The High Court has refused three shareholders’ application for interim injunctions that would have restricted the Minister for Finance’s use or disposal of his Permanent TSB Group Holdings shares while their substantive challenge awaits a ruling from the Court of Justice of the European Union (CJEU).
The shareholders are challenging a July 2011 direction order that left the State owning 99.2% of the company. The High Court had referred questions of EU law to the CJEU in the underlying proceedings. The injunction application sought to prevent an irreversible disposal or cancellation of the Minister’s shares and to restrict his voting rights on proposals that could further reduce the minority shareholders’ stake.
The court said the referral did not change the direction order’s legal status. The order remained legally valid unless set aside or varied, and the earlier decision to seek a CJEU ruling did not make it provisional or undermine its standing. Both sides had an arguable case, the court found.
The Minister and the company argued that the injunctions could obstruct a capital raise needed to meet regulatory requirements. Affidavits described an additional €855 million capital requirement following the bank’s failure of the adverse scenario in a 2014 stress test. The capital plan had not yet been approved by the European Central Bank, and the details had largely not been disclosed to the court for confidentiality reasons. The Minister’s evidence warned of possible sanctions, including fines or loss of the bank’s licence, if it failed to meet the requirement. The judge found no serious risk of the bank entering resolution on the evidence before her.
The judge considered the risk to the bank and the public interest in the State’s investment more compelling than the risk to the shareholders from refusing interim relief. She concluded that restricting the Minister from selling shares or voting on measures such as issuing new shares could jeopardise recapitalisation. She also noted the Minister’s undertaking that he would not argue the substantive case had become moot if he ceased to be a shareholder, and his undertaking to consent to the proceedings being amended to include a claim for damages.
The plaintiffs had not sought damages and said they preferred the statutory remedies in their substantive case. The court nevertheless found damages could be an adequate remedy if they later succeeded and chose to claim them. It also found their undertaking to compensate the Minister or the company for losses caused by an injunction had no practical force in the circumstances.
The judge rejected delay as a reason to refuse the application. She refused the injunctions. The underlying challenge to the direction order remained unresolved pending the CJEU ruling.