The former chairman of Anglo Irish Bank Seán FitzPatrick "regretted" not becoming "more personally involved" in the recourse of the Maple 10 loan transaction than he had, Dublin Circuit Criminal Court was told today.
Anglo's former chief financial officer Matt Moran recalled a conversation which took place with Mr FitzPatrick after the transactions began, either the week of or the week after July 14th, 2008.
Mr FitzPatrick wanted to ask him about the transaction, he said.
“He asked, as if talking out loud, ‘I wonder was that the right transaction to do’, specifically in respect of the recourse to the ten borrowers,” Mr Moran said.
Mr FitzPatrick “questioned” if 25 per cent recourse for the loans “was enough”, Mr Moran added.
“He made a comment to me that he regretted that he didn’t become more personally involved in this issue than he had done.”
Mr FitzPatrick (65) of Greystones, Co Wicklow, William McAteer (63) of Rathgar, Dublin, and Pat Whelan (51) of Malahide, Dublin, have been charged with 16 counts of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in the bank, contrary to section 60 of the Companies Act.
Mr Whelan has also been charged with being privy to the fraudulent alteration of loan facility letters to seven individuals. All three men have pleaded not guilty to the charges
A few days before the transaction was executed, Mr Moran said went to Mr Whelan over concerns that a “side letter” for the loan agreement was to be put in place.
Mr Moran said he told Mr Whelan that a side letter which took away 25 per cent personal recourse did not seem “appropriate” in “this type of instance”.
Mr Whelan said it “wouldn’t be done” and he “gave me assurance of that”, Mr Moran said.
The conversation happened on July 10th 2008 when he went to Mr Whelan’s office with Anglo’s then head of compliance Fiachre O’Neill.
Prosecution counsel Paul O’Higgins SC told the jury that while he said yesterday that it would not hear from Mr O’Neill , that it actually would hear from Mr O’Neill.
After the transactions, Mr Moran said he received a call from the Con Horan of the Financial Regulator’s office regarding the €170 million lent by Anglo to the businessman Seán Quinn to “go long” on the Quinn contracts for difference position.
Mr Horan requested that the €170 million be deducted from the bank’s own funds to “reduce the bank’s capital ratio”, Mr Moran said.
Mr Moran said he told Mr Horan that this was “in effect penalising the bank” for “additional funds lent to Seán Quinn”.
Mr Horan had “stressed” that this would help him with the board of the financial regulator, Mr Moran said.
In consultation with Mr McAteer, they agreed to “accede to the regulator’s request”, Mr Moran said.
This was largely because it was understood Mr Quinn would refinance the loan and this meant it was a short term penalisation of the bank, he said.
The case continues.
