KPMG Kieran Wallace
Former Irish Nationwide
Building Society director Terry Cooney has written to the finance, public
expenditure and reform committee to express “surprise” at the response of KPMG,
the special liquidator of the society, to questions by its members. They concerned
how the decision was taken not to sue its former auditors, also KPMG.
The special liquidators of
Irish Nationwide, which was merged into IBRC, are KPMG accountants Kieran
Wallace and Eamon Richardson. The collapse of Irish Nationwide cost the
taxpayer €5.4 billion in part because of systemically poor lending practices.
Mr Wallace and Mr Richardson
were questioned at the committee last month by Pearse Doherty of Sinn Féin on
whether they had a conflict of interest working for KPMG as both liquidator and
former auditor, and on what grounds the decision was taken not to sue the accountants
as auditors.
McCann FitzGerald’s advice
KPMG told Mr Doherty the
previous board of the society had taken this decision based on the advice of
law firm McCann FitzGerald. It said it planned to “shortly be announcing a
different arena for managing the litigation [relating to INBS] . . . [And] that
independent group can make a decision on whether it feels it necessary to
include KPMG.”
Mr Cooney’s letter, written
by his solicitors Noel Smyth and Partners, stated it wished to draw the
“attention” of the committee and Mr Doherty to the previous board of Irish
Nationwide’s extensive relationship with McCann FitzGerald from 2001 onwards.
The letter suggests to the committee KPMG as special liquidator did not
adequately explain to its members how McCann FitzGerald had previously advised
the society under its then chief executive Michael Fingleton on many matters,
just as KPMG did.
“Our client was somewhat
surprised with the response of the liquidator, Mr Wallace, to the question
raised by Mr Doherty,” Mr Cooney’s letter dated March 14th said. “We are
instructed that McCann FitzGerald have been advising the board of INBS since
2001 and have not just been advising the new board since 2009 . . .
Previous roles
“We are further instructed
by our client that McCann FitzGerald, solicitors, were heavily involved in
various aspects of the INBS’s due diligence and the demutualisation process
from 2001 right up to 2009, and of course are now the same solicitors advising
the liquidators, Mr Wallace and Mr Richardson.” KPMG also acted for the society
in preparing it for demutualisation and sale.
Mr Cooney asked Martin
Groves, clerk of the committee, to “bring this matter to the attention of the
committee.”
A spokesperson for McCann
FitzGerald declined to comment on how it dealt with potential
conflict-of-interest issues in relation to Irish Nationwide.
“The firm do not comment on
client matters, and there is nothing further to add on this,” it said. A
spokesman for KPMG, also declined to comment.
