Appleby wrote to Lenihan over bank inquiry

CORPORATE ENFORCEMENT director Paul Appleby sent letters to Minister for Finance Brian Lenihan and the board of Anglo Irish Bank after concern was expressed from both quarters about the pace of the inquiries into the bank’s affairs.

Mr Appleby is understood to have written the letters after Anglo non-executive director Alan Dukes, a Government-appointee on the board, expressed frustration on a radio programme at the speed of the inquiries. Speaking to reporters last month, Mr Lenihan referred to Mr Dukes’s remarks and said he shared that concern.

The exact tone and stance adopted by Mr Appleby, whose office is independent of the Government, is unclear, but sources said he emphasised he had to do his job properly and that it would take time.

While separate sources believe there may be no significant development in the inquiry until late this year or next year, Mr Appleby is said to have indicated in the correspondence that he has made substantial progress in his work.

In private correspondence with an Oireachtas committee last February, Mr Appleby said he had formed the view that the circumstances surrounding the concealment of directors’ loans at Anglo suggest “illegality”. He formed his view in spite of assertions by Anglo and a “former director” of the bank that the transfers did not breach banking or legal regulations, the correspondence said.

This was seen as an implicit reference to former Anglo chairman Seán FitzPatrick, whose resignation in December was the first in a series of events that led to its nationalisation.

Mr FitzPatrick’s loans, which on occasion exceeded €100 million, were routinely transferred to Irish Nationwide at the end of eight successive financial years in Anglo.

Mr Appleby’s investigation is in addition to Garda and other regulatory inquiries into the Anglo debacle, which culminated in the nationalisation of the bank last January.

Also under inquiry is the secretive placing last summer of a 10 per cent stake in Anglo to 10 clients who funded the transaction with non-recourse loans from the bank and the lodgement of multibillion euro deposits at the end of Anglo’s last fiscal year by Irish Life Permanent.

These affairs formed the backdrop to the departure of several non-executive directors after Mr FitzPatrick resigned and was followed by the chief executive, David Drumm. Anglo is expected to name Australian banker Mike Aynsley as Mr Drumm’s successor.