FitzPatrick and Drumm to go before disciplinary tribunal

Tue, Dec 21, 2010, 00:00

ANGLO IRISH Bank’s former chairman Seán FitzPatrick and former chief executive David Drumm are to face a disciplinary tribunal of their accountancy profession early in the new year.

Their appearance before a tribunal to be established by the Chartered Accountants Regulatory Board will be the first time anyone from the failed bank has faced the possibility of sanctions. The tribunal can impose fines of up to €30,000 and dismiss people from the profession.

The board issued a statement yesterday saying its special investigator, the former comptroller and auditor general John Purcell, had found the men had “prima facie” cases to answer in relation to controversial transactions at the bank.

The transactions include ones that are the subject of a Garda file expected to go to the Director of Public Prosecutions shortly. Mr Purcell has also told the board the bank’s former finance director, Willie McAteer, has a prima facie case to answer in relation to matters including “the appropriate disclosure of a loan made by Anglo Irish Bank to him in September 2008”.

This is a reference to an €8 million loan given to him in 2008 that was initially backed solely by shares in the bank. At the time, the value of the shares was falling. The terms of the loan were later changed to give the bank full recourse.

Sources have told The Irish Timesthat Mr McAteer had a loan from the Bank of Ireland backed by Mr McAteer’s 3.5 million Anglo shares. As the loans were falling in value there was a possibility Mr McAteer’s Anglo shares might be sold to assist the repayment of his debt to Bank of Ireland. Anglo made the loan to prevent the shares of the bank’s finance director being sold in the market – and the sale publicly disclosed to the stock market – at a critical time for the bank during the crisis. The shares have since lost all their value.

Mr Purcell said Mr FitzPatrick and Mr Drumm have prima facie cases to answer in relation to the provision of the loan to Mr McAteer.

Mr Drumm also has a case to answer in relation to the provision of loans to four key management personnel, according to Mr Purcell.

The three former bankers also have cases to answer in relation to the temporary transfer of Mr FitzPatrick’s loans out of the bank at the year’s end so they would not appear in the bank’s books as well as in relation to transfers with Irish Life and Permanent which again involved distorting the bank’s books. Peter Fitzpatrick, the former finance director of Irish Life, also has a prima facie case to answer, Mr Purcell decided.