Brian Lenihan Jnr (Dublin West, Fianna Fail)

The State has its own effective management teams in operation in Anglo Irish Bank and Irish Nationwide Building Society. This section was being prepared in any event for the resolution legislation. It is considered to be a power which is of considerable value. It can only be exercised in exceptional circumstances or with the consent of the relevant institution. Under section 20, the special manager takes over the management of the business and carries it on as a going concern with a view to preserving and restoring the financial position in a manner consistent with the purposes of the legislation.

In some matters the special manager can, with the consent of the Minister, overrule shareholders. He or she must provide reports and other information for the bank and the Minister. In that sense, there is a requirement to provide information. He or she must act in the best interests of the bank, of which he or she is the special manager. The section provides that while a relevant institution is under special management, the functions of the directors and, with the consent of the Minister, the powers of the general meetings may be exercisable only by the special manager. The Minister's written prior consent is required for a number of actions, including the winding up of the institution in question or the appointment of an examiner, an inspector or a receiver. There must be written notice to the Minister if a party wants to enforce security against the assets of the bank.

Section 20(3) makes it clear that the business of an institution under special management shall continue as a going concern and that no agreement, policy, transaction, bank account or obligation of the institution is avoided, cancelled, stayed or otherwise affected by reason only of the appointment of a special manager.