.

It is possible that INBS got some kind of agreement that the contents of the report were to be confidential. Or even, god forbid, some kind of protection for themselves preventing it from being used in evidence in legal action.

How gentlemanly of them all.

Michael Martin is demanding that the report be released. Firstly, the "terms and conditions" of any agreement on the report between INBS and the Government should be released.



The Department of Finance said that it has no plans to publish the work from Ernst and Young accountants and McCann Fitzgerald solicitors.

Officials say the reports are confidential and subject to legal privilege.

Read more: http://www.breakingnews.ie/ireland/martin-demands-publication-of-irish-nationwide-report-532178.html#ixzz1gVp3K3FR

[DCon]

That seems clear enough. INBS were requested to prepare the report. The report belongs to INBS. They are not even obliged to give it to the Government, unless some kind of legal contract was made.

It is possible that INBS got some kind of agreement that the contents of the report were to be confidential. Or even, god forbid, some kind of protection for themselves preventing it from being used in evidence in legal action.

How gentlemanly of them all.

Michael Martin is demanding that the report be released. Firstly, the "terms and conditions" of any agreement on the report between INBS and the Government should be released.




Read more: http://www.breakingnews.ie/ireland/martin-demands-publication-of-irish-nationwide-report-532178.html#ixzz1gVp3K3FR


Martin should **** until he commissions and publishes a report into FF corruption from 1960 - 2010

[C. Flower]

From your Daíl link, PaddyJoeMc.


The Deputy may also wish to note that the above process is without prejudice to any investigation or action that the Central Bank, as independent regulator of credit institutions, may take on any relevant matter and that copies of the reports referred to above have also been provided to the Central Bank.

This clarifies that the regulatory bodies are not involved in the writing of these reports and don't "own" them.

Why in the name of god has this been handed over to Shatter to deal with?


Following recent discussions with the NTMA, to whom certain of my banking functions are currently delegated, the Board of the newly merged Anglo/INBS (Irish Bank Resolution Corporation) has undertaken to advance particular items raised in the recent report to the INBS Board.

Sure, it's only small change. Why would the public want to know what went on ?


Mr Fingleton stepped down from the building society in April 2009 following the controversy arising over the payment of a €1 million bonus. Irish Nationwide has received €5.4 billion from the State to cover losses on a loan book worth €12 billion at its peak. The society is to be wound down.

http://www.irishtimes.com/newspaper/finance/2011/0314/1224292061647.html

Was this report requested by the Fianna Fail government ?

[C. Flower]

Conclusion: there is not and never has been a Public Enquiry or investigation into what happened at INBS, and Michael Martin knows this quite well.

[DCon]

Conclusion: there is not and never has been a Public Enquiry or investigation into what happened at INBS, and Michael Martin knows this quite well.

Question: Why the hell not?

[jmcc]

Michael wants it published :-Must be some names mentioned other than the usual FFers.

Regards...jmcc

[C. Flower]

Must be some names mentioned other than the usual FFers.

Regards...jmcc

Michael knows quite well, I suspect, that it cannot be published.

Was it commissioned by INBS under the FF regime?

[C. Flower]

But don't worry, Alan Shatter will "advance" things.

[TotalMayhem]

Why would the public want to know what went on ?

That's the Irish civil service for you... making sure, Paddy doesn't get to know.

[C. Flower]

That's the Irish civil service for you... making sure, Paddy doesn't get to know.

A voice from the grave - Lenihan, on the Nyberg Report -

http://www.irishtimes.com/newspaper/ireland/2011/0421/1224295160058.html


THE NYBERG report was damning of the Financial Regulator and the Central Bank, Fianna Fáil finance spokesman Brian Lenihan said. It concluded that they were aware of the problems in Anglo and in Irish Nationwide in particular, he added.

“The dependence on foreign funding and the concentration of lending in the property sector was clear from their balance sheets and the governance issue at the Irish Nationwide Building Society appeared to be well-known by the relevant authorities,’’ said Mr Lenihan.

He added that there was sufficient information available to the regulator to take decisive action in the case of both institutions.

Lending, said Mr Lenihan, had not been scrutinised and there was an unwillingness to engage in any detail, or what was possibly perceived to be intrusive verification, to establish if the banks were behaving in a prudent manner.

A preliminary assessment that the position was drifting into a crisis was never made in the first place, he added.

Mr Lenihan said the report did not accept that lack of resources or powers was a reason for the failure of the regulator to intervene. He added that while the Department of Finance had identified various risks to the economy, no single comprehensive analysis, integrating those risks and assessing their implications for the economy, was carried out.

Is the problem here that it is the Regulator's role to investigate Building Societies, and their own actions are under question ?

I'm not familiar with the law as it applies to Building Societies.

http://www.irishtimes.com/newspaper/ireland/2011/0421/1224295160065.html

Noonan's statement on Nyberg was all fudge - nothing about how the law would be applied to people who had broken it during the boom.

[Captain Con O'Sullivan]

Noonan is just as corrupt as Lenihan in that he has vested interests to protect and it is now becoming obvious. The Fianna Fail v Fine Gael/Labour labels are just bread and circuses for the dummies.

Noonan had a meeting with a Whistleblower on the Irish banking sector and from reports of that it is clear that Noonan does not want to told of criminality and wants only to continue the cover up of white-collar crime Ireland built into the establishment and that includes senior civil & public servants. Neither he nor his department have taken any action on recorded breaches of the law in the Irish financial sector and clearly don't intend ever to act upon sold information provided.

This so-called Republic isn't just a failed state but it is a corrupt oligarchy who are best represented in it and the sooner the fake 'Republic' is killed off the better in favour of a real Republic- the one that was announced and then aborted by gombeen men after 1916.

[PaddyJoe]

These reports have been sent to the Gardai, according to Tom Lyons:

Reports into the questionable lending practices and corporate governance failings of Irish Nationwide, the toxic building society that cost the taxpayer €5.4bn, have been passed on to the gardai.

Minister for Finance Michael Noonan revealed for the first time last week that two reports by McCann FitzGerald, the law firm, and Ernst & Young, the accountants, into the society had been sent not only to the Central Bank but also to the gardai.
http://www.independent.ie/business/irish/reports-on-toxic-nationwide-sent-on-to-the-gardai-3031848.html

[Sidewinder]

Passed on to the Gardaí, yeah sure....when every single Garda in the country with a bit of ambition depends on political patronage to advance past a certain rank.

Rotten stupid primitive mucksavage corrupt gombeen statelet. There's probably backwaters in Africa or South/Central America that have better governance than Ireland.

[Captain Con O'Sullivan]

Ah now ... sure to the ringing of a sombre bell on a rainy day in May there may be an enclosed carriage seen being pulled by a pair of black horses wearing midnight silk plumes ... an urchin will pull at the sleeve of his mammy and ask, "mammy what's that?"

"It is one of these files being sent to the DPP, Mickey. Make sure you cross yourself now when it passes as it is very bad luck in Ireland not to take note of files being sent to the DPP. Offer up a short prayer to St Governata of the Saintly Island, patron saint of Making Sure Something Is Seen To Be Done and turn around three times."

"Jayze, Ma. Why don't they use a taxi though?"

"Because the files are so full of shyte it won't make any difference if the horses add theirs, son. Now give us a hand ripping up these cobble stones."

[PaddyJoe]

An update on INBS in the IT today from Simon Carswell.

THE CENTRAL Bank has taken witness statements from former staff of Irish Nationwide as part of its investigation into reckless lending by the former building society during the tenure of chief executive Michael Fingleton.

The Central Bank investigation, led by the regulator’s enforcement division, is looking in particular at lending by the building society at the height of the property boom, 2004-2008, when most of the building society’s losses, which have led to a €5.4 billion Government bailout, were incurred.

The Central Bank said the investigation was being conducted under its “administrative sanctions procedures into historic lending practices at INBS”.
http://www.irishtimes.com/newspaper/finance/2012/0820/1224322497651.html

Mr Noonan said in February the reports had also been passed to the Garda and they could not be published before the conclusion of the Central Bank’s investigation, any Garda investigation and civil legal proceedings taken by the former Anglo Irish Bank, which is winding down Irish Nationwide.
So several decades after hell freezes over, then?;)
Meanwhile former Anglo, IRBC, "issued legal proceedings against Mr Fingleton and other former directors of the building society at the end of March over breach of contractual obligations"
The Office of Corporate Enforcement's remit does not allow it to investigate INBS.
Why its remit has not been changed to allow it to investigate INBS could make for an interesting story.

[PaddyJoe]

This report will feature in Richard Curran's documentary tonight.

he report, by consultants Ernst & Young and solicitors McCann Fitzgerald, was commissioned by the chief executive who replaced former boss Michael Fingleton.
The document highlighted poor loan performance, poor lending practices and inadequate credit risk management records.
The report has been uncovered by the makers of documentary ‘Inside Irish Nationwide’, which airs on RTÉ One at 9.40pm.
The report found that €6.6m was paid into a trust company based in Jersey for which no documentation existed.
It said €10m was used to settle a legal dispute but there was no paperwork regarding the litigation.
It said there were €2m of invoices which the building society paid twice.
This issue went unchallenged and was not followed up.
The report said there was €435,000 paid to a company but when it was checked by Ernst & Young it emerged the firm did not exist at the address which had been specified.
http://www.rte.ie/news/business/2013/0211/367262-irish-nationwide-report/

[C. Flower]

This report will feature in Richard Curran's documentary tonight.

http://www.rte.ie/news/business/2013/0211/367262-irish-nationwide-report/

Role of the Central Bank needs to be questioned. They knew in 2000 and in 2005 again that there were serious irregularities with Fingers operations and did nothing.

http://www.publicinquiry.eu/

[C. Flower]

RTE on this now.

[C. Flower]

Fingleton was "happy to give journalists loans to buy their first homes"

[Spectabilis]

He was Catholic when so many of the established bankers were Protestant? Oh, my word:rolleyes:

Fabulous how Christian ideals informed their practice.:(

[PaddyJoe]

He was Catholic when so many of the established bankers were Protestant? Oh, my word:rolleyes:

Fabulous how Christian ideals informed their practice.:(

The Bank of Ireland in particular was always perceived as a bastion of the Ascendancy. Sean Fitzpatrick also famously railed against the unprintable Protestant so and sos who ran Irish banking. :)

[C. Flower]

Not a whole lot new so far is there ?

[PaddyJoe]

Not a whole lot new so far is there ?

No. It's a very well made doc but so far just a rehash of what's already known.

[Dr. FIVE]

No mention of soft loans and little on the Central Bank/Regulator

[Spectabilis]

The Bank of Ireland in particular was always perceived a bastion of the Ascendancy. Sean Fitzpatrick also famously railed against the unprintable Protestant so and sos who ran Irish banking. :)



AIB in the 60's emerged from the amalgamation with the the Munster and Leinster bank, the Provincial bank and the Royal bank of Ireland. Bank of Ireland amalgamated with the National Bank of Ireland. I always thought it was AIB that was regarded then as having the ascendency background.

Neither 'ethos' provided an ethical banking system in the nineties/noughties.

[C. Flower]

No. It's a very well made doc but so far just a rehash of what's already known.

Frustrating.

Ah... Claims he was promised indemnity (Lenihan) if he returned the 1 million golden handshake.

Letter from Brian Lenihan 2009 said there had been no such agreement.

[Baron von Biffo]

Frustrating.

Ah... Claims he was promised indemnity (Lenihan) if he returned the 1 million golden handshake.

Letter from Brian Lenihan 2009 said there had been no such agreement.

Lenihan wasn't famed for an obsessive attachment to the truth.

[PaddyJoe]

Frustrating.

Ah... Claims he was promised indemnity (Lenihan) if he returned the 1 million golden handshake.

Letter from Brian Lenihan 2009 said there had been no such agreement.

Some interesting points from the E&Y report there.
-A 10 million legal suit settled but no supporting documentation
-435k paid to a company that didm't exist at the address given
-the price of a property deal that Gerry Gannon was involved in went up by 2 million on the day it was finalised. No documentation.
-130 million was lent to a Dublin developer called Tony Scully. All non recourse loans.
--Cyril Denis..486 million euro in loans.

[PaddyJoe]

This photo provides a pretty big clue as to why Fingleton never got reined in.


http://i46.tinypic.com/28hd9ck.jpg

[C. Flower]

This photo provides a pretty big clue as to why Fingleton never got reined in.

Men in Suits ?

[PaddyJoe]

Men in Suits ?

Photo that used to hang in the Dail bar for many years until Pearse Doherty kicked up a fuss about it. Fingleton and the Oireachtas golf club members;)

[PaddyJoe]

Tom Lyons on the Matt Cooper show a few minutes ago says that the IRBC liquidator is taking a civlil action against Fingleton and the former Nationwide board.
The idea is to force Fingers to return his one million euro bonus and possibly to sue the former directors for damages due to their negligence in making bad loans.
Sounds like some juicy legal fees on offer there.

[C. Flower]

Tom Lyons on the Matt Cooper show a few minutes ago says that the IRBC liquidator is taking a civil action against Fingleton and the former Nationwide board.

The idea is to force Fingers to return his one million euro bonus and possibly to sue the former directors for damages due to their negligence in making bad loans.
Sounds like some juicy legal fees on offer there.


God forbid that any public body should take action. :(

[PaddyJoe]

RTE:

Representatives of the special liquidator of IBRC served papers on three former directors of Irish Nationwide last night.
It is understood the legal action relates to their stewardship of the building society.
Papers were served on former directors Terence Cooney and Stan Purcell, and former chairman Michael Walsh.
It is understood that it is intended that papers will be served on former managing director Michael Fingleton and another former director David Brophy.
The development follows a step by IBRC to last year to take action against the directors of the building society.
The bank filed a plenary summons in the High Court in March 2012 so its legal action would not be constrained by time limits under the statute of limitations.
It was speculated the legal action related to alleged breach of contract, breach of fiduciary and breach of duty of care.
http://www.rte.ie/news/business/2013/0320/377617-ibrc-in-civil-action-aginst-nationwide-directors/

[PaddyJoe]

Interesting. Last year IRBC were taking legal action against six members of the Irish Nationwide board. The six were Fingleton, Michael Walsh, Stan Purcell, Terence Cooney, David Brophy and Con Power.
Now it's down to just the first five and Con Power seems to be off the hook.
Power was director of economic policy at the Confederation of Irish Industries - the forerunner of IBEC in the 1980's and was appointed economic adviser to Albert Reynolds after he became Taoiseach.
Charlie McCreevy appointed him to the chair of the Financial Services Ombudsman's Council in 2006 while he was also serving as vice-chairman of the Irish Nationwide Building Society.
Now why would he be dropped from the IRBC liquidator's legal action?

Friday 30 March 2012 Simon Carswell:

FORMER IRISH Nationwide chief Michael Fingleton and five other former directors of the building society are the subject of fresh legal actions taken by the former Anglo Irish Bank, which is winding down the former building society.
Two set of proceedings were filed against the six men yesterday relating to breach of contract.
The first is against Mr Fingleton and the second against former chairman Michael Walsh, former finance director and secretary Stan Purcell and board members Cornelius Power, Terence Cooney and David Brophy, according to legal papers filed in the courts.
Mike Aynsley, chief executive of Irish Bank Resolution Corporation, formerly Anglo, said the bank was issuing “protective plenary summonses” against the men and that these would “signal a potential series of actions to come”.
http://www.irishtimes.com/business/sectors/financial-services/ibrc-sues-former-irish-nationwide-chief-fingleton-1.491646