Anglo tried to solve ‘imperfect and dangerous’ Quinn situation, says FitzPatrick

Drumm and Quinn had ‘difficult relationship’ after Maple transaction, trial told

 Former Anglo Irish Bank  chairman Seán FitzPatrick at Dublin Circuit Criminal Court yesterday. Photograph: Collins Courts

Former Anglo Irish Bank chairman Seán FitzPatrick at Dublin Circuit Criminal Court yesterday. Photograph: Collins Courts


Anglo Irish Bank was trying to “solve an imperfect and dangerous situation” when Seán Quinn’s holding in the bank was unwound in July 2008, the former chairman of the bank, Seá

n FitzPatrick, told gardaí.

Mr FitzPatrick said during interviews in March 2010 that he did not know if the deal to unwind the Quinn holding had helped to increase the share price in the bank, the Dublin Circuit Criminal Court heard.

“What we were trying to do was solve an imperfect and dangerous situation,” he said.

Mr Quinn had a large portion of contracts for difference (CFDs) – investment products based on share price – in the bank and the bank was concerned, Mr FitzPatrick had said.

Did not tell him
He also told gardaí he did not think it was strange that then chief executive of the bank David Drumm did not tell him the names of the Maple 10, the businessmen who borrowed money from the bank to buy shares as part of the unwind deal.

Mr FitzPatrick (65) of Greystones, Co Wicklow; William McAteer (63) of Rathgar, Dublin; and Pat Whelan (51) of Malahide, Co Dublin, have been charged with 16 counts of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in the bank, contrary to section 60 of the Companies Act.

Mr Whelan has also been charged with being privy to the fraudulent alteration of loan facility letters to seven individuals.

All three men have pleaded not guilty to the charges.

Mr FitzPatrick stood down as chief executive of Anglo in 2005 and became its chairman while Mr Drumm became chief executive.

An interview with gardaí on March 19th, 2010, was read into the record yesterday by Úna Ní Raifeartaigh SC, for the prosecution, and confirmed by Sgt Catharina Gunne of the Garda Bureau of Fraud Investigations. The interview was the last in a series read in court from questioning over two days at Bray Garda station.

Mr FitzPatrick told gardaí Mr Drumm told him the Maple 10 were “people of substance”. None of the 10 needed to know the identity of each other, he said, and Mr FitzPatrick didn’t need to know it either.

Asked by gardaí why he did not “overrule” Mr Drumm’s decision to withhold the names, he said Mr Drumm was chief executive and “he had to call it”.

Quinn holding
The Quinn holding had been discussed by the board for weeks and there had been attempts to resolve the position including trips to the Middle East to find institutional buyers for the shares underlying the holding.

“Suddenly” Mr Drumm had come up with a solution and wanted to keep things “tight”, Mr FitzPatrick told gardaí.

“Why would I then say how dare you? Why would I do that?” he asked. He also said he “wasn’t insulted” that Mr Drumm didn’t tell him.

He confirmed to gardaí he attended a meeting with Mr Quinn after the Maple transaction went through.

He said Mr Drumm and Mr Quinn had “a difficult relationship post the Maple transaction”.

Mr Quinn had written a letter to the bank complaining about the deal, the court had heard previously, and had threatened to take legal action against the bank.

Mr Drumm’s relationship with Mr Quinn was “at bottom line”.

Mr FitzPatrick told gardaí Mr Drumm thought he, Mr FitzPatrick, was the only person “able to talk to Mr Quinn”.

Gardaí suggested this meant Mr FitzPatrick did not “stick” to his non-executive role.

Biggest transaction
Mr FitzPatrick responded that the Maple deal was the biggest transaction undertaken by the bank and the bank needed someone to talk to Mr Quinn.

They had met before and they were “equivalent” in their companies, Mr FitzPatrick said, and it was “appropriate in the exceptional circumstances”.

He said he was there to “mend” rather than negotiate.

“My instructions were quite clear. Mend fences, do not negotiate,” he said.

Under cross-examination from Michael O’Higgins SC, Sgt Gunne confirmed that Mr FitzPatrick answered every question asked of him and fully co-operated.

Mr O’Higgins suggested there was a vagueness about statements made by other non-executive directors of the Anglo board.

The statements were a page and a half long. This contrasted Mr FitzPatrick’s approach. There were 100 pages of questions and answers from his interviews, he said.

Sgt Gunne responded that she had not been involved with the statements of other non-executive directors.

The case continues.