Anglo thought its problems were more ‘Ireland Inc’ than internal

Regulator asked bank to release Quinn Group from guarantee

On his second day in the witness box, Con Horan, then prudential director at the financial regulator’s office, said the main thrust of a meeting on April 30th held in his office with officials from Anglo was to discuss how the bank might mitigate future problems following a “mini-run” on it in March.

On his second day in the witness box, Con Horan, then prudential director at the financial regulator’s office, said the main thrust of a meeting on April 30th held in his office with officials from Anglo was to discuss how the bank might mitigate future problems following a “mini-run” on it in March.

Tue, Mar 11, 2014, 14:01

In April 2008, Anglo Irish Bank did not believe it was “like Northern Rock” but believed its problems were “more an Ireland Inc problem than an Anglo problem”, an official from the financial regulator’s office told the trial of three former directors of the bank this morning.

On his second day in the witness box, Con Horan, then prudential director at the financial regulator’s office, said the main thrust of a meeting on April 30th held in his office with officials from Anglo was to discuss how the bank might mitigate future problems following a “mini-run” on it in March.

However, Brendan Grehan SC, for Pat Whelan, said that a previous witness, bank director Anne Heraty, had said the bank was asked to release Quinn Group from a guarantee at that meeting.

Mr Horan responded that he did not recall, but it did not surprise him. The board of the Irish Financial Services Regulatory Authority (Ifsra) had asked him to encourage the bank to release the guarantee.

The court had heard the guarantee from Quinn Group held by the bank was of concern to auditors in the Spring of 2008 and annual accounts could not be signed off because of it.

Seán 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.

Mr Grehan told the court that minutes of an Ifsra board meeting in April showed there was discussion of the Quinn guarantee and the delay in signing off the accounts.

Mr Horan said the board was keen to see if the issue could be resolved and asked him to meet with Anglo and ask the bank about about lifting the guarantee.

Mr Horan acknowledged that as a regulator “you wouldn’t want the bank releasing securities unless you felt the consequences would be worse for the bank”. He said the concern was a liquidator might be appointed to the Quinn Group at that point and this could lead to a “disorderly unwind” of Sean Quinn’s holdings in Anglo.

At the same meeting, the Ifsra board were informed that an unwinding of Mr Quinn’s holding planned in March had not happened, the court heard.

Mr Horan agreed he was asked by the board to speak to the Department of Finance and the Central Bank “to see if some domestic solution” could be found.

He also confirmed that the regulator’s office took legal advice on issues of transparency related to the Quinn holding.

The case continues.