Former Anglo Irish shareholders due no compensation – assessor

Former shareholders in Anglo Irish Bank are not due any compensation from the State as a result of the nationalisation of the now-defunct lender 11 years ago, according to a Government-appointed assessor.

The assessor, David Tynan of PwC, has judged in a report published on Wednesday that it "was clear or ought to have been clear" to directors of Anglo Irish Bank in January 2009 that it "could no longer continue to trade as a going concern as it was both cashflow and balance sheet insolvent".

That was after then minister for finance Brian Lenihan pulled a planned €1.5 billion capital injection into Anglo Irish Bank after he learned that the group faced an immediate outflow of up to €3 billion of deposits. Revelations had also emerged that it had secured €7.2 billion of deposits from Irish Life & Permanent the previous September to flatter its finances.

“In that instance, they needed to pursue an insolvency option or proceed with the nationalisation of the bank,” Mr Tynan said. “The board concluded that the bank would not be able to continue to trade without Government support and consented to the bank being taken into public ownership.”

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The assessor also noted that a Jones Lang LaSalle report prepared in December 2008 to aid Irish authorities as they weighed problems in the banks found that property values were 45 per cent lower than those estimated by the lenders.

The assessor concluded: “I therefore determine that the fair and reasonable aggregate value of the transferred shares and the extinguished rights as at 15 January 2009 for the purposes of payment of fair and reasonable compensation for the acquisition of those shares and the extinction of those rights was nil.

“I therefore determine that no compensation is payable to former shareholders of any class or to former rights holders,” he continued.

Appointment of assessor

Laws enacted in January 2009, when Anglo Irish Bank was seized, specified that an assessor must be appointed to see if it had a real value at the time, and whether shareholders should receive compensation.

However, the Department of Finance had initiated the process only in late 2018 as it issued an invitation to firms to tender for the work.

Mr Lenihan had to move within months to pump capital into Anglo Irish Bank as its bad loans soared following the property crash. Taxpayers ultimately committed €29.3 billion to Anglo Irish Bank by the end of 2010.

The lender was subsequently renamed Irish Banking Resolution Corporation, merged with fellow failed lender Irish Nationwide Building Society, and the combined entity was put into liquidation in February 2013.