FORMER ANGLO Irish Bank head of lending Tom Browne is seeking court orders requiring the bank to disclose extensive documents concerning loans made to businessman Seán Quinn and his family.
The loans were made to fund liabilities incurred as a result of transactions made to finance the purchase of shares in Anglo itself.
Anglo has brought proceedings against Mr Browne over unpaid loans of some €50 million. He claims those loans are vitiated due to alleged fraudulent misrepresentation of Anglo via its “silence” in the last three months of 2007 over loans to Mr Quinn and other matters relevant to its share price.
Various loans were issued to artificially enhance the bank’s share price, Mr Browne claims.
He alleges Anglo advanced millions of euro to him in late 2007 to buy the bank’s shares when it and various State authorities knew Anglo had lent substantial sums to Mr Quinn in November 2007 to fund Mr Quinn’s liabilities under Contracts for Difference (CFD) to finance the purchase of shares in Anglo.
The bank failed to tell him about matters which, if known to the financial markets, would have had “a devastating effect” on Anglo’s stability, Mr Browne claims. He says he would not have executed his share options in late 2007 if he was aware of these matters and consequently would not have suffered losses when the bank’s share price collapsed.
Discovery issues were before Mr Justice Peter Kelly yesterday. In addition to the Quinn loan documents, Mr Browne is seeking a wide range of internal documents aimed at ascertaining the state of knowledge from 2007 within the bank about the fall in its share price.
He also wants documents related to the reasons for the movement of €7.3 billion in loans from Anglo to Irish Life Permanent. All documents related to the consideration by Anglo senior management of Mr Browne’s indebtedness over the duration of the loan facilities are also sought.
Anglo contended the discovery being sought by Mr Browne was too extensive. Many of the documents being sought were irrelevant, it argued.
After hearing arguments from both sides, Mr Justice Kelly said Mr Browne’s discovery application was very wide-ranging in its scope and possibly very deep in its thrust. He wanted some time to consider the matter and hoped to rule next week. The judge suggested some of the information being sought by Mr Browne’s side, including about the Quinn loans, might be secured more effectively by serving interrogatories (questions requiring sworn answers) on Anglo.
Earlier, the judge upheld arguments by Anglo that Mr Browne should discover a range of documents related to his purchase of shares in Anglo and the purchase of properties and other investments, including all documents related to purchase of CFDs in Anglo, Bank of Ireland and AIB.
Mr Browne had contended the discovery sought was too extensive and not required for the proper determination of the proceedings.
Last December, Mr Justice Kelly ruled that Mr Browne – managing director lending Ireland with Anglo between early 2005 and 2007 – may defend the bank’s €50 million claim against him on grounds including that the bank was guilty of fraudulent misrepresentation in allegedly failing to tell him in 2007 about the purchase of 28 per cent of its shares by Mr Quinn. The case against Mr Browne, Brighton Road, Foxrock, Dublin, arises from loans of £31.6 million and £1.91 million; €11.6 million and $765,976 to Mr Browne, including a loan of February 2008 to buy property at Bishopsgate in London.
Mr Browne received €8.19 million in salary and benefits from Anglo between 2005 and 2007, the court previously heard.
