Anglo directors sentence hearing today

The sentence hearing for two former directors of Anglo Irish Bank is due to take place this afternoon at the Dublin Circuit Criminal Court.

William McAteer (63) of Rathgar, Dublin, and Pat Whelan (52) of Malahide, Dublin, were found guilty earlier this month of providing unlawful loans to 10 property developers in July 2008 to buy shares in the bank, contrary to section 60 of the Companies Act.

McAteer and Whelan were found not guilty of six counts of providing unlawful financial assistance to six members of the Quinn family.

Former chairman of the bank Seán FitzPatrick (65) of Greystones, Co Wicklow, was acquitted of the same allegations brought against him. And additional charges against Whelan related to the fraudulent alteration of loan facility letters were dropped on the direction of the judge.

The case lasted 47 days and was the first time anyone was tried under section 60. It was also the first time an enlarged jury of 15 was used. The jury deliberated for almost 17 hours before reaching its verdict.

The trial centred on a deal to unwind businessman Sean Quinn’s holding in Anglo. The court had heard that by July 2008 Mr Quinn’s contracts for difference (CFDs) – investment products based on share price – were equivalent to more than 28 per cent of the bank’s shares.

This was a serious concern for the bank as it was feared if the CFDs were unwound in an uncontrolled manner it would have a negative effect on the bank’s share price.

A deal was devised which involved providing loans to 10 of the bank’s customers, known as the Maple 10, to buy just over 1 per cent each of the shares underlying the CFDs with six members of the Quinn family buying 15 per cent of the shares.

The Maple 10 borrowed €45 million each while the Quinns borrowed €169 million. The deal was executed on July 14th, 2008.

Neither McAteer nor Whelan gave evidence during their trial,but their interviews with gardaí were read in court.

Judge Martin Nolan had ruled in the course of the trial that legal advice given to the bank in connection with the loans was not relevant to the case. He also told the jury the level of involvement or knowledge of the financial regulator was irrelevant. But he indicated he could take these issues into consideration in sentencing.

The two men could face a maximum of five years in prison. It is unlikely that Judge Nolan will hand down a decision on sentence today.