Irish Nationwide Building Society gave hundreds of thousands of euro in multiple loans to a former manager, despite queries being raised about his ability to repay them as far back as 1997, the Employment Appeals Tribunal was told today.
Brian Beggan has claimed that he was unfairly dismissed after selling a property and not repaying the mortgage on it.
He told the tribunal that when he discovered that the proceeds had run out due to cost overruns on other building projects, he had immediately notified Chief Executive Michael Fingleton.
He had been prepared to take out a mortgage on his family home in a bid to repay the money. However, he said Mr Fingleton had told him to sell another property, which would allow him to clear the two mortgages, and that in the meantime he should continue to pay the mortgage.
The tribunal was told that Mr Beggan had made 13 loan applications from 1997.
But an internal audit commenced in July 2007 revealed that there were concerns about his ability to repay loans as far back as 1997.
Despite that he was given a number of further loans.
By 2000, almost all of Mr Beggan's salary was going in loan repayments - yet further loans were sanctioned.
In 2003, he applied for a loan of €360,000, but was given €382,000 - €22,000 more than he had requested.
The audit investigation found that it was inconceivable that a loan could be sought, approved and the cheque given out on the same day and raised questions about whether transactions had been backdated.
Mr Beggan said that it was not normal practice for such an investigation to take place.
He said he believed that the investigation was linked to the fact that his partner Olivia Green had given evidence in a High Court action regarding the lending practices at the society.
The Tribunal has said it will subpoena Mr Fingleton to give evidence.
The case is due to resume on 15 September.
