A shareholder in Irish Life & Permanent has obtained permission from the High Court to be included as part of a legal challenge against the Government's plans to recapitalise the bank.
Last week shareholders Gerald Nigel Bunting and Horizon Growth Fund NV served motions aimed at overturning or varying the orders obtained by the Minister on July 26, allowing the State to inject €2.7 billion into IL&P and giving the State a 99% stake in the bank. This will wipe out shareholders' investment.
The shareholders' actions are against the Minister arising out of the decision to go ahead with the recapitalisation of IL&P after shareholders had earlier rejected that proposal.
Today at the High Court, Mr Justice Sean Ryan granted permission to Malta-based Scotchstone Capital Fund Ltd, which is also a shareholder in IL&P. The application to be included in the challenge was made by Piotr Skoczylas, managing director of Scotchstone.
The judge, in granting the application, told Mr Skoczylas the Minister may object to the company's being involved in the challenge.
Under the Credit Institutions (Stabilisation) Act 2010 - the banking legislation which the Minister is using for the recapitalisation of financial institutions - parties such as shareholders of the bank are required to serve notice of any legal challenge within five working days of the making of the recapitalisation order.
In their action, Mr Bunting and Horizon allege that the Minister's actions were unreasonable and unlawful. In separate challenges both claim their shareholdings in IL&P have been overwhelmingly diluted and their rights 'have been abrogated without any consultation'.
Both claim the Minister's decision to obtain the recapitalisation order was in clear disregard of the majority of the company's members. They allege that the Minister's actions have been unreasonable and carried out without any adequate consultation, discussion or adequate investigation of alternative measures.
It was further claimed the stress tests upon which the capitalisation requirements were based were unduly pessimistic and that the dilution of the shareholders holdings in favour of the State was disproportionate.
Mr Bunting and Horizon also allege the Minister's action was unlawful on grounds including that the Minister acted without adequate consultation, proper observation of fair procedures and without the appointment of an independent valuer to assess the value of the shareholders' interest.
Horizon Growth Fund BV, which has a registered address at Berg Arrarat on the Caribbean Island of Curacao, said the company holds more than 6,000,000 shares in IL&P, which it acquired between February and July 2011.
Mr Bunting of Shelly, Suffolk, Ipswich, England stated that he and his family hold a total of 3,030,000 shares in IL&P which are held in a number of different accounts.
Mr Bunting and Horizon's actions have been adjourned to a date in September, for mention only. It is hoped the full hearing of their challenges will be heard sometime in October when the new legal term commences.
