What the judge said

Judge Martin Nolan’s comments at the sentence hearing of William McAteer and Pat Whelan

Court 19 at the at the Dublin Central Criminal Court, where the Anglo trial took place. Photograph: Cyril Byrne / THE IRISH TIMES

Court 19 at the at the Dublin Central Criminal Court, where the Anglo trial took place. Photograph: Cyril Byrne / THE IRISH TIMES

Wed, Apr 30, 2014, 14:12

Good afternoon. Mr McAteer and Mr Whelan, after a long trial, have been found guilty by a jury of their peers of 10 counts of breaches of section 60. So, they stand before you now to be sentenced on these counts. First of all may I thank Superintendent Keogh for a very fine rendition of the facts this morning. I feel I don’t need to say much about the facts. They have been gone into in huge detail on a number of occasions. So, I’m grateful to Mr O’Higgins for leading Superintendent Keogh through the facts in a very good way.

The two defendants have been found guilty of the offence of contravening section 60. Now, section 60 is a particular type of offence and in the course of the trial I’ve had to interpret what is the true purpose or one of the true purposes of section 60. I have come to the view that one of the purposes of section 60 is to prevent a company, in this case Anglo Irish Bank, investing or buying their own shares literally or affording finance to third parties to buy their own shares.

In this case, for particular reasons, the bank afforded approximately €430 million to 10 third parties to buy their shares. The explicit purpose of these loans were to stabilise the share price of Anglo Irish Bank. It was feared within the bank that if the share price was not stabilised the bank could literally go down, and I also think there was a certain fear among the bank higher executives, and probably the Regulator, that this would have a disastrous effect on the overall financial health of the banking system of Ireland. But it seems to me from the facts as disclosed this was a blatant affront to section 60, no matter what the motivation was and no matter what the necessity was perceived.

Now, it seems to me that both men were directors of the bank, executive directors. They had an obligation to make sure that the bank behaved in a lawful manner. This they signally failed to do. It seems to me both of the defendants knew of the situation and it seems to me they had a duty to stop the scheme. The scheme, as I indicated previously, in my view was an affront to section 60 and it seems to me it should have been stopped.

To deal with both defendants justly I’ve had to come to certain conclusions of why they did not act in this case. It seems to me I must make certain findings of fact in relation to the matter and I’ve come to the following findings of fact. I have come to the first finding of fact I’ve come to is that the serious problem that the scheme in question sought to remedy was not caused by the defendants, or indeed by Anglo Irish Bank, but by Seán Quinn’s “Investment strategy” in Anglo. I’ve also come to the conclusion that David Drumm was the instigator and author of the scheme in question, that is the lending to the 10 individuals, and it seems to me that both of the defendants in this case played their part in the execution of the scheme.

Mr Whelan was intimately involved for it seems to me he knew all of the proposed borrowers and he introduced these borrowers to Mr Drumm and he obviously brought the paperwork with him. Now, Mr McAteer was also aware of the scheme. It seems he briefed both Mr Moran and Mr Fiachre O’Neill, two people responsible to him, and directed them to assist in the execution of this scheme. So, both of them knew of the scheme and both of them played their part in the execution of the scheme.

Now, the third issue I’ve had to come to some conclusion on is the role of the Regulator. I’ve heard evidence from Mr Horan and Mr Neary. I must say that Mr Horan did his best. He was candid with the Court I think and his memory was reasonably good. It seems to me Mr Horan was there to do the duty of the State and it seems to me the situation that Anglo found themselves in frightened and probably disturbed Mr Horan and it seems to me that he was very anxious that Anglo sort the situation out. I have come to the conclusion that particularly Mr David Drumm kept the Regulator in general he kept them informed of the general situations in relation to the problems, and it seems to me I can accept that Mr Drumm was also in contact with Mr Neary. Mr Neary seems to have limited recall. He seems to have difficulty in recalling vital events but it seems he knew of the general situation and I have no doubt betrayed to Mr Drumm his anxiousness about the situation and his hope that the Quinn situation would be resolved.