Shareholder anger at Anglo Irish meetingMonday 19 January 2009 11.56
Shareholders in Anglo Irish Bank have been venting their anger at a meeting of the bank in Dublin.
Angry shareholders criticised loans given to former chairman Sean Fitzpatrick; they have also expressed concern over the activity of external auditors.
The EGM was held at the Mansion House in Dublin.
Hundreds of shareholders were told by chairman Donal O'Connor that the manner in which loans to Mr FitzPatrick were handled was wrong and unacceptable and he apologised.
He said there were €179m of loans to directors, including €84m to Mr FitzPatrick.
He told the meeting that Mr FitzPatrick's loans were at the normal commercial rate and in accordance with the bank's normal underwriting criteria.
Board resignations called for
He said the moving of the loan balance out of the bank prior to audits happened because the bank did not have a focus on such activity and failed to identify it as a risk area, he said that would not happen in the future.
He also said the auditors were not aware of the transactions that happened in the past, which was greeted by boos from the floor.
Auditors Ernst and Young said: 'All of the audits conducted for Anglo Irish Bank shareholders were undertaken in accordance with the appropriate auditing standards.'
Shareholders called for the resignation of the entire board, many excluding the new Chairman and non-executive directors Alan Dukes and Frank Daly.
Mr O'Connor today repeated the insistence of the Finance Minister Brian Lenihan this morning that there was no run on the bank.
But one shareholder, raised the question, why the Government would nationalise Anglo, if there is in fact not a run on the Bank.
Shareholders are now anxious that they receive reasonable compensation and do not face total loss as a result of events at Anglo.
400 shareholders were registered for today's EGM. Mr O'Connor confirmed that there were a total of 20,000 shareholders in the bank.
Taoiseach Brian Cowen has insisted that it is 'business as usual' at Anglo Irish Bank and that people should now be reassured that the institution is solvent.
Bank in good stead, says Cowen
Yesterday evening, the Government announced plans to take complete control of Anglo Irish Bank, saying its previous plan to inject money into the bank is not the best way to secure its viability.
Shares in the bank were suspended this morning on the Irish Stock Exchange and on the London Stock Exchange.
Speaking in Tokyo this morning after meeting Emperor Akihito, Mr Cowen said that since Christmas the market had continued to lose confidence in Anglo Irish Bank.
He said corporate governance issues had affected its reputation and it was against this background that the decision had been taken.
Mr Cowen stressed the bank is 'in good stead and is solvent'.
Asked if the Government had a full picture of potential bad debts, Mr Cowen said consultants PricewaterhouseCoopers had been conducting an assessment of that.
He said the chairman and board would now be working with the Government to run the bank.
Bank policy in ruins - Opposition
Referring to the corporate governance issues, which had helped to bring about this situation he said the controversial loans to Mr FitzPatrick would be treated like any other debt to the bank.
However, Opposition parties claimed the Government's banking policy was in ruins.
The Government is likely to want the draft legislation to take over the bank, which runs to 38 pages, passed in a single day.
The legislation is expected to be brought before the Oireachtas on Tuesday.
The EU Commission confirmed the Government had given it prior notification of the nationalisation of the bank and it was not aware at this stage whether it would breach EU competition rules.
Mr Lenihan told EU Competition Commissioner Neelie Kroes of the plan last night, an EU competition spokesman said.
'We will be looking at the terms and conditions of the transaction in coming days to see if there are elements of state aid. We are not aware of the details at this stage,' he said.
Shares in the three Irish banking stocks closed lower this evening after the nationalisation of Anglo Irish.
Shares in AIB closed down 25% at €1.45, Bank of Ireland dropped almost 17% to 75 cent.
Elsewhere, Irish Life and Permanent's fall was smaller as it lost 2% to end at €2.20.
The banks helped drag the overall ISEQ index down 1% to close at 2,456.