Irish Nationwide members will have the opportunity to debate the issue of demutualisation at their annual general meeting, following the intervention of the financial regulator.
The Irish Financial Services Regulatory Authority (IFSRA) said yesterday that it had directed the building society to allow debate on a resolution tabled by members proposing a timetable to start the demutualisation process.
The motion had been rejected originally by the society. Mr Shane Hogan, who tabled the motion last December, said the society had initially stated that the motion was not legally valid.
Mr Hogan subsequently referred the matter to IFSRA, which issued its direction under the Building Societies Act yesterday.
A spokesman for Irish Nationwide said that it had advised the Central Bank and IFSRA that it would be "putting down an appropriate resolution to allow members discuss the issue of demutualisation at the annual general meeting".
However, a spokeswoman for IFSRA said the motion to be debated would have to be the one tabled by Mr Hogan. The meeting is due to take place towards the end of April.
Mr Hogan, who has been leading a campaign to demutualise the society, said last night that IFSRA's direction had put the demutualisation timetable in the hands of members for the first time.
"Voting for this resolution will mean that the board must commence demutualisation this year, regardless of what happens with the proposed changes to the 1989 Building Societies Act," he said.
IFSRA also directed that Irish Nationwide include a statement from Mr Hogan seeking backing for the motion with the annual meeting documents that will be circulated to shareholders.
The Irish Nationwide said its support for demutualisation was a matter of record.
"The society has lobbied for legislation to facilitate this over a considerable period of time," the spokesman said.
That legislation is now due in the Oireachtas before the summer recess.
The spokesman said the board of Irish Nationwide would wait for it to be passed before making any further decision on demutualisation.
IFSRA has also instructed Irish Nationwide to circulate a statement from Mr Brendan Burgess, who is working with Mr Hogan and who is challenging chairman Mr Michael Walsh for a seat on the Irish Nationwide board, along with a separate motion from Mr Burgess on the society's lending practices.
Mr Burgess and Mr Hogan claim the motion opens the way for similar action by EBS members to trigger a demutualisation process.
