FORMER ANGLO Irish Bank chairman Seán FitzPatrick, who was released from Garda custody yesterday after almost 24 hours of questioning, is taking measures to protect himself from his personal creditors, The Irish Timeshas learned.
The most significant mechanism available to Mr FitzPatrick to shield himself from creditors would be to seek to appoint himself an “arranging debtor”, a rarely used protective measure under bankruptcy law.
Arranging debtors are protected by the courts if they can devise a so-called scheme of arrangement where creditors would be repaid some or all of their debts on an orderly basis over an extended period of time. The arrangement must be approved by three-fifths of creditors in number and value of debt.
Mr FitzPatrick was released from Garda custody yesterday after being detained for 31 hours by detectives investigating alleged financial irregularities at Anglo.
The 61-year-old former banker was released without charge from Bray Garda station in Co Wicklow just before 2pm after being arrested at dawn the previous day during a surprise Garda search at his home in nearby Greystones.
He was arrested under the Criminal Justice (Theft and Fraud Offences) Act, which can be used to deal with “white-collar” crimes such as false accounting.
Gardaí could detain him for 24 hours without charge. As Mr FitzPatrick opted to rest overnight, his detention was suspended at 1am yesterday and resumed at about 8am after he had spent the night in a cell.
He was greeted with cat calls and taunted by members of the public as he walked briskly from Bray Garda station yesterday to a car without making any comment.
The Garda Bureau of Fraud Investigation team that arrested Mr FitzPatrick are investigating three major issues at Anglo – the concealment of Mr FitzPatrick’s director loans; the lodging of €7.45 billion in deposits by Irish Life Permanent (ILP) over Anglo’s 2008 year-end and the “golden circle” transaction in which 10 customers bought Anglo shares to prop up the bank’s share price.
Garda sources said the focus of Mr FitzPatrick’s questioning was the €7.45 billion ILP transfers.
His arrest was one element of a “long and complex” inquiry, the Garda sources said, and criminal files on the issues under investigation would not be sent to the Director of Public Prosecutions until further inquiries were conducted.
Mr FitzPatrick owes about €85 million in loans to Anglo. His most valuable asset is potentially an investment in a Nigerian oilfield.
The company behind the project, in which Mr FitzPatrick is an investor, has claimed that the Ekeh oil field could be worth close to $500 million (€370 million) if it is put into full production to tap an estimated 20 million barrels of oil.
However, the “marginal” oil field needs further expenditure of $35 million – before operating costs – to bring it to continuous production, which will require further drilling. Mr FitzPatrick and ex-Anglo director Lar Bradshaw have a 30 per cent interest in the oil field against which they have borrowed about $40 million (€30 million) from Anglo on a shared 50-50 loan.
Anglo issued legal action against Mr FitzPatrick this month to recover loans of €70 million, excluding his share of the €30 million loan owing on the oil field. The bank has given him time to dispose of his interest, though talks to sell his stake to his Nigerian partners in the project have stalled following Anglo’s lawsuit.
Securing a scheme of arrangement to repay his creditors could give Mr FitzPatrick flexibility to sell his interest in the oil field at a later date for a higher price were the field to go into full production.
