Permanent TSB allowed to join in key court action

Permanent TSB has secured Supreme Court orders allowing it fully participate in a legal action against the Minister for Finance next month in which some shareholders are seeking to overturn the Minister's order recapitalising the institution, formerly Irish Life & Permanent, by some €2.7 billion.

The three-judge Supreme Court yesterday unanimously set aside a High Court order allowing limited participation in the case to Permanent TSB Group Holdings plc and Permanent TSB plc and ruled they could fully participate as notice parties.

Vital interest
The two entities had sought to fully participate, arguing they have a vital interest in ensuring the direction order is not overturned. Their application was supported by the Minister.

The High Court last February ruled there was no need for PTSB to be joined unless the court got to a point in the main action where it was considering substituting the direction order for a new order. Only then would the court hear submissions from PTSB about the effect any reversal of the order would have on it and what alternative order might be suitable, said Mr Justice Peter Charleton.

The PTSB entities appealed to the Supreme Court which upheld their appeal, meaning both entities can fully participate in the case due for hearing on January 21st.

In that action, Piotr Skoczylas, his company Scotchstone Capital Fund Ltd, Gerard Dowling and Pádraig McManus have challenged the 2011 direction of the Minister to inject €2.7 billion into the former Irish Life & Permanent, now Permanent TSB. Another €1.3 billion was injected in March 2012.

The shareholders claim the direction order was not appropriate or reasonable in relation to their position as shareholders and the money could have been sourced elsewhere. As a consequence of the Minister’s action, their shareholding value was written down from about 33 cent per share to one cent, they claim.

Mr Justice Nial Fennelly said it was clear the two PTSB entities were at least potentially affected by the shareholders’ bid to set aside the Minister’s order. He also could not see how the shareholders would be prejudiced as a result of the two firms being allowed to participate fully. Another factor was the Minister and the PTSB entities had different interests in this matter.