Published Friday, 27 January 2012
It was also alleged that the Department of Enterprise, Trade and Investment (DETI) may also have been pressured by elected representatives into seeking to have them declared unfit to run a company.
The claims were outlined as six directors defending attempts to have them disqualified over their alleged role in the PMS were granted access to documents in the case.
A High Court Master directed the Department to provide discovery within 28 days and to pay the directors' costs in bringing the application.
Nearly 10,000 Presbyterians lost access to their savings when the PMS was forced into administration in November 2008 after a run on its funds.
A rescue package underwritten by the Westminster government and the Northern Ireland Executive was agreed last year.
But DETI has made a series of allegations of unfitness against some of the directors.
These include that they caused or allowed the PMS to carry on the business of banking contrary to relevant legislation and to accept deposits in breach of the Banking Act 1987.
It is also claimed that they failed to adequately monitor or control the affairs of the Society, and allowed it to make loans of more than £56million to non-members in breach of its rules.
The six respondents in the case are Philip Black, David James Clements, David McConaghy, Albert McCormick, Samuel McFarland and David Henry Colin Ferguson.
Ruling on the discovery application, Master Kelly pointed out that the PMS had 20 directors at the time it went into administration.
DETI has decided it was in the public interest only to seek disqualification orders against six of them.
One is a practising accountant, while another has retired from the same profession. Three more are in their seventies with significant health problems, the court heard. Two of these are retired clergymen. The sixth respondent is the Chief Executive of the PMS who allegedly acted as a de facto director.
They all deny unfit conduct and have filed counter claims as part of their defence. These include
- the alleged grounds for unfitness could apply to all of the directors
- by seeking disqualification orders against some, but not all, DETI has discriminated and acted with apparent bias and unfairness
- the respondents have been selected as "soft targets"
- a conflict of interests exists in bringing the disqualification proceedings because the Department failed in its own regulatory responsibility to the company and was criticised for doing so by the House of Commons Treasury Committee
- DETI may have been subject to pressure from elected representatives to bring proceedings.
Master Kelly granted discovery to documents including an administrator's report and material relating to the decision not to initiate proceedings against the remaining directors.
She said: "I consider that they are relevant to the issue of unfair discrimination and necessary for the respondents' defence of the proceedings and therefore the disposal of the action."