A round-up of today's other stories in brief...
Why Anglo’s former lawyers might have uneasy moments
THE RECENT charges brought against Seán FitzPatrick and two other former directors of Anglo Irish Bank must be leaving the bank’s former corporate lawyers, Matheson Ormsby Prentice (MOP), shifting uncomfortably in their offices on the south Dublin quays.
FitzPatrick and the other two, Willie McAteer and Pat Whelan, were charged with providing unlawful financial assistance as a result of the bank’s loans to six members of the family of Seán Quinn and the Maple 10 group of investors to buy shares in Anglo. The three men were charged with 16 offences under section 60 of the Companies Act, with one charge relating to each borrower.
MOP advised on the July 2008 transaction in which Quinn’s massive investment in the bank held through contracts for difference was unwound with six Quinn family members taking a stake of 15 per cent and the Maple 10 taking a 10 per cent shareholding.
A letter from MOP to the directors of Anglo on July 22nd, 2008, outlined the advice they gave on the transaction, although it contains no specific reference to Maple 10. It included advice given on “the acquisition by each of certain other, unrelated parties, of less than 3 per cent each (in aggregate 13.4 per cent) of the issued share capital of the bank”.
The letter says the firm advised Anglo on the basis of the information provided, that “on the basis that the lending to the Quinn shareholders was in all respects in the ordinary course of business of the bank and that the loans provided did not reduce the net assets of the bank, that the provision by the bank of loans for the purpose of the acquisitions of shares and the taking of security over the acquired shares did not constitute unlawful financial assistance contrary to the provisions of the Companies Acts 1963 to 2006.” One wonders if MOP has been looking over the information provided by Anglo and the advice the firm gave in return in light of recent developments.
THE SETTLEMENT between the US government, Irish-based Full Tilt Poker and its Isle of Man-headquartered rival, Poker Stars, draws a line under a long-running battle between the two companies and the federal authorities. Under the deal’s terms, Poker Stars will hand back $731 million to clients of Full Tilt in the US and around the world and acquire the company’s business and assets.
The agreement settles court proceedings against both online poker companies brought by US attorney Preet Bharara, who described the players whose funds were diverted as “victims”.
However, as part of the deal, neither company admitted any wrongdoing.
Bharara has been pursuing both businesses, their executives and a third rival, Absolute Poker, since early last year. His actions have presumably left the authorities looking a little red faced.
Full Tilt’s is effectively an Irish-based business: its main centre of operations is in Cherrywood in Dublin, where at one stage it employed about 700 people.
Last year, Bharara accused the company of making off with $430 million of clients’ funds, and said that its chief executive, Raymond Bitar, had been running a Ponzi scheme.
The question marks thrown over the company’s behaviour led to the loss of its UK licence.
Bitar himself pleaded not guilty to a number of fraud-related charges in a New York court last month.
The operation was run out of Dublin and two Irish-registered and based companies, Pocket Kings and Pocket Kings Consulting, were named in proceedings brought by Bharara.
Bharara’s office would not comment last month when asked if it had spoken to the Irish authorities about its concerns about Pocket Kings.
From the standpoint of the US – and everyone else – Full Tilt was essentially an Irish company. This could not have left us looking very good in the eyes of a major trading partner and big investor.
Part, but only part, of the problem is that our own gambling legislation was written long before the internet and has yet to catch up. Online betting is a big business and legitimate players in the sector should be welcome here.
However, the Republic needs to regulate and license the sector properly.Quinn's contradictory quotes
TAKE THESE two quotes from bankrupt businessman Seán Quinn.
Here’s the first: “As has been said before, we lost €3 billion in the stock market so we owe Anglo Irish Bank €2.8 billion. Quinn Direct is the most profitable business we own. It is the most profitable business that I was ever involved in the start-up of. It is so profitable that we extracted as I said earlier €800 million of dividends in the past five years. Now in order for us to repay the Government, which we want to do and we as a company – and I resigned as chairman to facilitate this – what the family. . . the five kids owns the company, and myself, my wife and the five kids – all we want to do is to make sure that the taxpayer is at no loss by the Quinn Group or the Quinn family. We want to pay all our debts 100 per cent.”
Here’s the second: “But the €2.8 billion is owed by Quinn Group. Quinn Group borrowed that money. A hundred per cent of this money is owed by the group. We don’t owe it.”
The first quote was from Quinn’s interview with RTÉ’s Prime Time on June 3rd, 2010. The second is from an interview with him in the Irish Mail on Sunday on July 22nd last.
The difference between them is that in June 2010 there was still a possibility Quinn could hold on to Quinn Insurance under a proposal he made last year to repay Anglo €2.8 billion in seven years after a further €650 million is provided by the State-owned bank. By the second interview, the so-called Quinn family proposal had long since been rejected, he had lost control of the insurer and his Quinn group of businesses and he had been declared bankrupt. What changed between the two interviews was his ability to repay the debt.
He seems to claim that because he cannot pay, he should not be liable for the €2.8 billion.
Quote of the day
Draghi has placed the hurdle so high in the market that he is almost doomed to pass under it.
– Ulrich Kater, Deka bank economist ahead of today’s ECB meeting.
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The ECB meets amid expectations the bank will announce steps to lower the borrowing costs of indebted Spain and Italy