Shareholders have just days to prevent a fifth Irish bank falling into State hands

THE SHAREHOLDER revolt at Irish Life & Permanent’s extraordinary general meeting may yet prove academic when the Minister for Finance proceeds with a legal case to recapitalise the company.

The company required shareholder approval before accepting up to €3.8 billion from the Government under the EU-IMF plan to over-capitalise the banks.

But turkeys were never going to vote for Christmas.

This was the first shareholder vote against the recapitalisation of an Irish bank during the three-year crisis.

“We are the owners of this company, not the Minister for Finance, not the ECB,” one shareholder, John O’Donoghue from Co Limerick, told the egm at the D4 Hotels in Ballsbridge, Dublin.

Chairman Alan Cook told about 300 shareholders that he would raise their concerns with Noonan when he met him.

“We will challenge the situation we find ourselves in,” he said.

Shareholders were furious that the company had a manageable level of capital to raise last year only to be hit with a €4 billion bill following the March stress tests.

“How did we get into this mess?” asked a shareholder, who wanted to know why Irish Life – the “jewel in the crown” – was being sold.

Others queried whether investors had been sought to avoid nationalisation. “We have explored every option,” said Cook.

One shareholder pointed to the decision by D4 Hotels to open a supermarket in Ballsbridge and suggested that the company consider converting Permanent TSB bank branches into supermarkets to make money. “Every little helps, Mr Chairman,” he said.

One woman said the meeting was a repeat of what Anglo Irish Bank shareholders went through in the Mansion House in 2009, when that bank was nationalised.

Jimmy Carroll said that he had relied on the company’s dividends to pay for his summer holidays and on the shares for his retirement.

One shareholder said that it was “outlandish that a gentleman from Malta had to come over here and show leadership”, referring to rebel shareholder Piotr Skoczylas, who was elected to the board.

The shareholder battle will move to the High Court when the Minister asks a judge for permission to overrule shareholders and recapitalise the company.

The Minister plans to inject up to €2.7 billion by the end of the month to meet the capital target under the EU-IMF deal.

This gives shareholders just days to prepare their case and prevent a fifth Irish bank falling into State hands.

Given the legal powers open to the Minister, this will be difficult.