Former chief financial officer of Anglo Irish Bank Matt Moran began giving evidence under immunity from prosecution yesterday.
Mr Moran agreed with prosecution counsel Paul O’Higgins SC that he was giving evidence in “specific circumstances”, in which he was granted immunity “for the purpose of this trial, matters with which this trial is concerned and also in respect of other matters in respect of which prosecutions may be taken”.
This followed discussions between Mr Moran’s legal representatives and the Director of Public Prosecutions, Mr O’Higgins said. “I’m not suggesting you are guilty or not guilty of anything,” counsel added.
The bank’s former chief financial officer said he was the “key person” who dealt with Morgan Stanley over the unwinding of the Quinn CFD (contracts for difference) position.
While there had been a “lot of noise” in the markets about Seán Quinn’s possible stake in Anglo in 2007, this had not “crystallised” for him until late 2007 or early 2008.
Black and white
Mr Moran said he saw the Quinn CFD position in "black and white" in the office of Anglo's then chief executive David Drumm.
“I was in David Drumm’s office and he produced a piece of paper from his desk,” he said. On the piece of paper were several “prime brokerage houses” with which Mr Quinn held positions in Anglo shares, he said.
Seán 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.
David Drumm had asked Mr Moran to contact Morgan Stanley “to seek support in seeing how the situation could be dealt with” regarding the Quinn CFD position, Mr Moran said. He and Mr McAteer met the firm in London in January 2008 to discuss the Quinn situation.
Mr Moran outlined the “multiple initiatives” to deal with the Quinn situation, some of which he had been involved in. He had been working on two of these on July 8th, when he called into Mr McAteer’s office at the end of the day.
Ten clients
It was then that the accused, Mr McAteer, told him, that "the executives" had decided to approach "10 clients of the bank" to see would they take some of Seán Quinn's position.
Mr Moran understood the executive to mean David Drumm, Willie McAteer, Declan Quilligan (head of Anglo in the UK), Pat Whelan and Tony Campbell (head of Anglo in the US ).
The next morning he met Anglo head of compliance Fiachre O’Neill and Mr McAteer, he said.
Mr McAteer outlined the proposal to approach bank clients and to provide lending on a 25 per cent recourse basis.
Regulator
On July 9th, Mr Drumm told Mr Moran that he had spoken to the regulator about the transaction and had received approval. "He gestured to me a thumbs-up," Mr Moran said.
Mr Moran engaged “intensively” with Morgan Stanley over the next few days regarding the Quinn CFD unwinding.
This was “quite specialised”, he said. “None of us had ever been involved in unwinding CFDs,” he added. This was in order to set up a position “on Monday morning” to approach the brokers with whom Mr Quinn had CFDs and to convert them to shareholdings for Mr Quinn, his family and “other investors”, he said.
The trial continues today with Mr Moran’s evidence.
