Former Anglo director to say Seán Quinn stake disclosed

The board of Anglo Irish Bank told the financial regulator about Seán Quinn's large shareholding in the institution as soon as it became aware of it, the Oireachtas banking inquiry is to hear on Thursday.

Former non-executive director of Anglo Fintan Drury will tell the committee the bank’s board acted appropriately when it learned of the large stake Mr Quinn had built in the institution up to 2008.

Mr Drury will insist he and other directors informed the financial regulator once the position became clear.

It emerged in 2008 that Mr Quinn had built a large stake in Anglo through the purchase of shares via Contracts For Difference.

Mr Drury is to tell the committee Anglo failed to meet basic practices and standards and that was a source of regret.

The former director of the bank is expected to say he and the board had complete faith in the regulatory system and its powers of supervision were sufficient and robust to oversee the system.

Board dinner

Mr Drury is to be questioned by members about his presence at a board dinner in April 2008, which was also attended by former taoiseach

Brian Cowen

and Anglo chief executive

David Drumm

.

In a written statement, Mr Drumm has contradicted evidence by Mr Cowen given to the inquiry about whether banking issues were discussed at the function. Mr Drury was at the dinner and will be questioned by members about his version of events. However, it cannot reference Mr Drumm's correspondence after a late intervention by the Director of Public Prosecutions.

The DPP contacted the inquiry raising concerns about publishing the statement fearing it might prejudice possible criminal proceedings.

The inquiry on Wednesday accepted the direction of the DPP and agreed not to publish his statement. However it said it would seek further advice from its own legal team on the matter.

Harney testimony

Meanwhile, former tánaiste

Mary Harney

and former

Green Party

leader

John Gormley

criticised the banks at the inquiry and said the institutions had misled the government on the scale of the crisis.

Ms Harney said “reckless lending like you wouldn’t imagine” had caused the crash and the blame for the downturn lay initially with the banks.

Mr Gormley said the cabinet was assured the issues were ones of liquidity.

The inquiry will hear from Mr Drury, former Anglo Irish Bank chairman Alan Dukes and chief executive of the Irish Banking Resolution Corporation Mike Aynsley.