Minister for Finance has put PTSB board in ‘straitjacket’, says minority shareholder

Minister for Finance Simon Harris “unequivocally” controls PTSB and has put the bank’s board “in a straitjacket”, a minority shareholder who is fighting to stop the bank’s acquisition by Austrian lender Bawag, has told the High Court.

The Tánaiste and Fine Gael leader, who currently holds a 57.5 per cent stake in PTSB, has benefited from “special, incredible rights” since the State paid €4 billion in 2011 to acquire a 99.2 per cent stake in the bank, “disapplying any rule of law imaginable” in the process, Piotr Skocyzylas told Judge Michael Quinn.

PTSB’s “board cannot move a muscle unless the Minister approves it”, Skocyzylas told the court, although “he has graciously allowed day-to-day control” to be operated by the bank’s executives.

Skocyzylas is one of four PTSB shareholders – who the court heard own a combined 0.00287 per cent share of the bank – objecting to a “scheme of arrangement” to sell PTSB (Ireland’s third largest domestic bank) to Bawag for €1.6 billion – or €2.97 a share.

He described the arguments made by Kelley Smith SC, counsel for PTSB, as “incongruous and grotesque”. She “has failed to deliver” a “certain amount of respect” towards him required, given he is a former director of the bank.

Skocyzylas said Smith’s comment that he and other litigating shareholders own a combined 0.002 per cent of PTSB was “an attempt to belittle us” and “completely irrelevant legally”.

He said he was once “one of the largest shareholders” of the bank, before “the Minister removed me as a director”.

He argued the Minister for Finance enjoys additional rights not held by ordinary shareholders because the State has entered into contractual agreements with the bank.

This resulted in unequal access to information during the consultation process upon the announcement of Bawag’s offer, he argued, and therefore the scheme should not be sanctioned.

He further argued a deed of partial release related to the Minister’s shares must be taken into account when sanctioning the scheme of arrangement as they were released on the same day and further demonstrate the Minister’s special status as PTSB’s majority shareholder.

“These special shareholder rights” must “play a critical role in the court’s decision”, Skocyzylas said.

Later in proceedings, Skocyzylas claimed “the minister is currently placing his shares with Bawag now”, prompting objection from Lyndon MacCann SC, counsel for the Minister, who said there “is not a scintilla of evidence” of this taking place.

Referring to MacCann, Skocyzylas went on to say: “His fees are paid by me as a shareholder.”

Skocyzylas clarified: “I have no idea whether or not this [sale of shares] was invoked”. However, addressing Judge Quinn, he said: “I don’t have to prove to you, or anyone else, that it was”.

“The threshold is so low that I simply have to prove that the right [to do so] exists,” he said. “Irrespective of whether or not it was invoked, what matters is the right.”

The case continues.