THE PROPOSED €1.3 billion sale of Irish Life and Permanent’s life assurance business, the Irish Life Group, to the Minister for Finance undervalues the company’s “crown jewels”, it was claimed before the High Court yesterday.
Mr Justice Michael Peart has begun hearing a challenge by some Irish Life shareholders aimed at quashing a direction order for the purchase of Irish Life granted by the High Court last March to the Minister for Finance Michael Noonan under section 9 of the Credit Institutions (Stabilisation) Act 2010.
The Government owns more than 99.5 per cent of Irish Life Permanent (ILP) after injecting €2.7 billion into ILP in July last year, resulting in the shareholder’s equity in ILPGH being diluted from 100 per cent to 0.3 per cent.
The Minister contends the sale is part of the recapitalisation of ILP as required by the Central Bank and the “troika” of the European Commission, the International Monetary Fund and the European Central Bank.
The Minister claims there is an urgency to the matter as the recapitalisation must be completed by the end of June or the bank could face sanctions. ILP, a notice party to the action, also opposes the proceedings.
The action has been brought by a number of shareholders of ILP’s holding company – Irish Life and Permanent Group Holdings plc.
They are Gerard Dowling, Padraig McManus, Piotr Skoczylas and Mr Skoczylas’s company, Maltese-based Scotchstonepital Fund Limited, J Frank Keohane, Georg Haug, John Paul McGann and Tibor Neugebauer.
The applicants contend the direction order, made under section 7(2) of the 2010 Act, is unreasonable and is invalidated by errors of law.
They claim the direction order illegally forces ILP to sell a very valuable asset at undue expense of ILPGH shareholders and for the benefit of the Minister.
The order was instigated without adequate consultation and proper observation of fair procedures, they claim.
The Minister denies all the claims and argues no grounds have been identified to justify the direction orders being set aside.
