Abramovich in threat to sue over Irish Nationwide losses
RUSSIAN billionaire Roman Abramovich may take legal action against the Irish government over its handling of Irish Nationwide's massive property losses.
The move came over the Government's decision to make subordinated bondholders in Irish Nationwide pay part of the bill for dealing with the building society's huge property losses.
"We urge Irish authorities to reconsider their position on INBS subordinated bonds and come out with a detailed plan on what is going to happen to this institution," a statement from Abramovich's investment vehicle Millhouse said in a statement.
"In the meantime, we are fully prepared to vigorously defend our position using all possible legal means."
The Government said on Thursday it expected bondholders in Irish Nationwide and nationalised lender Anglo Irish Bank to make "a significant contribution" towards meeting the cost of a bill of up to €40bn for cleaning up their years of reckless lending.
Anglo Irish, which has €2.4bn in subordinated bonds, accounts for over two thirds of Ireland's "worst case" bank bill of €50bn. Irish Nationwide will cost taxpayers €5.4bn.
Abramovich's investment vehicle said making Nationwide's subordinated bondholders accept losses on their investments was both unfair and possibly illegal.
"We fail to see how we can 'significantly contribute' to the cost of survival of the Irish Nationwide Building Society given that even if the entire lower tier 2 debt is wiped out this would only save a meagre 2.3pc of the total cost of the bailout of Irish Nationwide."
A spokesman for the Department of Finance said it was working with the country's Attorney General on the issue of burden-sharing by subordinated bondholders in Anglo Irish and Irish Nationwide.
Abramovich, who owns Chelsea football club in London, is Russia's fourth richest man with an estimated worth of $11.2bn.