Quinn paid ‘a very high price’ for investing in Anglo
Trial of Anglo Irish Bank executive hears Financial Regulator ‘supported’ plan to protect share price
The trial of three former Anglo Irish Bank directors has heard that the Financial Regulator supported the bank’s allegedly illegal plan to protect its share price.
Former Quinn Group chief executive Liam McCaffrey continued his evidence, telling the jury that Sean Quinn was forced to agree to Anglo’s plan for him to sell his control over 29.3 per cent of the bank’s shares.
Dublin Circuit Criminal Court heard that Mr Quinn was forced to borrow €1.975 billion from Anglo in order to fund these CFDs between November 2007 and July 2008.
Mr Quinn told Anglo directors in September 2007 that he controlled 24 per cent of the shares and that this caused the bank’s chief executive David Drumm and chairman Seán FitzPatrick to be very concerned.
It today emerged that Mr Quinn continued to increase his CFD stake to 29.3 per cent over the next seven months before being forced to sell them.
The witness also confirmed that Mr Quinn had to pay a record fine of around €3.5 million to the Financial Regulator because of improper intercompany loans which he used to fund the CFDs.
During a meeting with the Regulator, Mr Quinn admitted that he had been greedy and, speaking in the third person, said: “Seán Quinn needed to be reigned in.”
Four witnesses have now given evidence out of an expected 103.
Mr Quinn will be giving evidence on Monday morning when the trial resumes. Counsel expects his evidence to a considerable amount of time.
The prosecution allege that the accused, Pat Whelan, William McAteer and Seán 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 DPP say that this is an offence under the 1963 Companies Act and the accused, as directors, either took part in it or permitted it to go ahead.
The three men have been charged with 16 counts of providing unlawful financial assistance to 16 individuals to buy shares in the bank. Each charge relates to a specific person, who allegedly received loans between July 10th and July 30th, 2008.
Mr Whelan also faces seven charges of being privy to the fraudulent alteration of loan facility letters to seven individuals in October 2008.
Today, Mr McCaffrey said that in February 2008 the Financial Regulator was unhappy with certain practices by the Quinn Group designed to fund the CFDs.
During the meeting, Mr Quinn “apologised sincerely for the current financial situation in Quinn Insurance Ltd” and for “the problems it was creating for the Financial Regulator”.
The businessman told representatives from the regulator that he had been “greedy” with regard to the CFDs and “needed to be reined in.”