The trial of former Anglo Irish Bank chairman Seán FitzPatrick for allegedly misleading the bank's auditors about multi-million euro loans between 2002 and 2007 has begun.
A jury at Dublin Circuit Criminal Court heard that loans taken out by Mr FitzPatrick, his wife and family members increased from in the region of €10 million in 2002 to some €100 million in 2007.
The loans were used to finance development of shopping centres, hotels and offices at a time when a lot of money could be made in property development, prosecutor Dominic McGinn SC said.
He said that the amount of these loans was “artificially reduced” for a period of two weeks around the bank’s financial end of year statement by short term loans from other sources, including Irish Nationwide Building Society.
He said this trial was about the alleged failure by the former director to disclose the extent of his loans to the bank’s auditors Ernst & Young, now EY.
Not guilty plea
Mr FitzPatrick (68), of Whitshed Road, Greystones, Co Wicklow, has pleaded not guilty to 27 offences under the 1990 Companies Act. These include 22 charges of making a misleading, false or deceptive statement to auditors and five charges of furnishing false information in the years 2002 to 2007.
Opening the case for the prosecution, Mr McGinn told the jury that Mr FitzPatrick is a qualified chartered accountant and was a director of the bank. He said there was a requirement in law under company law to make declarations about the level of loans made to directors.
These declarations had to be made generally in end of financial year statements and also to the bank’s auditors. He said the financial statements were relied on by depositors, investors and borrowers to give a true and accurate picture of the performance of the bank.
‘Artificially reduced’
Mr McGinn told the jury that as well as getting short term bank loans, the accused would also transfer funds from deposits and saving accounts to temporarily reduce the size of his loans on the Anglo books around their year end date every September.
“The amount of loans were artificially reduced,” he said. Counsel said that the trial was not about loans or about what they were for, but about the statements made about the loans to the auditors.
He told the jury that Mr FitzPatrick was entitled to a presumption of innocence, which was a fundamental cornerstone. He said that it was not enough for the jurors to think that “he is probably guilty”.
The jury of five men and eight women will begin hearing evidence on Friday before Judge John Aylmer. The case was listed to run for 12 weeks. An enlarged jury panel with 15 members was sworn in to hear the lengthy case in late September.
Since then the case has spent weeks in legal argument and two jurors have already been excused from the case for work and personal reasons.