Michael Fingleton, former CEO of Irish Nationwide Building Society (INBS), is facing a civil trial over allegations of negligent mismanagement. The court heard that Fingleton approved substantial loans without prior board approval, engaging in what was described as “cart-before-the-horse” lending practices. These actions allegedly led to significant financial losses for INBS, which required a state bailout during the 2008 financial crisis.

Specific Instances of Unapproved Lending

One notable case involved a €2.1 million loan for a casino development in the south of France. The court was told that Fingleton authorized this loan without the board’s knowledge, and the project ultimately failed, resulting in a loss of €5.9 million.

In another instance, Fingleton allegedly approved a £34.5 million loan to a UK company for the purchase of petrol stations, again without board approval or proper credit analysis.

Court Proceedings and Defense

Fingleton, now 87 and in ill health following a stroke, denies the allegations of negligent mismanagement. His legal team argues that the lending practices were in line with the norms of the time and that the board was informed of significant decisions.

Implications for Financial Governance

The case highlights concerns about governance and oversight within financial institutions. The alleged unilateral decision-making by Fingleton underscores the importance of robust checks and balances to prevent similar occurrences in the future.

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