Regulator's intervention spurs Irish Nationwide election

Irish Nationwide building society chairman Dr Michael Walsh is to put himself up for re-election at the society's agm following intervention by the Irish Financial Services Regulatory Authority.

Activist shareholder Brendan Burgess is to challenge Dr Walsh at the May 22nd meeting.

In a statement yesterday, Irish Nationwide said the society and the financial regulator "have agreed that there should be an election for the board. An election is not required under the Building Societies Act or the society's rules and the society believes it to be in the interests of democracy".

Dr Walsh is to resign and put himself forward for re-election to enable an election take place.

Mr Burgess said he had complained to the financial regulator about the fact that an election was not due to be held.

The vice chairman of the society, Con Power, who is chairman of the Financial Services Ombudsman Council, resigned in February to avoid conflict between the two roles.

Mr Power was to have stood down at the agm and put himself forward for re-election, as he had spent three years in the position. Following his resignation, David Brophy was brought onto the board. As no director had been in place more than three years since his last election, no election was to have taken place at this year's agm.

Mr Burgess will now put himself up for election, though he does not believe he will beat Dr Walsh. He has gone up for election on a number of occasions. "I use it to highlight lending policies and why there needs to be reform," he said.

Mr Burgess said he has submitted a statement as part of the election, which should be sent to shareholders. He was told the society had difficulties with his statement and appealed the matter to the regulator. Mr Burgess said he now understands that the statement is to be sent out unchanged.

The High Court is due to hear a case next month where the society is contesting a decision of the Ombudsman in relation to a penalty charge imposed by the society on a customer who paid off his mortgage early.

The society is seeking a judicial review of the decision with a view to having it quashed. The application to the courts by the society occured around the time Mr Power resigned his position on the board of the society. Mr Burgess said he expected the case would be heard in the week prior to the rescheduled agm.

The building society, built up by managing director Michael Fingleton, has in recent years concentrated on lending money to property developers.

Mr Fingleton is personally involved in agreeing large loans issued to a small number of significant lenders.