Regulator ‘very, very, very positive’ about Anglo share deal

Bank’s former head of compliance Brian Gillespie tells court of conversations about ‘Maple 10’ arrangement

Developer John McCabe told the court he asked “all the relevant questions” and was told the transaction was “totally legal”. Photograph: Collins

Developer John McCabe told the court he asked “all the relevant questions” and was told the transaction was “totally legal”. Photograph: Collins

Sat, Feb 15, 2014, 08:17

A high-ranking official at the Financial Regulator’s office was “very, very, very positive” about a plan for 10 wealthy clients to borrow up to €60 million from Anglo Irish Bank to buy the bank’s shares, Dublin Circuit Criminal Court has been told.

Brian Gillespie, who in 2008 was head of compliance (Ireland) at Anglo, told the trial of three former bank directors yesterday that he was tasked with helping ensure the mechanics of the so-called Maple 10 transaction were carried out efficiently in July 2008.

“Project Maple” was a code used to refer to the plan, which involved unwinding businessman Seán Quinn’s large contract for difference positions on Anglo shares partly by inviting 10 individuals to each buy 1 per cent of the bank’s shares.

Contracts for difference, the court previously heard, are investment products based on share price, and the size of Mr Quinn’s holdings was seen as destabilising the bank’s share price.

Mr Gillespie told the court that, on the weekend of July 12th-13th, 2008, he and colleagues Fiachre O’Neill and Matt Moran listened in on two conference calls involving representatives of the investment bank Morgan Stanley, who were executing the transaction.

One was between Morgan Stanley and Con Horan, prudential director at the Financial Regulator, and the other was between Morgan Stanley and Robert Heron of Matheson Ormsby Prentice Solicitors.

Mr Gillespie said it was his understanding the calls were part of Morgan Stanley’s “due diligence” process as it prepared to execute the transaction.


Tone of call
Asked by prosecuting counsel Úna Ní Raifeartaigh SC whether he formed any impression of the tone of the call between Morgan Stanley and the regulator, Mr Gillespie said Mr Horan was “very, very, very positive”.

Asked for his overall view of Mr Heron’s stance on the transaction, based on the phone call, Mr Gillespie said he was “pro”. As far as he understood, there was “no question” of Morgan Stanley being dissatisfied.

Seán FitzPatrick (65), William McAteer (63) and Pat Whelan (51) have been charged 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.

Mr FitzPatrick, of Greystones, Co Wicklow; Mr McAteer, of Rathgar, Dublin; and Mr Whelan, of Malahide, Dublin have pleaded not guilty to all charges.

The court also heard evidence from developer John McCabe, who said he had had dealings with Anglo since the late 1980s. Mr McCabe told the court that in July 2008 he received a call from Mr Whelan, who said he had a “proposition” to make and was anxious to see him. The next morning, Mr McCabe, accompanied by his son, met Mr Whelan and David Drumm, then Anglo’s chief executive, at the bank’s office on St Stephen’s Green in Dublin, the court heard.

The witness said Mr Drumm told him a “major investor” held 25 per cent of the bank’s shares and was only willing to redeem 15 per cent. “They were looking for four-five long-term clients at the bank to help in buying a portion of the 10 per cent. So they wanted me to buy 1 per cent,” Mr McCabe said.

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