Call for Dunfermline executives to face Westminster grilling

Published on Sunday 5 April 2009 21:41

DUNFERMLINE Building Society executives face the prospect of being summoned to Westminster to explain their part in the collapse of Scottish mutual.

Local MP Willie Rennie will today write to the Westminster parliament's Scottish affairs committee urging it to hold an inquiry into the Dunfermline's downfall.

If the committee, chaired by Labour MP Mohammad Sarwar, agrees to the request, then the men who took the 140-year-old society to the position where it had to be taken over by the Nationwide would face intense scrutiny of their actions.

Former chairman Jim Faulds, outgoing chief executive Jim Willens and his predecessor, Graeme Dalziel, could be among those asked to give evidence on the crisis which engulfed one of Scotland's iconic financial institutions.

Rennie yesterday explained he would be asking the cross-party committee to investigate three specific issues related to the collapse of the Dunfermline – and its subsequent takeover by Nationwide. These were:

&#149 the recent management of the society, including the role of both executives and board members

&#149 the role of the Financial Services Authority (FSA) regulator in the purchase by the Dunfermline of more than 150 million of self-certified loans from the two US firms – GMAC and a subsidiary of Lehman brothers

&#149 the events of the final six months at the society, including the involvement of the "tri-partite" regulators – the government, the Bank of England and the FSA.

Rennie commented: "The Scottish affairs select committee has a good reputation for conducting thorough and fair investigations.

"I want to have answers on why and how decisions were made by the various different stakeholders – from the society itself right through to the government." The Liberal Democrat MP continued: "There is a big question over whether the FSA, which was in the middle of the crisis in the banking system, was able to devote enough time and effort to Dunfermline.

"If it was not able to do that, then there are questions over whether, if earlier action had been taken, we might have had a different outcome with the potential for the Dunfermline to have remained as an independent entity."

To launch the inquiry, the 11-member committee would have to agree, but it is understood some MPs are sympathetic to the idea. Rennie has pressed for an investigation by the Scottish affairs committee because the Treasury committee has its hands full with its inquiry into the banking crisis.

Rennie was cautiously optimimistic over reports yesterday that head-office staff at the Dunfermline are likely to escape large-scale job losses following its merger with Nationwide, it has emerged. Our sister paper, Scotland on Sunday, reported that Nationwide is expected to make no more than 30 redundancies, far fewer than the clear-out that some have feared.

Rennie said: "I am sure that the Nationwide will see the value of the staff at the Dunfermline Building Society. But I would be surprised if, in the long run, there were not some job cuts.

"I will be working with Nationwide to make sure that they understand that Dunfermline is a good place to do business."