Irish Life directors walk, CEO stays in scandal

By Carmel Crimmins

DUBLIN, Feb 13 (Reuters) - Two senior directors have resigned from Irish Life & Permanent (IPM.I) over controversial deposits made with Anglo Irish Bank last year, but the bancassurer said on Friday it had not accepted its chief executive's offer to resign.

The scandal, involving 7.45 billion euros ($9.50 billion) worth of deposits made with Anglo in the run-up to its financial year-end, eclipsed the launch on Wednesday of a government bailout package for the country's top two banks, Bank of Ireland and Allied Irish, and prompted calls for the resignation of the Minister for Finance Brian Lenihan.

Lenihan had signalled on Wednesday that Irish Life's chief executive Denis Casey should go. [ID:nLC597820]

Instead, Finance Director Peter Fitzpatrick and the head of group treasury David Gantly resigned. David McCarthy, chief financial officer, has been appointed to replace Fitzpatrick.

Irish Life's board said while mistakes had been made the two men were only trying to support the broader financial services sector when they approved the deposits and thought they were acting in line with the wishes of the financial regulator.

"I have absolutely no doubt about the integrity of the individuals concerned. However, in providing support to the broader financial infrastructure, mistakes were made -- for which I and the board apologise unreservedly," Chairman Gillian Bowler said in a statement.

Ireland's financial regulator is now investigating whether Anglo Irish, which was nationalised by the government last month following a separate directors' loan scandal, used the deposits to mask other deposit withdrawals during September.

That month, when credit markets worldwide bordered on collapse following the downfall of Lehman Brothers, Irish Life & Permanent said it deposited 3.45 billion euros with Anglo Irish between Sept. 26 and 29 in return for 3.45 billion euros cash.