By: Michael O’Farrell
Investigations Editor
THE Central Bank has forced the entire board of Athlone Credit Union to step down amid concerns of ‘longstanding governance dysfunction’, the MoS can reveal.
The move comes weeks after the Registrar of Credit Unions – Patrick Casey – warned the Central Bank would use its enforcement powers to ensure credit union boards across the country fix concerns identified by inspections. It also follows an anonymous staff whistleblower raising their concerns. Athlone Credit Union is one of the country’s largest credit unions with more than 17,000 members and €86m in assets.
The MoS understands there are no concerns over the strength of the credit union’s finances – and that the issue is one of governance only.
When such concerns are brought to the Central Bank, the Registrar of Credit Unions issues a fix list – formally known as Risk Mitigation Programme (RMP) – which the board must act to remedy.
Athlone Credit Union received RMPs in 2013 and 2015 but failed to sufficiently address the concerns identified. Last year the Central Bank issued a fresh RMP which demanded that all board members, who had served for more than a year, step down and not offer themselves for reelection. This meant every board member still present would have to go.
The regulator demanded this action be completed before the 2017 AGM on March 8. As a result, the 2017 AGM saw none of the outgoing board members nominated for reelection and a new board was put in place.
It appears the enforced disbandment of the previous board was considered necessary because the Central Bank was concerned at the board’s failure to sufficiently rectify what the regulator called ‘longstanding governance dysfunction’. The MoS understands the regulator has also appointed an independent consultancy firm to conduct a review of governance and internal control mechanisms at the lender.
Outgoing board members – all of whom were voluntary – included chairman Alan MacNeice, an executive with Jazz Pharmaceuticals.
Mr MacNeice, who became chairman in 2015, had successfully defended a motion of no confidence in the board which was tabled at a Special General Meeting last July. At the meeting, members also raised concerns. In his foreword to the 2017 annual report – presented to the AGM as he stepped down this month – Mr MacNeice spoke of ‘some significant investigations and related HR processes’ that had incurred one-off costs in 2017.
This included external consultants’ reports which cost in excess of €200,000. But he stopped short of explaining he and his board were being forcibly removed. Mr MacNeice’s foreword also addressed the role played by a whistleblower, saying: ‘While it is regrettable that we required the action of an anonymous whistleblower to bring some issues to the board’s attention, we are grateful for that person’s actions.’ A Central Bank spokesperson told the MoS the regulator was ‘prevented by confidentiality provisions in legislation from discussing individual regulated firms.’ Mr MacNeice said ‘I have no comment to make.’
