INBS director Stan Purcell challenges Central Bank inquiry

Aodhán O’Faolain and Ray Managh

Former Irish Nationwide Building Society director Stan Purcell's legal bid to block the Central Bank from holding an inquiry into alleged regulatory breaches at the mortgage bank is to be heard in the High Court in a fortnight's time.

Mr Purcell is one of the subjects of the inquiry into allegations that certain proscribed contraventions were committed by both INBS and certain members of management between August 2004 and September 2008.

In proceedings against the Central Bank and the State, Mr Purcell, of Fortfield Park, Terenure, Dublin, claims that the inquiry, and the powers it purports to exercise, are unconstitutional.

As part of his action he wants an injunction restraining the inquiry going ahead until his constitutional challenge against it has been determined.

The High Court has given Mr Purcell leave to serve short notice of his application for injunctions. His legal team had asked the Central Bank not to proceed with the inquiry until its constitutionality had been decided. The Central Bank has told him it intends to proceed with the inquiry.

While the inquiry is due to commence in February next, some preliminary matters, including a requirement for Mr Purcell to furnish it with a detailed questionnaire, were expected to be dealt with by him by the end of this month.

Mr Justice Donald Binchy was told Thursday by John Rogers SC, with Reg Jackson for Mr Purcell, that the various parties had agreed that the hearing for the injunctions can proceed later this month. He said a timetable for the exchange of sworn statements had been agreed.

Mr Justice Binchy fixed the hearing, expected to last three days, to begin on September 17th.

In his challenge, Mr Purcell claims the Central Bank inquiry would act in a manner that is expressly reserved for the courts and in contravention of the Constitution.

He claims the inquiry will have powers to impose penal sanctions on anyone against whom it makes adverse findings , including a fine of up to €1 million or disqualification from having a role in the management of a regulated service provider.

Mr Purcell also claims the inquiry breaches his constitutional and European Convention rights . He resigned as a director of INBS in 2010.

The building society was nationalised in 2010 after receiving a €5.4 billion State bailout. It was folded into Irish Bank Resolution Corporation in 2011 alongside the failed Anglo Irish Bank. IBRC was liquidated by the State in February 2013.