Finance Minister Michael Noonan has said the Government has to proceed with the re-capitalisation of Irish Life and Permanent, despite today's vote by shareholders against a motion allowing this.
Mr Noonan said he could understand how shareholders felt because the motion would have meant their stake would be wiped out. Mr Noonan said there was a legal route the Government could follow, but the re-capitalisation would proceed.
Earlier, Irish Life and Permanent shareholders voted against a motion allowing the Government to put State money into the company.
Chairman Alan Cook told today's EGM that the proxy votes counted so far meant motions had been rejected by shareholders. Mr Cook said there was no incentive for shareholders to vote in favour of the motions. Shareholders applauded the outcome of the vote.
One shareholder said they had depended on the shares to support them in their old age. Another asked: 'how did we get into this mess?'
At the meeting, a representative of the investment fund Scotchstone was elected to the IL&P board. However, this appointment will be subject to the approval of the financial regulator.
The company was seeking backing for a motion to allow the Government put money into the bank which would give the State a 99% ownership stake.
Earlier, the European Commission had granted temporary approval, under EU state aid rules, to a recapitalisation worth up to €3.8 billion for IL&P.
The Commission said it will take a final decision on the state measures in favour of IL&P on the basis of the new restructuring plan that Ireland committed to submit by the end of this month to take account of this additional state support.
Irish Life and Permanent is made up of two parts - a bank called Permanent TSB and a life assurance company called Irish Life.
The company's problem has been its bank, which was the largest provider mortgages during the boom. It is that exposure to the property market which resulted in the Central Bank requiring the company to raise €4 billion to cushion it against bad loans.
Separately, the EU's internal market commissioner has said banks in the European Union could face fines of up to 10% of turnover if they fail to comply with tougher capital and liquidity rules.
Michel Barnier unveiled draft laws in Brussels to implement the new global Basel III accord which will force banks to hold more and better quality capital from 2013 in a bid to keep taxpayers off the hook in a future financial crisis.
The draft measures largely mirror Basel III, which was approved by G20 leaders of the top 20 economies last November such as a minimum core equity capital ratio equivalent to 7% of a bank's riskier assets.
