Anglo Irish directors told of Seán FitzPatrick loans in 2008, court hears

Borrowings of former bank chairman and family trebled directors’ loan total in a year

Frank Daly: appointed public interest director at Anglo Irish Bank  in December 2008. Photograph: Alan Betson

Frank Daly: appointed public interest director at Anglo Irish Bank in December 2008. Photograph: Alan Betson

 

Former Anglo Irish Bank chairman Seán FitzPatrick told some of the bank’s directors that borrowings by him were largely responsible for the near trebling of directors’ loans at the institution to some €120 million in the space of a year.

Frank Daly, who retired as chairman of the Office of the Revenue Commissioners in March 2008 and is now Nama chairman, told Dublin Circuit Criminal Court that he and Alan Dukes were nominated as public interest directors at the bank in December 2008.

He said Mr FitzPatrick, who is on trial accused of failing to disclose loans to the bank’s auditors, asked them to a meeting on December 16th, 2008.

Mr FitzPatrick told them accounts being prepared for publication would show that directors’ loans had increased from €41 million in September 2007 to some €120 million for the financial year ending September 2008.

Mr Daly told the court Mr FitzPatrick had said most of the increase to that sum was down to loans to himself. Mr Daly said the accused described how he would temporarily move the loans out to other banks. Loans taken out by Mr FitzPatrick (68), his wife and family members increased from about €10 million in 2002 to €103 million in 2007, the trial has heard.

Mr FitzPatrick, of Whitshed Road, Greystones, Co Wicklow, has pleaded not guilty to 27 offences under the 1990 Companies Act. These include 22 charges of making a misleading, false or deceptive statement to auditors and five charges of furnishing false information in the years 2002-2007.

The prosecution alleges the amount of the loans was “artificially reduced” for a period of two weeks around the bank’s financial end-of-year statement by short-term loans from other sources, including Irish Nationwide Building Society.

Ned Sullivan told the jury that he served as a non-executive director on the Anglo board from 2001 to January 2009. His role differed from that of an executive director in that he was not employed by the bank.

From mid-2002 to mid-2007, Mr Sullivan served on the bank’s audit committee. He told John Byrne, prosecuting, that he understood that any loans made to directors of the bank were made in the normal course of business and on the same commercial terms as any other lending.

Mr Sullivan said he first became aware of the extent of the loans to the accused at a meeting on December 16th, 2008. He said Mr FitzPatrick told him about the size of his borrowings and the annual temporary transfer arrangement in place with Irish Nationwide.

The trial continues before Judge John Aylmer and a jury.