The claims made by a senior Irish Nationwide manager in the High Court this week appears to confirm what many in Dublin financial circles have believed for years - lending at the building society is controlled by its managing director Michael Fingleton, writes Simon Carswell, Finance Correspondent

The taciturn building society boss usually gives little away when it comes to the society's internal business.

However, the case taken by the society's home loans manager, Brian Fitzgibbon, from Liscahill, Thurles, Co Tipperary, gave outsiders a unique glimpse into the society. His affidavit provided a revealing account of lending procedures and the breakdown in his relationship with Fingleton.

That breakdown - and Fitzgibbon's view that he was being scapegoated over loans to solicitors Michael Lynn and Thomas Byrne - triggered the court action.

His refusal to attend disciplinary hearings earlier this month to discuss those loans, among other issues, led to his suspension by the society.

Irish Nationwide has given loans of over €10 million to each of Lynn and Byrne, whose practices have been shut down and who are being investigated by the Garda and by the Law Society.

In Fitzgibbon's affidavit, on which he secured a High Court injunction restraining his suspension last week, he said that insofar as policies were not applied in relation to the solicitors' loans, this was "entirely in accordance with the practice prevalent within the society of paying out loans not recommended in the first instance by the credit committee or approved by the board and on a solicitor's undertaking or even where there is no undertaking in circumstances where the loan was personally approved and advanced by Mr Fingleton".

Fitzgibbon said he declined loans to Byrne on two occasions - in November 2006 and April 2007 - in the second instance, because he suspected that "something was not right".

Fingleton agreed to proceed with loan approval on the second occasion.

He said Fingleton also approved a loan of €4.1 million to Lynn for his family home, Glenlion House in Howth, Dublin.

Fitzgibbon said: "I understand that, when the difficulties with Mr Lynn broke in the national newspapers, Mr Fingleton attempted to deny that he had given approval for Mr Lynn's loan and suggested to Ms [ Olivia] Green [a supervisor in the society] that someone was going to take responsibility for this and that it was not going to be him."

For its part, the society disputed Mr Fitzgibbon's claims that the inquiry concerns loans only to solicitors Lynn and Byrne and said there were eight other anonymous people to whom loans were given and these are are also the subject of the investigation.

In an affidavit, the society's human resources manager, Darragh Horan, said Fitzgibbon had been suspended because he had aborted a meeting which had been called to discuss various matters concerning his conduct.

Horan said he was holding an inquiry into serious matters concerning Fitzgibbon's conduct relating to non-adherence to policies concerning commercial and residential loans, branch managers' bonus payments, Fitzgibbon's own personal home loan with the building society and the approval of a mortgage to an unnamed party who is not a solicitor.

Fitzgibbon claimed that many loans were granted by Irish Nationwide that did not receive approval from the building society's credit committee.

He claimed the committee existed "simply to satisfy the requirements of the financial regulator".

"While protocols existed, they were never adhered to and the entire ethos of the society when it came to lending was entirely informal and controlled by Michael Fingleton," he said.

He said he was also aware of "a significant number of high value loans which were personally approved of by Mr Fingleton without any recourse to or compliance with the normal procedures".

Fitzgibbon was initially on good terms with his boss.

Fingleton made him branch development manager in 2002. He worked two days at head office in Dublin and three days travelling around the society's 52 branches. The job suited him as he could travel around the branch network from his home in Thurles, Co Tipperary. It paid a salary of €76,320.

Relations between the two men began to sour in 2006 when, Fitzgibbon said, he believed Fingleton thought he was responsible for setting up a meeting between a branch manager and a member of the society who had initiated a vote of no confidence at the society's annual general meeting. Fitzgibbon said in his affidavit before the court he had no involvement in organising this meeting.

The relationship became more fractious around June 2006 when Fingleton asked Fitzgibbon to reveal details about branch managers.

Fitzgibbon had set up a bonus scheme for managers to create "a far more motivated" branch network that would generate increased profits.

Fitzgibbon refused to reveal the details. Fingleton later appointed him home loans manager.

The job involved a daily commute from Fitzgibbon's home in Thurles to Dublin.

Fitzgibbon said he believed Fingleton appointed him to this position because he did not expect him "to keep up this heavy commute" and that he would soon simply quit his job. But Fitzgibbon didn't quit.

In August 2007, he was called to a meeting with three managers to discuss commercial mortgage issues. He was "extremely offended" when an issue relating to his own personal mortgage was raised.

Last month, Fitzgibbon was asked to attend a meeting under the disciplinary procedures to discuss issues arising from his conduct and performance. At the meeting, on October 23rd, Fitzgibbon explained to Horan, the society's human resources manager, that any steps taken by him in his job were "in accordance with the prevailing practice" of the society and that it was "common knowledge" within the society that "procedures were not always adhered to in relation to loan approval".

Fitzgibbon said that, by making an issue of his personal mortgage, he felt he was being victimised.

He also pointed out that bonus payments to branch managers had been signed off by Fingleton.

On November 5th last, Fitzgibbon was asked to attend another meeting, again under the society's disciplinary procedure, to discuss his "conduct and performance in the following areas".

The society then listed accounts for solicitors Michael Lynn and Thomas Byrne, and a third man. Fitzgibbon said he had no direct or personal dealings with either solicitor.

Fitzgibbon attended a meeting scheduled by the society on November 13th but said he would not proceed with the meeting. Two days letter he received a letter from the society saying he was being suspended.

The building society disputed Fitzgibbon's scapegoat claims in court this week.

It said it was merely conducting a fact-finding inquiry into his conduct.

Horan rejected Fitzgibbon's assertions of unfair treatment and said there was no evidence of an attempt to scapegoat him. It was his intention to conduct an "open and fair investigation", Horan said.

He said that in order to ascertain all the facts, he had to have meetings with Fitzgibbon who was refusing to co-operate and was therefore suspended on pay "by way of a holding operation pending inquiries".

Mr Justice Frank Clarke lifted Fitzgibbon's suspension on Wednesday, saying he had made a strong case that the society's inquiry was motivated by an attempt to "deflect attention away from senior management" in relation to the Lynn-Byrne loans. He said there was "a lack of clarity" by the society in its disciplinary procedures and that any future inquiry involving any person close to or answerable to Fingleton would be tainted.

The judge also found that Fitzgibbon had made a strong, arguable case that Fingleton had allowed deviations from the society's written lending policy.

Ercus Stewart SC, for Irish Nationwide, told the court on Wednesday that it might be possible to resolve the dispute internally. This would suggest a full hearing might not proceed.

But that might yet not be the end of the matter for Irish Nationwide.

The Irish Financial Services Regulatory Authority never comments on specific investigations but the regulator, as a matter of course, holds a watching brief on any court cases involving financial institutions.