IRISH BANK Resolution Corporation, formerly Anglo Irish Bank, has issued legal proceedings against the former head of the bank’s UK operations, John Rowan, in an attempt to recoup a “golden parachute” payment of €1.1 million made on his retirement in 2005.
Mr Rowan, who worked at Anglo for 20 years until he retired in December 2005, received the payment “in recognition of his substantial contribution to the group”. He was appointed to the board of the bank in 1998.
The bank issued proceedings against Mr Rowan on November 3rd. It is being represented in the case by law firm Arthur Cox.
IBRC is expected to claim that the bank should not have made the payment as it was not properly approved by Anglo’s shareholders.
Mr Rowan declined to comment when contacted. The bank also had no comment to make.
Asked about the payment in 2009 by RTÉ’s Prime Time, Mr Rowan said in an interview that the payment was appropriate, disclosed in published accounts and that he had “no qualms” about it.
“It was certainly in keeping with what was happening in the industry. You measure yourself by what was going on in the industry at the time. I had worked in the bank for 20 years and had been in a senior position and I don’t have any problems with that,” he said.
Similar payments were paid to other departing executive board members in “recognition” of their long-term careers at the bank.
Details of the payments were published in the bank’s annual reports every year. The payments were part of a strategy encouraged by chairman Seán FitzPatrick to reward long-term senior executives who left the bank.
IBRC is also pursuing a legal action against Anglo’s former chief operating officer, Tiarnan O’Mahoney, to recover a payment of €3.9 million he received on his retirement in December 2004.
Proceedings were issued against Mr O’Mahoney in October 2010 in an action he is defending. He is claiming that the departure payment from the bank was properly approved.
Mr O’Mahoney joined the bank in 1985 and was appointed to the board in 1993.
He and Mr Rowan left Anglo after losing out in the race to succeed Sean FitzPatrick as chief executive, a role taken up by David Drumm in 2005.
Tom Browne, the former head of Anglo’s Irish operations who was also an unsuccessful candidate to succeed Mr FitzPatrick, received a payment of €3.75 million on his retirement in November 2007 “in recognition of his contribution to the group”.
Mr Browne is defending a High Court challenge taken by IBRC over unpaid loans of €50 million for property investments and the purchase of shares in Anglo.
He was in charge of the Irish division from 2005 until 2007 when its loan book almost tripled from €13 billion to €38 billion.
ANGLO ACTIONS AGAINST DIRECTORS
Legal actions taken by Anglo Irish Bank/Irish Bank Resolution Corporation against former executive directors
Over unpaid loans. . .
Seán FitzPatrick, former chairman – issued in March 2010; filed for bankruptcy in Ireland in July 2010.
David Drumm, former chief executive – issued in November 2009; filed for bankruptcy in the US in October 2010.
Tom Browne, former head of Irish operations – issued in October 2010; ongoing.
Over departure payments. . .
Tiarnan O'Mahoney, former chief operating officer – issued in October 2010; ongoing
John Rowan, former head of UK operations – issued in November 2011; ongoing
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