Browne's knowledgeof Quinn stake key to action

WHAT FORMER Anglo Irish Bank head of lending Tom Browne knew about the stake in the bank built up by businessman Seán Quinn lies at the heart of a €50 million action by the bank against its former executive, the Commercial Court heard yesterday.

Mr Browne wants to see a particular document over which Anglo claims legal privilege. He believes it may support his claim that Anglo directors withheld information from him related to contracts for difference built up by Mr Quinn in the bank, Michael P O’Higgins SC, for Mr Browne, said.

The issue arose when Mr Justice Peter Charleton was dealing with pre-trial matters in the bank’s action against Mr Browne, of Ferney Hill, Brighton Road Foxrock, Dublin, for a €50 million judgment against him over unpaid loans.

Mr Browne, head of lending at the bank between 2005 and 2007, claims he has no liability on grounds including that, when the loans were provided to him, the bank was allegedly aware the interest acquired by Seán Quinn in the bank was such as to undermine its stability and to render his shareholding valueless.

Had he known of such matters, he would never have exercised his share options in late November 2007 or held on to shares that became “worthless”, he says.

Yesterday, Mr O’Higgins said Mr Browne wants to see a two-page document referred to as Appendix 9, the last of nine appendices to a January 2009 28-page internal bank report that reviewed the bank’s relationship with the Quinn Group.

Mr Browne believes Appendix 9 sets out details of what occurred at a September 2007 dinner of Anglo directors at Heritage House, the headquarters of Anglo at St Stephen’s Green, Dublin, the court heard. That meeting was held shortly after Mr Quinn informed Anglo of a 24 per cent stake held in the bank via contracts for difference.

Mr Browne believes Appendix 9 is probably relevant to the extent to which members of the Anglo board were informed of the contracts for difference positions held by Mr Quinn, Mr Browne’s solicitor Jacqueline Cross said in an affidavit.

Some details of the September 2007 Heritage House meeting were set out in the book Anglo Republic by Irish Times journalist Simon Carswell, Ms Cross said. This information, given Mr Carswell’s “unparalleled access” to Anglo records, was particularly useful, and stated that directors had discussed whether to tell Mr Browne, who was resigning from Anglo, about the Seán Quinn stake. It was concluded Mr Browne should not be told.

Mr Browne believed that document was likely to refer to a decision not to tell Mr Browne about the Quinn contracts for difference, Mr O’Higgins said.

Paul Gardiner SC, for Anglo, said it had been accepted in other proceedings that Appendix 9 was a legally privileged document, but, while not waiving that privilege, Anglo was prepared to provide the document to Mr Browne if the court so ordered.

Mr Justice Charleton remarked it did not seem to him the court could order the bank to produce a privileged document.

After discussions between the sides outside court, Mr O’Higgins said he was not seeking a ruling at this stage from the court on whether the document was privileged.

The case has been adjourned to next month for further directions.