Ex-Anglo worker ‘refused’ to sign letter on Maple Ten loans
Former associate director ‘voiced discomfort’ about document which altered loan facility
Pat Whelan, William McAteer and Seán FitzPatrick leaving the Circuit Criminal Court in Dublin yesterday. Photograph: PA The trial of former Anglo Irish Bank directors Pat Whelan (left), William McAteer (centre) and Seán FitzPatrick is continuing at Dublin Circuit Criminal Court.
A former associate director of Anglo Irish Bank refused to sign a letter which he said retrospectively altered the conditions of the Maple Ten loans and weakened the bank’s position.
Giving evidence at the trial of three former Anglo directors, Lorcan McCluskey said he wasn’t comfortable signing the altered loan facility letters.
The first loan facility letter sent in July set the security on the loan as a personal recourse of 25 per cent. This meant the lenders would be personally liable for a quarter of the amount borrowed.
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A second letter shown to the court added a line which said that recourse could be to the value of the shares at the end of the loan period.
Mr McCluskey said that he believed that this change “created a situation where if the share price went to zero there was no recourse”.
He said he had been asked to sign the letters by his line manager in the bank, Michael O’Sullivan.
The letters were based on copies of the original July 10th letters but had hand written amendments.
After he refused to sign the letters, he said they were signed by the accused Pat Whelan and Mr O’Sullivan, who is not before the court.
Asked by prosecuting counsel Paul O’Higgins SC to describe his reaction to the second letter, the witness replied: “Initially refusal.”
“It was an instruction given to me by Michael. I voiced my discomfort to Michael. I had never met or dealt with the Maple Ten. When I read it in isolation I felt it was weakening the banks position.”
“Michael told me that he had been told by Pat that it had been agreed by CEO and the board of the bank. I said that’s ok but I basically refused to sign it”.
The prosecution allege that three former Anglo executives, Pat Whelan, William McAteer and chairman, Sean FitzPatrick, were involved in a plan by Anglo to loan money to the Quinn family and the so called Maple Ten group of investors so that they could buy shares in bank and guarantee the stability of the share price.
The three men have been charged at Dublin Circuit Criminal Court with 16 counts of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in the bank.
Mr Whelan has also been charged with being privy to the fraudulent alteration of loan facility letters to seven individuals in October 2008.
The court heard that Mr McCluskey said he believed that Mr O’Sullivan asked him to sign the amended loan letters in October 2008. Copies of the letters shown to the court are dated July 17th, 2008.
He said that his next dealing with the Maple Ten loans was in January 2009 when he said “rectification letters” were issued. Following a “high level review” of large loan facilities Mr O’Sullivan was uncomfortable, he said.
“I gave Michael back the written instruction that he had given me to issue the second facility letter. I had retained that as evidence that it was not something of either Michael’s or my creation,” said Mr McCluskey.
He said that letters issued in January 2009 set the recourse on the loans back to the original recourse set out in the first letter sent in July 2008.
Describing that initial process in early July of putting together the €600m loan facilities for Maple Ten, the witness said that it was unusual to prepare ten identical loan facility letters.