Irish Nationwide denies impropriety in repeated loans to FitzPatrick

 

CONTROVERSIAL LOANS:IRISH NATIONWIDE Building Society (INBS) last night denied any impropriety in the loans for €87 million it repeatedly gave to former Anglo Irish Bank chairman Seán FitzPatrick to enable him to hide his own Anglo Irish loans for that amount from the bank’s shareholders.

After Anglo chief executive David Drumm left the bank on foot of Mr FitzPatrick’s resignation, INBS said the loans it gave Mr FitzPatrick were part of its “ordinary” business.

INBS was responding to a series of questions submitted to the institution itself and to its chief executive Michael Fingleton, chairman Michael Walsh and vice-chairman Terence Cooney.

Asked whether any senior management or board figure in INBS engaged in similar transactions with Anglo, an INBS spokesman said: “There was no reciprocal arrangement with regard to either members of the board or management of Irish Nationwide.”

In response to seven other questions, he said: “There was no impropriety whatsoever on the part of Irish Nationwide in relation to the granting of these facilities, which were dealt with in the ordinary course of business.”

The spokesman said initially that questions about the loans INBS gave to Mr FitzPatrick were exclusively a matter for him and for Anglo.

Mr FitzPatrick stepped down after the regulators initiated an inquiry into his use of INBS loans to take his Anglo loans off the bank’s books at the end of the eight financial years to 2007.

In so doing, Mr FitzPatrick and Anglo were able to avoid publication of the loans in successive annual reports. Mr FitzPatrick and Anglo both now say this practice was “inappropriate” from a transparency point of view.

The questions submitted to INBS were:

Who in INBS sanctioned the loans that Seán FitzPatrick temporarily transferred from Anglo Irish Bank? Why did INBS sanction the loans?

Were the loans sanctioned with the approval of Mr Fingleton? Were they approved with the approval of Mr Walsh or Mr Cooney? Were they approved by the INBS credit committee? Did the loans fall into any special category in which specific board approval was required?

What does the INBS and its top management and board say to the suggestion that INBS inflated its own profits by granting loans of this nature to Mr FitzPatrick?

What does the INBS and its top management and board say to the suggestion that INBS facilitated improper transactions in this case which have tarnished the reputation of Irish banking and Irish business in general?

Did INBS’s internal or external auditors ever question the granting of such loans to Mr FitzPatrick? Were the internal or external auditors ever made aware of these loans? If not, did they uncover the loans themselves at any point?

What does INBS and its top management and board say to INBS members who fear that these loans have tarnished the standing of their own institution?

Is the INBS under investigation by the Financial Regulator in relation to these loans or any other transactions on its loan book?