Trial hears asst regulator ‘positive’ about deal

//Trial hears asst regulator ‘positive’ about deal

Trial hears asst regulator ‘positive’ about deal

Friday 14 February 2014 21.52

Pat Whelan, William McAteer and Seán FitzPatrick have pleaded not guilty to the charges Pat Whelan, William McAteer and Seán FitzPatrick have pleaded not guilty to the charges

The Dublin Circuit Criminal Court has been told the second in command of the Financial Regulator’s office was “very, very, very positive” about a deal in which ten Anglo customers borrowed money from the bank to buy shares in Anglo.

Brian Gillespie, Anglo’s former head of compliance in Ireland, was giving evidence at the trial of a former Anglo chairman and two former executives of the bank.

Seán FitzPatrick, 65, from Greystones in Co Wicklow, 51-year-old Patrick Whelan of Malahide in Dublin and 63-year-old William McAteer of Rathgar in Dublin have pleaded not guilty to the charges.

Mr Whelan also denies seven charges of being involved in the fraudulent alteration of loan facility letters in October 2008.

Mr Gillespie said he was involved in the administration of loans to the so-called Maple Ten group of borrowers to buy Anglo shares in July 2008.  

Documents had to be prepared for the international financial services company Morgan Stanley, the firm which was to implement the deal, as part of the transaction to unwind Seán Quinn’s stake in the bank through high-risk Contracts for Difference.   

“Maple” was a code word given to the deal by Morgan Stanley.

Mr Gillespie said he was told the CFD situation could destabilise the financial system of the entire country. 

He said he was in work on the weekend before the deal went through in July 2008. 

He said he heard conference calls between Morgan Stanley and legal firm Matheson Ormsby Prentice and between Morgan Stanley and Con Horan from the Financial Regulator’s office.  

He said Mr Horan was “very, very, very positive” about the transaction.  

He said there were calls between Anglo’s chief financial officer, Matt Moran, and Mr Horan before and after the call with Morgan Stanley.

He said his view was that Robert Herron, a solicitor from Matheson Ormsby Prentice, was “pro” the deal.  

He agreed that Morgan Stanley was doing due diligence on the deal, and making sure everything was in order. 

He said the conference calls followed agendas set by Morgan Stanley.  

He said after the calls, there was no question about Morgan Stanley not being satisfied.

Earlier, the court heard from another of the Maple Ten.  

Developer John McCabe told the court he had received a phone call from Mr Whelan on 9 July 2008, telling him he had a proposition for him and was anxious to meet him.

He said he met Patrick Whelan and Anglo’s former chief executive David Drumm in the bank the following day.

He said they told him a major investor held 25% of the bank’s shares and was only willing to redeem 15% and they were looking for four or five long-term clients of the bank to help by buying some of the bank’s shares.

He said he asked was it legal and was told it was and was told the Financial Regulator, Central Bank and Department of Finance were all aware of the deal. 

He said he was told the Financial Regulator was anxious to get it done and was in contact every day.

Mr McCabe said he had almost no experience in share dealing and it was not something he wanted to get into.  

But he said the bank had been very good to him over the years and he wanted to continue doing business with them and he was anxious to help them.  

The bank was to lend him €60m to buy shares and he signed a loan facility letter.

He told the court he was contacted later in July by Mr Whelan who told him the share price had fallen and a new facility letter would be sent out. 

‘Nothing underhand’ in  documents

The court also heard from a former Anglo Irish Bank lending manager, who said there was nothing underhand about the way loan documents were prepared for the Maple 10 group of customers to borrow money to buy the bank’s shares. 

Elma Kinane was involved in preparing documents for the Anglo’s credit committee in relation to loans to the so called Maple 10 group of borrowers to unwind Mr Quinn’s stake in the bank.  

When asked why these documents stated that the borrowers had approached the bank when this was not the case, Ms Kinane said the documents had to be prepared quickly and she had limited knowledge about the borrowers. 

She said she made certain assumptions and presumed any mistakes would be corrected when she sent the documents to her superiors. 

The court has heard there was no credit committee meeting to approve the Maple 10 loans.   

Facility letters had been sent out to the borrowers before the approval was signed off in the bank. 

She said her team’s understanding was that all matters relating to the Quinn Group were discussed at length at the board of the bank.

Ms Kinane who was manager of the team responsible for the Quinn Group, said she became concerned about Mr Quinn’s failure to repay a loan of €3m in February 2008,  at a time when the Quinn companies were making a profit of €500m.

Ms Kinane also told the Dublin Circuit Criminal Court that her team became aware the Quinn Group needed a loan of €500m at the end of 2007, to replenish funds that had been spent on Sean Quinn’s bet on Anglo shares. 

She said the former Anglo chief executive, David Drumm, was keen that the team accommodated the request. 

He told them they “must find a way to do it”.

She said she was concerned about the level of exposure to the Quinns as the group was not honouring commitments it had made to the bank in relation to its security for loans. 

Ms Kinane has finished her evidence and the trial has ended for the week. 

Before sending them home, Judge Martin Nolan warned the eight women and seven men not to google or investigate matters themselves.



RTÉ News – Business Headlines

By | 2014-02-15T16:18:39+00:00 February 15th, 2014|Business|0 Comments