Angry members refuse to accept audited accounts of Irish Nationwide

By Joe Brennan

Irish Independent Thursday May 13 2010

Angry members of Irish Nationwide voted not to accept the beleaguered society’s audited accounts at its annual general meeting. However, they still voted by an 83pc majority to reappoint its external auditors, KPMG, who have been in place for 36 years.

Chairman Danny Kitchen highlighted that the show-of-hands vote against adopting the accounts was not binding. But long-time activist shareholder Brendan Burgess said: “It would have to be accepted that it is a general lack of support for the board and also for the auditors.”

Irish Nationwide’s board has been completely overhauled within the past year-and-a-half and is headed by a new seven-man board, including two public-interest directors.

Mr Kitchen conceded that a situation where the same external auditors had been in place since 1974 was “a corporate governance issue” and that he intended to put the contract out to tender “in due course”. However, he said that it was not a priority for the board at the moment.

KPMG received a €300,000 fee for auditing Irish Nationwide’s books for last year. Jonathan Lew, a partner with KPMG, told the annual general meeting the practice had completed a number of reviews for the board and regulator over the years, focusing on issues such as control and commercial lending.

Irish Nationwide’s new chief executive, Gerry McGinn, said last month that a number of external reports by accountants and auditors — dating back several years — were forwarded to the then board and financial watchdog, which detailed “inadequate” credit checks on borrowers and sloppy lending practices.

Meanwhile, Mr Kitchen told members yesterday that the society was currently negotiating exit terms with John ‘Stan’ Purcell, who recently stepped down as finance director.

When asked what Mr Purcell would receive from the society, the chairman said he would get his contractual entitlements. “That is our employment law. If you have a problem with it, talk to your TD,” he told members at the RDS in Dublin.

Mr Kitchen also reiterated that former chief executive Michael Fingleton had still not returned his €1m bonus.

- Joe Brennan

Irish Independent