What happened in the Anglo trial yesterday?
Proceedings at a glance
Gerry Gannon outside Dublin Circuit Criminal Court yesterday. Photograph: Collins Courts.
- Michael O’Sullivan, former divisional lending director, Anglo Irish Bank
- Gerard Maguire, property developer
- Gerard Gannon, property developer
- Niall Tuite, former head of credit risk (Ireland and United States), Anglo Irish Bank
The trial heard that under internal Anglo procedures, loans in excess of €25 million had to be shown to a non-executive director for “noting”. But on a sample form related to one of the Maple 10 loans shown to the court, a box asking if a non-executive director needed to be informed was marked “N”. Under cross-examination by Michael O’Higgins , for Mr FitzPatrick, Michael O’Sullivan said it was because it was believed the board had already been informed of the “principle” in the documents and understood their “broad terms”.
Asked by prosecuting counsel Úna Ní Raifeartaigh who had made the decision on the Maple 10 loans, Mr O’Sullivan said: “The structure of the transaction was agreed elsewhere.” Did the credit committee decide, he was asked? “The decision had been taken by the board.”
Gerard Maguire was on holiday in the south of France when he received a call from Pat Whelan in July 2008. Mr Whelan told him Anglo’s share price was “under attack” and the bank needed his assistance to “inspire a bit of confidence” in the bank. The next day, Mr Whelan and Mr Drumm flew to Nice to meet Mr Maguire. At a meeting , the developer told the court, Mr Drumm said the bank would provide a loan facility of up to €60 million to Mr Maguire so that he could invest in the bank’s shares. Mr Maguire said he was told the financial regulator knew about the transaction and approved.
Gerard Gannon told the court he was approached by Anglo in July 2008 and invited to buy shares in the bank. Ms Ní Raifeartaigh showed the witness an internal Anglo memorandum from July 2008 which stated that “Gerry Gannon has approached us seeking a share dealing facility ”. “Did you approach the bank,” counsel asked. “No,” Mr Gannon replied.
Asked by counsel for Pat Whelan, Brendan Grehan , how he viewed Mr Whelan, Mr Gannon said: “I always found all people who worked in Anglo honest and truthful in the same way I’d like to think of myself.”
Niall Tuite said that on Christmas Eve 2008 he approached Pat Whelan and said he was “dissatisfied” after learning that the terms on the Maple 10 loans had been changed. “I indicated I wanted the issue elevated to the highest levels in the bank,” Mr Tuite said. Mr Whelan said he would speak to the executive chairman, Donal O’Connor. A short time later, Mr Whelan came to Mr Tuite’s office and told him the matter was in hand and he didn’t “need to worry about it any more ”. In January 2009, new facility letters were sent out which reinstated the original recourse terms.
Voices from the court
“An incredibly turbulent period for the bank” - Michael O’Sullivan on the period after September 30th, 2008 - the day of the Government’s bank guarantee
“I think they were more interested in getting business from me” - Gerard Gannon on his meeting with investment bankers Morgan Stanley about the set-up of his Anglo Irish Bank share-dealing facility
“Probably, yeah” - Mr Gannon’s response when asked by Mr Grehan whether his net worth in 2008 was “maybe a billion”