At a glance: Day 11 of the Anglo trial

Unseen side letter a concern to Moran

Witness Matt Moran at court yesterday where he gave evidence. Photograph: Collins Courts

Witness Matt Moran at court yesterday where he gave evidence. Photograph: Collins Courts


Matt Moran, former chief financial officer, Anglo Irish Bank


Mr Moran told the court that on July 10th, 2008 – a number of days before the execution of the Maple 10 transaction, aimed at unwinding businessman Seán Quinn’s contracts for difference stake in the bank – he went to Pat Whelan over concerns that a “side letter” for the loan agreement would be put in place. “I thought a side letter in this instance was inappropriate,” Mr Moran said. He said he never saw any side letter himself.

Asked what aspect he was concerned about, Mr Moran said: “If the recourse element of the transaction was not to be in place because of the side letter, that would be inappropriate.” He continued: “What I was told was that a side letter would take away the 25 per cent recourse.”

The trial has previously heard that the loans of up to €60 million each to the Maple 10 borrowers was at a 25 per cent recourse, meaning that the borrowers would be personally liable for a quarter of the amount borrowed.

Mr Moran said he told Mr Whelan that a side letter which took away the 25 per cent personal recourse did not seem “appropriate” in “this type of instance”. Mr Whelan said it “wouldn’t be done” and he “gave me assurance of that”, he added.

On the weekend of July 12th-13th, 2008, the court heard, a conference call took place between the investment bank Morgan Stanley, who were executing the transaction, and Con Horan from the financial regulator’s office.

A number of Anglo officials, including Mr Moran, dialled in as well. Mr Moran told the court he understood Morgan Stanley wanted to know that the regulator was raising no concerns about the transaction. Among the issues raised on the call was that the bank would be lending to the share-buyers.

Asked by Paul O’Higgins SC, prosecuting, whether he met Se án FitzPatrick during or after the transaction, Mr Moran said that a short time after the transaction, Mr FitzPatrick visited his office. “He asked me about the transaction. He asked, as if thinking out loud, ‘I wonder was that a right transaction to do?’, specifically in respect of the recourse to the 10 borrowers . . . He made a comment that he regretted he didn’t become more personally involved in this issue than he had done.” Mr Moran said Mr FitzPatrick “questioned whether the 25 per cent was enough ”.

The court was shown an email dated August 11th, 2008, sent by Mary Burke, head of banking supervision at the financial regulator’s office, to Willie McAteer.

Part of the email read: “I would point out that the financial regulator did not advise as to whether the transaction required its approval, nor was it in a position to do so given the information available to it.” Mr Moran said he believed the email, sent about a month after the transaction, seemed to show that the regulator’s office was resiling from its “knowledge and involvement with the transaction”.