CHIEF EXECUTIVES and directors of a number of Irish public companies revealed yesterday that they are using shares in these businesses as security for personal loans.
The practice means there is a risk that the banks that loaned them the money could end up owning the stock should these executives fail to repay the debts.
According to documents published yesterday, Barry O’Connor, chief executive of housebuilder McInerney Holdings, has pledged just over 5 per cent of the company, or 10.2 million shares, as security for personal loans.
Between them, his fellow directors – Daniel McInerney, Mark Shakespeare, Tommy Drumm and Enda Cunningham – are using almost 5 per cent in total of the company’s shares as loan security.
Michael Chadwick, chief executive of Grafton Group, owner of DIY chains Atlantic Homecare and Woodies, is using 15.5 million shares, or 3.2 per cent of the company, as loan security.
Directors of insulation and building products manufacturer, Kingspan, are using more than 7 per cent of the company as security for personal loans. Chairman Eugene Murtagh and his brother Brendan are each using 3 per cent, or five million units, for this. Chief executive Gene Murtagh, is using 1.1 million. Dermot Mulvihill and Eoin McCarthy have also pledged Kingspan shares as security for personal loans.
Directors of a number of other companies are using up to 0.5 per cent of their companies’ stock as loan security. These include Irish Life Permanent chief executive, Denis Casey; Tommy Breen and Fergal O’Dwyer of DCC; Geoff Doherty of Greencore; and Liam Fitzgerald and Gary McGann of United Drug.
Yesterday was the deadline set for directors of companies listed on the London Stock Exchange to declare if they used shares in their companies as security for loans under a new rule introduced by Britain’s Financial Services Authority (FSA).
The rule did not extend to Irish-incorporated companies with a London listing, but some voluntarily published the information. It applies only to companies listed in London and incorporated in Britain and Northern Ireland.
