Irish Nationwide may sue Reuters

IRISH NATIONWIDE Building Society is considering taking legal action against the Reuters news agency after it published an inaccurate report that the institution was holding "talks with its lenders to avoid insolvency".

Reuters retracted the story late on Friday night, admitting that "material elements" of the story were incorrect and that it "contained false information".

A spokesman for Irish Nationwide confirmed to The Irish Timesyesterday that "the society is discussing the matter with legal advisers".

The society's chief executive, Michael Fingleton, told the Sunday Independentthat the story was "irresponsible, false and untrue", adding that "in the present highly sensitive economic, financial and commercial climate, the putting out of such statements is tantamount to commercial sabotage".

Reuters did not check the story "in the way that you would expect", Mr Fingleton said, adding: "We believe that we have the evidence to support our case."

The story was originally published on the Reuters news wire without any comment from Irish Nationwide. It was updated more than two hours later to include the society's unambiguous denial, but continued to quote an anonymous source that the society was in a "very bad position". The story was eventually completely retracted.

A spokeswoman for Thomson Reuters, the company that owns the Reuters news wire service, said the source had been misinterpreted by the reporter.

The original story was filed out of Reuters's London office, according to the spokeswoman, who admitted that Reuters's normal operating procedure for verifying stories had not been followed in this instance. She said the company had not yet received any contact from Irish Nationwide's solicitors about a possible legal action.

Credit rating agency Moody's last week downgraded the society's debt, citing an increasing exposure to commercial property and development, which accounts for 80 per cent of its loan book.

Moody's cited the "rapid deterioration" of land and property values in Ireland and Britain and said the decline was exacerbating the already high loan-to-value ratios on the society's commercial property and development loan book.