Anglo jury told prosecution coming to a close

Wednesday 02 April 2014 16.03
Patrick Whelan, William McAteer and Sean FitzPatrick deny giving illegal loans to 16 people to buy shares in the bank
Patrick Whelan, William McAteer and Sean FitzPatrick deny giving illegal loans to 16 people to buy shares in the bank

The prosecution in the Anglo trial is coming very close to the end of its case, the jury has been told.

The trial of Anglo's former chairman, Sean FitzPatrick, and two former directors of the bank, Patrick Whelan and William McAteer, is now in its ninth week.

Mr FitzPatrick, Mr Whelan and Mr McAteer deny giving illegal loans to 16 people to buy shares in the bank in July 2008.  

Mr Whelan also denies seven charges of being involved in fraudulently altering a loan facility letter.

The garda superintendent in charge of the investigation gave evidence this afternoon.  

Superintendent Eamon Keogh of the Garda Bureau of Fraud Investigation and the Office of the Director of Corporate Enforcement gave evidence that gardaí had conducted a number of searches of Anglo premises in February and March 2009. 

He said hundreds of thousands of documents had been seized both in hard copy and in electronic formats.

Superintendent Keogh gave evidence about an email sent by one of the accused, Mr Whelan, to former Anglo chief executive David Drumm on 4 July 2008, ten days before the transaction at the centre of this case took place.

Mr Whelan was preparing a letter to be sent to the financial regulator, Patrick Neary, outlining in particular the extent of lending to the Quinn Group at the time.

Mr Whelan sent a draft copy of the letter to Mr Drumm.

In the accompanying email to Mr Drumm, Mr Whelan said he'd "gone on a bit" and had said "as you are aware" a number of times, to make the point that we are all in this together.

Superintendent Keogh also told the court that another of the accused, Mr McAteer, Anglo's former finance director, told a ratings agency at the end of July 2008 that the bank had lent €150m to Sean Quinn as a short term bridging loan and that Mr Quinn would be repaying the bank in a week's time.

The seven men and seven women of the jury have been told they are not required tomorrow and the case will resume on Friday morning.

Earlier, a banking expert told the court that Anglo Irish Bank would not have been different to any other bank when it came to lending.

Tom Reid, a former director of Ulster Bank, rejected suggestions that Anglo was completely different to other banks, with more focus on business lending.

Patrick Gageby, senior counsel for Mr McAteer, said the bank had no ATMs, had only one branch in Dublin and was not like other retail banks.

However, Mr Reid said it would have been the same as other banks when it came to lending.

Yesterday Mr Reid told the bank he would not have approved the multi-million euro loans to ten business people as they did not have enough information about the net worth of the individuals.

However, today he said their net worth was not quite as relevant if the terms of the loan meant they were only liable to repay 25%.

He said if banks continued to lend money without full recourse they would very quickly go out of business.

Mr Gageby said Mr Reid had not taken account of the fact that Anglo had security for the loans in the form of a legal share mortgage.

Mr Reid said he would not agree that this was adequate security for the loans.

He also said the credit committee of a bank would usually be independent and would not involve those working in the lending section. 

He was asked to comment on the fact that Mr Whelan had signed the loan facility letters and had later signed the credit committee approval for the loans.

However it was put to him that Anglo's credit committee policy was different to other banks and Mr Whelan being a signatory to the loan approval fell within Anglo's policy.

Mr Reid worked for Ulster Bank from 1964 until 2004 and was on the board of directors when he retired. He was asked by the DPP to look at the transaction at the centre of this case.

He said he had looked at a number of documents relating to loans given by Anglo Irish bank in July 2008 to members of the 'Maple 10'.

The court has heard these were ten customers of Anglo who were given loans of around €45m each to buy shares in the bank, as part of a plan to unwind Seán Quinn's interest in the bank.