Regulator’s role in Anglo-Quinn share deal had degree of ‘plausible deniability’

Anglo former chief financial officer Matt Moran says regulator was ‘involved on two fronts’ with Quinns

Matt Moran, former chief financial officer with Anglo Irish Bank, outside Dublin Circuit Criminal Court yesterday. Photograph: Collins Courts.

Matt Moran, former chief financial officer with Anglo Irish Bank, outside Dublin Circuit Criminal Court yesterday. Photograph: Collins Courts.

Sat, Feb 22, 2014, 01:00

There was an element of “plausible deniability” about the financial regulator’s involvement in an Anglo Irish Bank-Quinn share deal, the trial of three directors from the bank heard yesterday.

Matt Moran, former chief financial officer with the bank, agreed with Michael O’Higgins SC, for Seán FitzPatrick, that there did seem to be plausible deniability on the regulator’s part in relation to a deal made between the bank and Seán Quinn in March 2008.

This deal would unwind Mr Quinn’s 29 per cent interest in the bank’s shares, partly by having an institutional investor purchase the stock, but it did not ultimately go ahead.

The court had been told of contacts between the financial regulator and Anglo in relation to the deal.

Mr O’Higgins asked Mr Moran if “there was a touch of ‘Yes, Minister’ going on here”.

“It’s difficult for me to comment on that remark,” Mr Moran responded.

“Have you ever heard the phrase ‘plausible deniability’?” Mr O’Higgins asked. He explained this meant being “involved and controlling” something in some shape or form “but not appearing to be above the water line” and, if questions were asked later, involvement could be plausibly denied.

“That’s the flavour of what’s happening here?” he suggested.

“That does appear to be the case,” Mr Moran responded.

Mr FitzPatrick (65) of Greystones, Co Wicklow; Willie McAteer (63) of Rathgar, Dublin; and Pat Whelan (51) of Malahide, Dublin, have been charged with 16 counts of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in the bank, contrary to section 60 of the Companies Act.

Mr Whelan has also been charged with being privy to the fraudulent alteration of loan facility letters to seven individuals. All three men have pleaded not guilty to the charges.

Heron’s role
Mr O’Higgins asked who Mr Moran believed Matheson Ormsby Prentice solicitor Robert Heron was acting for during the Anglo-Quinn deal.

Mr Moran responded that Mr Heron was to “sit in the middle” between the Quinn Group and the bank.

He did not know first-hand who made that proposal, the court heard.

Mr O’Higgins asked if Mr Moran had ever known circumstances where “two significant entities” shared a solicitor.

“Ever done business like that before?” he asked.

“No, I haven’t,” Mr Moran responded.

Mr Moran agreed that the regulator was “involved on two fronts” in 2008 with the Quinns in relation to Quinn Insurance and also with the bank in relation to Mr Quinn’s contracts for difference (CFDs), investment products based on share value.

He also confirmed that, as part of the March deal between Anglo and the Quinns, it was agreed that the CFD deposit, repayable from CFD providers once the holdings were unwound, would not go back to the bank but would go into Quinn Insurance instead.