Permanent TSB Group Holdings plc and Permanent TSB plc are distinct and separate companies, which has legal implications
Permanent TSB Group Holdings plc (“PTSB GH”) and Permanent TSB plc (“PTSB”) are separate entities, with separate capital, separate Boards and limited liability. In particular, PTSB GH had a considerable separate paid-in capital that did not contribute to the PTSB recapitalisation and that was attributable in full to the original shareholders prior to the ex parte direction order effected by the Irish Minister for Finance (the "Minister") on 26 July 2011 (the "July 2011 Ex Parte Direction Order"). Following that Direction Order, 99.2%, i.e. approx. €432 million, of that separate PTSB GH capital became attributable to the Minister (in the absence of any meaningful separate liabilities). That capital was not taken out of PTSB GH, but now benefits the Minister instead of the original shareholders; the High Court judgment of 15 August 2014 confirms this by stating that "The paid in share capital of the company was not counted as part of the recapitalisation and has not been taken out of the company by the Minister." (paragraph 41.2.20 of the said judgment). The matter is delineated in more detail below.
PTSB GH’s only function is being the holding company for PTSB.
PTSB GH is not a credit institution and it is, therefore, not subject to certain legislation aimed exclusively at credit institutions, such as the EU Directive 2001/24/EC on the reorganisation and winding-up of credit institutions (the "CIWUD"). PTSB is a credit institution.
PTSB GH is a listed company and has about 135,000 shareholders worldwide. PTSB is not a publicly listed company.
Both PTSB GH and PTSB have always been viable entities, which have always been solvent going concerns under the International Financial Reporting Standards (the "IFRS") adopted by the EU in the form of regulations as per the EU IAS Regulation (EC) 1606/2002.
The Irish Minister for Finance, PTSB GH and PTSB have all formally admitted before the Irish High Court that: “General meetings of shareholders and the Board of Directors, which are the key organs of PTSB GH, have never been suspended"; "The Company has never been subject of special management under part 3 of the 2010 Act or of a compulsory administration";” PTSB GH has never been subject of execution measures, such as liquidation, intended to put an end to the Company's existence"
There has never been any legal requirement to raise capital in PTSB GH
There isn't any - and there has never been any - legal requirement to raise capital in PTSB GH. There were legal requirements to raise capital only in PTSB. Any recapitalisation of PTSB, which was effected by funnelling capital through PTSB GH, was a choice, which had to be effected in a manner compatible with EU law.
The Minister rejected the proposal for the recapitalisation of PTSB put forward by PTSB GH
PTSB GH did not consent to the July 2011 Ex Parte Direction Order. The CEO and the Chairman of PTSB GH delivered on 10 June 2011 a presentation to the Minister and other officials at the Department of Finance. On 20 and 25 July 2011, the PTSB GH Chairman confirmed by letters to the Minister that said presentation constituted ILPGH's formal submissions under s. 7(4)(b) of the Credit Institutions (Stabilisation) Act 2010. In that presentation, PTSB GH formally recommended to the Minister the following specifics in respect of the capital injection into PTSB GH planned by the Minister in order to recapitalise PTSB:
- A placing price in the range of 30 - 75 cents per share; the 75 cents being a “fair market value” and an “unaffected share price”, and the 30 cents being an implied share price based on the multiple of half of the tangible book value;
- A pre-emption offer for existing shareholders allowing to meet the recapitalisation deadline of 31 July 2011; shares could be offered to existing shareholders post the 31 July deadline, as per the precedents of Lloyds and RBS (October 2008) issuance (as formally confirmed in the said presentation by PTSB GH);
- €1.4bn capital to be injected by way of B shares, allowing a targeted buyback in the future, if in the future the losses projected by the 2011 Prudential Capital Assessment Review ("PCAR") did not materialise, in order to help address shareholder concerns.
The above proposal made it clear that the terms of the recapitalisation of PTSB forced ultimately by the Minister by means of the July 2011 Ex Parte Direction Order were plainly not necessary. Nevertheless, the Minister chose not to follow the above recommendations made by PTSB GH. Instead, the Minister was focused on appropriating more than 99% of the PTSB GH voting share capital, on the basis of issuing shares below their nominal value of 32 cents, without offering pre-emption rights to the existing shareholders. The Minister caused a respective proposal to be put to shareholders at an Extraordinary General Meeting of PTSB GH (the “EGM”).
EGM on 20 July 2011 rejected a capital injection through PTSB GH and a takeover of PTSB GH by the Irish Minister for Finance
On 20 July 2011, the EGM rejected the proposed terms of the PTSB recapitalisation by means of the capital injection through PTSB GH, as well as the terms of the respective takeover of PTSB GH by the Minister on behalf of the Irish State. Details of the EGM resolutions and the results of the EGM are presented here. In particular, the EGM rejected, inter alia, the following measures that were to take a concurrent immediate effect:
- the capital increase in PTSB GH by issuing more than 36 billion new shares to the Minister, which would have resulted in a dilution of the stake of the existing shareholders from 100% to less than 0.8%; and
- concurrently abrogating the shareholders’ pre-emption rights and not offering shares to the existing shareholders on a pre-emptive basis in proportion to the capital represented by their shares; and
- concurrently reducing the nominal value of the PTSB GH ordinary share from 32 cents to 3.1 cents, in order to enable the Minister to subscribe for new shares at 6.345 cents; and
- concurrently changing the PTSB GH memorandum and articles of association to reflect the above changes in the number and nominal value of the shares.
The EGM also decided to cause the Company to appoint a leading global investment bank and a leading corporate law firm in order to: i) complete within 30 days an independent, comprehensive review of viable recapitalisation options including, inter alia, investments by outside investors and various options for investment by the Irish Government, taking into account among others the economic feasibility and legality of the said options in the context of the relevant Irish and EU laws; and ii) undertake a comprehensive global search for investors interested in participating in a meaningful way in the recapitalisation and, on the basis of the said search, prepare within 30 days a short-list of such investors.
The EGM also decided to cause the Company to contact within 3 days the Central Bank of Ireland, the Irish Minister for Finance, the EU authorities, the International Monetary Fund and the European Central Bank (together the “Authorities”) and (a) to inform them of the outcome of the EGM; (b) to formally ask them to review without delay the structure of the process for the recapitalisation in the context of the outcome of the EGM; and (c) to formally ask the Authorities to extend the timeline for completion of the recapitalisation to the end of December 2011 in order to allow for an orderly completion of all the planned recapitalisation phases. It is notable that, in line with the decision of the EGM, the PTSB GH Company Secretary wrote on 22 July 2011 a letter to the aforementioned Authorities informing them about the outcome of the EGM, asking them to review the structure of the process for the recapitalisation in the context of the outcome of the EGM, asking them to extend the timeline for the recapitalisation to the end of 2011, and asking for a response no later than 5 pm on 27 July 2011. However, the Minister chose not to wait for the response of the said Authorities; as outlined below, on 26 July 2011, the Minister rushed to effect the Ex Parte Direction Order that revoked the decisions of the EGM and forced the terms of the takeover by the Minister of 99.2% of the voting share capital in PTSB GH.
The PTSB GH EGM completely changed the legal context because it activated important shareholder protections enshrined in EU law, and in particular in the Second Council Directive 77/91/EEC (the "Second Company Law Directive"). Those protections would have not mattered, if the EGM had approved the State recapitalisation and the takeover of PTSB GH by the Irish Minister for Finance. The EGM decisions activated the shareholder protections under the Second Company Law Directive that requires a general meeting to approve an increase in capital, a waiver of pre-emption rights and a reduction in the nominal value of the share. The terms of the subsequent ex parte Direction Order effected by the Irish Minister for Finance on 26 July 2011 were in essence direct opposites of the decisions of the EGM on 20 July 2011.
It is notable that on 20 July 2011, as mentioned above, following the outcome of the EGM, the Chairman of PTSB GH wrote a letter to the Minister outlining the concerns of the majority shareholders and stating that “the concerns expressed at the meeting echo the very strong concerns raised by both myself and members of the Board at meetings with you and your officials over the last two and a half months, particularly the meetings of the 13th May 2011, and the 10th June 2011”.
July 2011 Ex Parte Direction Order allowed the Minister to appropriate 99.2% of voting share capital in PTSB GH
The Minister did not like the decisions of the EGM of PTSB GH on 20 July 2011 and decided to revoke those decisions by means of a direction order. Thus, he made on 25 July 2011 a so called "proposed direction order", revoking the decisions of the EGM. Then, on 26 July 2011, the Minister effected an ex parte direction order in the High Court (the "July 2011 Ex Parte Direction Order"), which was made in the terms identical to those of the Ministerial "proposed direction order" made the previous day. The July 2011 Ex Parte Direction Order allowed the Minister to funnel through PTSB GH the capital recapitalising PTSB and to appropriate the 99.2% stake in PTSB GH in the process. Specifically, the July 2011 Ex Parte Direction Order effected an increase in capital of PTSB GH by consideration in cash based on the following measures with concurrent immediate effect, which caused the stake in PTSB GH of the original shareholders to be reduced from 100% to less than 0.8%:
- compelling PTSB GH, against the decision of the EGM, to issue more than 36 billion new shares to the Minister, at a share price of 6.345 cents dictated by the Minister, in return for the sum of €2.3 billion (in addition to €0.4 billion of contingent convertible bond); and
- offering the said shares to the Minister without offering shares on a pre-emptive basis to the existing shareholders, despite the fact that the shareholders rejected at the EGM the resolution asking them to waive the pre-emption rights; and
- concurrently reducing, against the decisions of the PTSB GH EGM, the nominal value of the PTSB GH ordinary share from 32 cents to 3.1 cents, in order to enable the Minister to subscribe for new shares at 6.345 cents; and
- concurrently changing, against the decisions of the EGM, the PTSB GH memorandum and articles of association to reflect the above changes in the number and nominal value of the shares; and
- concurrently nullifying nearly all of the decisions of the EGM; and
- dis-applying in respect of PTSB GH various relevant legal rules, whether deriving from statute, common law, equity, codes of practice or contract.
The national legislation, pursuant to which the July 2011 Ex Parte Direction Order was made, is the Credit Institutions (Stabilisation) Act 2010 (the “2010 Act”). The Second Council Directive 77/91/EEC, which is at the core of the Shareholder Applicants’ claims, was transposed into Irish law through the Irish Companies Acts. Section 53 of the 2010 Act allows the Irish Minister for Finance to effect direction orders notwithstanding anything in the Irish Companies Acts, any other enactment or any other rule of law. Hence, if it were not for the supremacy of EU law (which the Minister was legally obliged to abide by), the Minister could abrogate national provisions through which provisions of EU law, including the relevant provisions of the Second Company Law Directive, had been transposed. In particular, section 7(1) of the 2010 Act allowed the Minister to undertake measures that could be in contradiction with Articles 8(1), 25(1) and 29(1) of the Second Council Directive 77/91/EEC. However, the Minister of course was legally obliged to abide by EU law and to respect the sacrosanct supremacy of EU law at all times (which the Minister disregarded). Primacy of EU law is a fundamental principle of the legal system in the European Union. By virtue of the doctrine of supremacy of EU law, provisions of EU law with direct effect take precedence over domestic laws.
As a result of the July 2011 Ex Parte Direction Order, the Minister specifically appropriated 99.2% of the separate paid-in capital of PTSB GH. By way of historical background, the High Court order of 18 January 2010 reduced the PTSB GH share premium by €634m to €364m. Consequently, the PTSB GH paid-in capital was established, consisting of the share capital of €89m and the share premium of €364m. Prior to the July 2011 Ex Parte Direction Order, that capital was attributable exclusively to the then shareholders in PTSB GH. By means of the July 2011 Ex Parte Direction Order, the Minister forcibly caused the 99.2% of that paid-in capital to be attributable to him (instead of the original shareholders). Thus, the share capital attributable to the original PTSB GH shareholders was forcibly reduced by approx. €80m, for the benefit of the Minister. Additionally, the share premium attributable to the original PTSB GH shareholders was forcibly reduced by approx. €353m, for the benefit of the Minister. In total, the separate paid-in capital of PTSB GH attributable to the original PTSB GH shareholders was reduced by approx. €432 million for the benefit of the Minister (in the absence of any meaningful separate liabilities). That separate capital was not taken out of PTSB GH, but 99.2% of that capital is currently beneficially attributable to the Minister. That PTSB GH capital did not contribute to the PTSB recapitalisation in July 2011. €432 million divided by the original number of outstanding shares prior to the July 2011 Ex Parte Direction Order corresponds to more than €1.56 per share, which represents a financial harm to the original shareholders in PTSB GH.
Furthermore, the Minister forcibly issued more than 36 billion shares at 6.345 cents, i.e. significantly below the original nominal value of 32 cents, without offering shares on a pre-emptive basis to the original shareholders. That represented an additional financial harm caused to the original shareholders amounting to more than €0.25 per share. In this regard, it is relevant to note that shares allotted at a discount to a relevant nominal value must be cancelled and duly re-issued at or above the nominal value. Alternatively, the allottee is liable for the amount of the discount together with interest. In this case, if the CJEU determines that the Minister’s actions in question were incompatible with Art. 8(1) of the Second Council Directive 77/91/EEC, then the 36.249 billion PTSB GH shares allotted to the Minister pursuant to the July 2011 Ex Parte Direction Order will have to be cancelled, and shares will have to be re-issued at or above 32 cents (which was the nominal value of the share prior to the July 2011 Ex Parte Direction Order). Otherwise, the Minister (or any subsequent buyer of his shares) will become liable pursuant to section 27 of the Companies Act 1983 for the amount of Euro 9.3 billion plus interest (i.e. 36.249 billion shares, which were issued to the Minister, multiplied by the difference between 32 cents [which was the nominal value before the July 2011 Ex Parte Direction Order] and 6.345 cents [which was the price at which new shares were allotted to the Minister on 27 July 2011]). The matter is delineated in more detail in the Legal Arguments tab.
As outlined in more detail in the Legal Arguments tab and the Court Proceedings tab, the July 2011 Ex Parte Direction Order is subject to court proceedings, which are to determine, inter alia, whether the terms of the Direction Order were incompatible with EU law. The Applicants in the proceedings are shareholders in PTSB GH. One of the Applicants is also a former Director of PTSB GH. The Respondent in the proceedings is the Irish Minister for Finance, who is supported by PTSB GH and PTSB (controlled currently by the Minister).
Requirement by the Minister to make a mandatory bid to buy out the minority shareholders
The PTSB GH EGM on 20 July 2011 rejected a so-called “whitewash procedure” regarding the Minister's legal obligation to make a mandatory offer to existing shareholders to buy them out when he was taking over the 99.2% stake in the Company. The mandatory bid requirement stems from Art 5 of the Takeover Directive 2004/25/EC. The buy out requirement exists in respect of an acquisition of more than a 30% majority of the voting share capital. The “whitewash procedure” is a procedure, according to which shareholders are authorised to waive the mandatory bid requirement.
The above decision of the EGM is very important because it was made in the context of the fact that the Minister had asked the Irish Takeover Panel to waive the aforementioned legal requirement to make a mandatory bid to buy out minority shareholders. However, the Irish Takeover Panel was not in a position to grant an unconditional waiver regarding the obligation of the Minister to make a mandatory offer under Rule 9 of the Takeover Rules of the Irish Takeover Panel Act 1997, Takeover Rules, 2007. On 23 June 2011, the Irish Takeover Panel granted a strictly conditional waiver of Rule 9 for the purposes of the State investment into PTSB GH. Accordingly, the waiver will not be in force if the July 2011 Ex Parte Direction Order is not affirmed. Consequently, the Minister will be legally obliged to make a mandatory bid to buy out the minority shareholders (at or above the original nominal value of 32 cents per share), if the July 2011 Ex Parte Direction Order is set aside or varied.
Nature of the July 2011 Ex Parte Direction Order
It is important and relevant that the July 2011 Ex Parte Direction Order was made ex parte, following the Minister’s application before the High Court, which took about 20 minutes in the afternoon on 26 July 2011. "Ex parte" means without the other party being present; in this case the only party present before the Court was Counsel for the Minister. The ex parte direction order was made by the High Court in the terms identical to the terms of the "proposed direction order" made by the Minister on 25 July 2011. It is instructive to read the transcript from the 20-minute High Court proceedings that resulted, inter alia, in the reduction of the stake of the original PTSB GH shareholders from 100% to less than 0.8% and in the aforementioned appropriation for the benefit of the Minister of €432 million of the separate paid-in capital in PTSB GH.
Judge O’Malley stated the following in respect of the ex parte nature of the July 2011 Direction Order in her judgment of 15 August 2014 (Neutral Citation:  IEHC 418) in the High Court proceedings that challenge the legality of that Direction Order (record number 2011 239 MCA):
“38.34 The respondents [i.e. the Minister for Finance and the supporting him Notice Parties] place reliance on the fact that the direction order must be made by the court. This is, obviously, more acceptable in legal terms than if the Minister could make the order directly. However, it would not be wise to exaggerate the significance of the court's role under the Act [the Credit Institutions (Stabilisation) Act 2010]. Our court system is in general based on the concept of adversarial proceedings, where an independent judge hears competing evidence and arguments on the issues and makes a decision in the light thereof. The effect of an ex parte order is, accordingly, almost invariably short in duration and aimed at preventing an imminent state of affairs, the results of which might not be easily remedied. In terms of the precedential value to be attributed to it, such an order comes in low on the scale.”
In respect of procedural aspects of the July 2011 Ex Parte Direction Order, the Supreme Court stated the following in its judgment delivered on 19 December 2013 by Mr. Justice Fennelly [Neutral Citation:  IESC 58]:
“41 ... The Direction Order, it is true, was technically made by the Court. However, in reality the Court was endorsing the proposed direction order adopted by the Minister and it is the correctness of the Minister’s actions, not those of the Court which are in issue.”
Referring to the above-mentioned Supreme Court judgment, the High Court determined the following in the said judgment of O’Malley J of 15 August 2014 in the proceedings challenging the July 2011 Ex Parte Direction Order:
“38.36. I respectfully agree with the observation of Fennelly J, while acknowledging that he did not intend to be taken as ruling definitively on the issue, that the reality of the case is that it is the decision of the Minister that is in question and not that of the court.”
Furthermore, Mr. Justice Feeney stated the following regarding the July 2011 Ex Parte Direction Order (which was made under the aforementioned 2010 Act, which Judge Feeney refers to as the "Act") in his judgment delivered on 2 March 2012 in the proceedings challenging the July 2011 Ex Parte Direction Order (Neutral Citation:  IEHC 89):
“31. ... The scheme provided for under the Act recognises the urgency of the matters by first providing that direction orders made under s. 9 can be made ex parte and, secondly, by allowing some or all of the directions granted in such an order to have immediate effect. Direction orders can, and do as in this case, have the effect of interfering with the rights, including property rights, of persons affected by the direction order. Section 9 direction orders have far-reaching consequences and encroach upon valuable property and contract rights. The scheme in the Act is such that a party affected by a direction order will be unaware of such order until it is made. Section 11(1) provides the only means by which an affected party can seek to challenge a direction order and such challenge must be made not later than five working days after the making of the direction order. That time limit is both stringent and absolute and there is no provision for any extension of time. It is clear that s. 9 orders can and are intended to affect the interests of others. Those persons are entitled to be dealt with in a manner consistent with the principles of natural justice. Those persons are given, under the scheme of the Act, an entitlement to apply to set aside a direction order. The entitlement for an affected party to apply to set aside a direction order as provided for in s. 11(1) of the Act of 2010 recognises the entitlement of parties affected by an ex parte direction order to be heard by the Court. An entitlement of such a nature and the need for it to be available was identified by Hardiman J. in the Supreme Court in Adam v. Minister for Justice  3 I.R. 53 (at p. 77) where he stated:
"In my view, any order made ex parte must be regarded as an order of a provisional nature only. In certain types of proceedings, either the apparent requirements of justice or the requirements of its administration mean that a person will be affected in one way or another by an order made without notice to him and therefore without his having been heard. This state of affairs may, depending on the facts, constitute a grave injustice to the defendant or respondent." (Emphases added).
It is clear that the July 2011 Ex Parte Direction Order came about after a process that did not meet the requirements of a due adversarial process, natural justice or a fair trial. The requirements of the principles of natural justice, and in particular of audi alteram partem, protecting the Applicants’ right to be heard and plead their case, were of course not satisfied at the ex parte stage on 26 July 2011. Furthermore, the principle nemo iudex in causa sua - that no-one (including the Minister) should be a judge in their own cause - was respected only in form, but not in substance, during the 20-minute ex parte hearing on 26 July 2011, given that the July 2011 Ex Parte Direction Order was made in the terms identical to those of the Proposed Direction Order made by the Minister on 25 July 2011.
Furthermore, the requirements of Article 6(1) ECHR were of course not met at the ex parte stage. Art 6(1) ECHR states, inter alia:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”
There was no adversarial hearing on 26 July 2011 when the July 2011 Ex Parte Direction Order was made. There was merely a 20-minute “rubber stamping” of the Minister’s Proposed Direction Order of 25 July 2011. In this regard, it is relevant to refer to the case law of the European Court of the Human Rights (the “ECtHR”). The Strasbourg case-law has developed the principle of “adversarial proceedings”: a party should have the opportunity to have knowledge of, and then to comment on, any material which is submitted to a court with the intention of influencing its decision. The ECtHR held the following in the case of Ruiz-Mateos v. Spain (Application no. 12952/87), in the judgment of 23 June 1993, in the context of constitutional proceedings to which Article 6 applied under its “civil” head:
“63. The Court will examine the complaint in the light of the whole of paragraph 1 of Article 6 (art. 6-1) because the principle of equality of arms is only one feature of the wider concept of a fair trial, which also includes the fundamental right that proceedings should be adversarial (see, among other authorities, mutatis mutandis, the Brandstetter v. Austria judgment of 28 August 1991, Series A no. 211, p. 27, para. 66).
The right to an adversarial trial means the opportunity for the parties to have knowledge of and comment on the observations filed or evidence adduced by the other party (see, mutatis mutandis, the same judgment, p. 27, para. 67).”
The European Convention on Human Rights must be interpreted as guaranteeing rights which are practical and effective as opposed to theoretical and illusory. In this regard, the ECtHR held the following in the case of Case of Cruz Varas and others v. Sweden (Application No. 15576/89), in the judgment of 20 March 1991:
Page 28: “94. As has been noted on previous occasions the Convention must be interpreted in the light of its special character as a treaty for the protection of individual human beings and its safeguards must be construed in a manner which makes them practical and effective (see, inter alia, the above-mentioned Soering judgment, Series A no. 161, p. 34, § 87).”
Page 30: “99. [...] Convention must be interpreted as guaranteeing rights which are practical and effective as opposed to theoretical and illusory (see the above-mentioned Soering judgment, Series A no. 161, p. 34, § 87, and the authorities cited therein).”
Furthermore, Article 47 of the Charter of Fundamental Rights of the European Union, which applies in the court proceedings in question, states inter alia:
“Right to an effective remedy and to a fair trial
Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article.
Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law.”
Obviously, the 20-minute ex parte hearing on 26 July 2011, during which the July 2011 Ex Parte Direction Order was made, did not afford any remedy or a fair hearing to the PTSB GH shareholders wishing to oppose that Direction Order.
PTSB GH has always been a viable company and PTSB has always been a viable bank, including prior to the recapitalisation in July 2011
PTSB GH has always been a viable company. Since its inception, PTSB GH has always been a going concern, which has been confirmed by the financial statements. The following facts that have been explicitly and formally confirmed by both the Irish Minister for Finance and PTSB GH itself in the court proceedings challenging the legality of the July 2011 Ex Parte Direction Order:
i) "PTSB GH has never been subject of execution measures, such as liquidation, intended to put an end to the Company's existence";
ii) "General meetings of shareholders and the Board of Directors, which are the key organs of PTSB GH, have never been suspended".
PTSB was a viable bank prior to the recapitalisation on 26 July 2011, which was effected by means of the July 2011 Direction Order. This is exemplified by formal statements, which were widely reported in the media, made at the PTSB GH AGM on 18 May 2011 by Alan Cook, who is (and was also then) the Chairman of both PTSB GH and PTSB. Five attendees of that AGM made affidavits on 21 January 2014 swearing the following:
“The following statements, which were quoted widely in the national press, were made by the ILPGH [PTSB GH] Chairman, Alan Cook, at the ILPGH [PTSB GH] AGM on 18 May 2011:
i. ILP [PTSB] has a “strong, viable and sustainable future” and “can provide healthy competition to the two larger pillar banks”;
ii. “The business is not on the brink of insolvency, but there is a requirement for us to guard against a much greater and stringent set of conditions, even though it is unlikely that such conditions will apply in the future.";
iii. The finances of ILP [PTSB] are “not materially different from last September” [when ILP [PTSB] was required to raise only €100m in new capital above and beyond its then current requirements, amounting to a total of €243m], but the Central Bank applied a far tougher set of conditions;
iv. “They have applied a killer punch”;
v. The stress test results seem "profoundly unfair";
vi. The PCAR/PLAR [Prudential Liquidity Review] assumptions by Blackrock were “a set of artificial assumptions”;
vii. “The goalposts have been moved”;
viii. The €4bn capital requirement is “astonishing” and the rise in ILP’s [PTSB’s] capital requirements from €243m to €4bn in less than half a year is "an amazing conundrum".”
The quotes above mention "ILPGH" and "ILP", which denote previous names of PTSB GH and PTSB, respectively. The above statements are confirmed by the financial statements of both PTSB GH and PTSB, as well as by numerous other management statements made prior to the 2011 recapitalisation. This was also confirmed by the EU authorities, given that the July 2011 bank recapitalisations in Ireland were undertaken only in respect of viable banks, which was confirmed by the aforementioned High Court judgment of 15 August 2014. The High Court judgment of 15 August 2014 states in this regard, inter alia, the following in paragraph 41.2.4: "In entering into the Programme of Support in November 2010, the Irish State entered into binding legal commitments to the European Commission, the European Central Bank and the International Monetary Fund, including a commitment to recapitalise viable Irish banks." (emphasis added).
PTSB Shareholders Oppose Breaches of EU Law by the Irish Minister for Finance