Former Anglo executive ‘horrified’ as bank seeks repayment of €6m retirement package

The retired chief executive of the former Anglo Irish Bank operation in the UK is being pursued for repayment of most of his 2005 retirement package worth around €6 million.

John Rowan says he is "horrified" that, more than seven years after his retirement, repayment is being sought.

Anglo's successor, Irish Bank Resolution Corporation (IBRC), now in special liquidation, claims Mr Rowan must repay the money because the payment was not approved at a general meeting as required by law.

The package was agreed in 2005 between Mr Rowan and then Anglo chief executive Sean FitzPatrick, it is claimed.

Mr Justice Peter Kelly yesterday granted Mr Rowan’s application to have the case against him transferred to the Commercial Court saying he was satisfied the matter came within the rules allowing such matters be dealt with by the court.

Counsel for IBRC had argued it was a contract of employment matter and should go through the normal High Court process rather than the Commercial Court.

The judge rejected those arguments and adjourned the matter to July 29th for further directions.

IBRC claims the purported “resignation agreement” with Mr Rowan of December 2005 is void on grounds the relevant provisions of the Companies Act required the payments must be first approved by a general meeting of the bank.

It claims Mr Rowan must repay about €2.1 million received for loss of office, annual bonus for 2005 and outstanding deferred bonuses.

It is also seeking repayment of another €2.89 million for an employer pension contribution made to augment preserved benefits of about €1.5 million payable to him at age 50.

In an affidavit, Mr Rowan, Tinarana, Rahena Beg, Killaloe, Co Clare, said he began working with Anglo in Dublin in 1986 and in 1989 moved to London to work as managing director of its UK subsidiary, then known as Industrial Funding Trust Ltd.

As the bank grew he was appointed chief executive of the bank’s entire UK operations and by 2004 had a salary and benefits worth more than €1.5 million annually.

About 2004, after Seán FitzPatrick announced his intention to step down as chief executive (and become chairman of the bank), Mr Rowan applied for Mr FitzPatrick’s job but it went to David Drumm.

Mr Rowan said he realised he would “not be part of Mr Drumm’s future plans for the bank” and, having discussed the matter with Mr FitzPatrick, a retirement package was agreed which, inclusive of pension benefits, amounted to about €6 million.

It was not until October 2011 there was any suggestion from IBRC this package was anything other than lawful, he said. The bank’s case appeared to be based on its interpretation of Section 186 of the Companies Act which, Mr Rowan argued, is exclusively concerned with he regulation of companies and associated commercial matters.