A solicitor involved with the deal to unwind businessman Sean Quinn's holding in Anglo Irish Bank has said he did not give any legal advice about loans to the Maple 10 businessmen.
Robert Heron, formerly of Matheson Ormbsy Prentice - who advised the bank in relation to the unwind - told the Dublin Circuit Criminal Court yesterday he was not aware that money had been loaned to the Maple 10 to buy shares in the bank until July 28th, 2008, two weeks after the transaction was carried out.
He said the advice he gave related to loans to members of the Quinn family only.
Mr Heron was giving evidence in the sentencing hearing of two former directors of the bank.
William McAteer (63), of Rathgar, Dublin and Pat Whelan (52) of Malahide, Dublin, were found guilty earlier this month of providing unlawful loans to the Maple 10 in July 2008 to buy shares in the bank, contrary to section 60 of the Companies Act.
McAteer and Whelan were found not guilty of six counts of providing unlawful financial assistance to six members of the Quinn family.
Former chairman of the bank Seán FitzPatrick (65), of Greystones, Co Wicklow, was acquitted of the same allegations brought against him.
The court had heard that by July 2008 Mr Quinn’s contracts for difference (CFDs) – investment products based on share price – were equivalent to more than 28 per cent of the bank’s shares. A deal was executed on July 14th which involved providing loans to the Maple 10 to buy just over 1 per cent each of the shares underlying the CFDs, with six members of the Quinn family buying 15 per cent of the shares.
Mr Heron said he advised Fiachre O’Neill, head of compliance at the bank, in relation to the loans provided to the Quinn family. His initial advice was given in relation to a deal agreed in March 2008 which ultimately did not go ahead.
He said he told Mr O’Neill that “generally speaking” it was an offence for a company to lend money for the purposes of acquiring shares in that company, but there was an exception - related to loans in the ordinary course of business - that could apply to the Quinn family. He said he indicated the “kinds of factors” that were relevant to the ordinary course of business, including the duration of the loan, its value, interest rate and other terms.
He told Úna Ní Raifeartaigh SC, for the prosecution, he gave his advice in relation to the July deal over the phone, and only gave a summary of his advice in writing after the deal went through following a request from Mr O’Neill. The written advice referred to lending to the Quinns. There was no reference to loans to the Maple 10, though it did refer to the acquisition of shares by “certain unrelated parties”.
Judge Martin Nolan suggested the legal advice was “If you’re happy with it, I’m happy with it”.
“What’s the point in consulting at all with a solicitor if that is the advice that’s given here?” he asked.
Mr Heron also said he had “very minimal” recollection of a “due diligence” conference call on July 12th with Mr O’Neill and Matt Moran, chief financial officer at the bank, and staff from Morgan Stanley, the investment bank handling the unwinding of the CFDs.
He also took no notes of the call, though in his diary on the day he had written words that related to the call; “Nine CFD”, “28 per cent”, “Maple name”, “13 per cent” and “10 individuals Maple”.
Brendan Grehan SC, for Mr Whelan, pointed out that others on the call had taken notes and they believed Mr Heron had advised the deal fell within the exception allowed under section 60.
“Is it possible you might have said that?” Mr Grehan asked.
“I think it’s extremely unlikely, judge,” Mr Heron responded.
The sentence hearing continues today.
