Cowen says he doesn't know Anglo 'golden circle' names

Taoiseach Brian Cowen has told the Dáil he does not know the names of a “golden circle” of investors who were loaned a total …

Taoiseach Brian Cowen has told the Dáil he does not know the names of a “golden circle” of investors who were loaned a total of €300 million by Anglo Irish Bank to buy its own shares.

Responding to Opposition party leaders in the House this afternoon, Mr Cowen said he was “telling you the truth and the whole truth”.

The Financial Regulator confirmed this week it is investigating the loans given by Anglo to 10 unnamed clients last year so they could take a 10 per cent stake in the bank that was originally part of a holding assembled by businessman Seán Quinn and his family.

The State’s financial watchdog on Sunday confirmed it was aware of the issue before the bank was nationalised earlier in the month. In a statement, it said details emerged during a formal evaluation process that led up to the State taking over the bank.

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The regulator said it is investigating the loans, but denied it was aware of any “sweetheart deal” between the bank and borrowers. All aspects of the loans were being investigated to pursue and assist “in whatever action is necessary, including appropriate legal proceedings”.

The deal was designed to stop the stock being sold on the market and inflicting further damage on Anglo’s share price, which plummeted throughout 2008. Mr Quinn built his 25 per cent interest in Anglo through contracts for difference (CFDs), high-risk instruments that allow investors to own shares indirectly at a fraction of their price and bet on them increasing or decreasing in value.

Mr Cowen said today: “I want to make it very clear I don’t know the names of any of the people involved in this process, nor is it my function

“In relation to this matter, as Minister for Finance… it was clear it was a meeting perhaps in March when the Governor would indicate to me that there was a situation developing in relation to the contracts for difference issue in Anglo Irish Bank,” Mr Cowen added.

“That had to be dealt with by Anglo Irish Bank, Anglo Irish Bank proceeded with that and …Mr Quinn made a statement on the 30th of July relating to it. It was indicated at that time that the matter had been resolved and I had no indication and no involvement whatsoever in names of any description. That was not my function. Nor do I have available to me what the present investigation being undertaken by the Financial Regulator and the Director of Corporate enforcement presently is”.

Fine Gael leader Enda Kenny said people were “absolutely disgusted, disgusted beyond any reason, at what is going on” within the banking system.

“It leads one to believe that if this goes on for much longer then this country really does face a crisis in our economy the likes of which we have never seen before.

“And there is no response of any coherence or any direction or any strength from Government to deal with it. People are frankly appalled at what has gone on.”