Former Anglo secretary unaware of Quinn transaction until completion

Anglo Irish Bank’s company secretary has said she didn’t become aware of the transaction by which businessman Seán Quinn’s stake in the bank was unwound until after it was completed.

Natasha Mercer, whose role involved taking minutes at the bank's board meetings, told the trial of three former Anglo directors that she was aware of an initial plan to try to place part of Mr Quinn's large stake, which he held through contracts for difference (CDF), with institutional investors.

Ms Mercer recalled a board meeting in Cork on June 27th, 2008, where directors discussed a plan to “dribble” Anglo shares into the market and was briefed on continuing efforts to find “strategic stakeholders”, including sovereign wealth funds.

Discussion
Asked by prosecuting counsel Úna Ní Raifeartaigh whether there was any discussion of how this was to be financed, the witness responded: "None whatsoever."

Ms Mercer said she had “no idea” when the plan turned into one involving individual investors.

She said the source of the board's information on the Quinn CFD position during the period in question in 2007- 2008 was then chief executive David Drumm.

Her personal knowledge of the contact between Anglo and the financial regulator came from reports to board by Mr Drumm.

Ms Mercer recalled that at a meeting on March 19th, 2008, Mr Drumm had said there was “a clean sheet” with the regulator.

Ms Mercer said that the first she became aware of the unwind deal and the loans – a transaction that was executed on July 14th – was in late July or early August, when she was informed by the head of compliance, Fiachre O’Neill.

Asked by Ms Ní Raifeartaigh what her thoughts were on hearing this, she said: “I wanted to make sure that whatever had been done had been done in compliance with the law.”

Ms Mercer said she was not aware, at the time they were written, that new loan facility letters were prepared for the so-called Maple 10 borrowers in October 2008 and backdated to the previous July.

Ms Mercer became aware of these letters only in January 2009.

Recourse
The witness said her understanding was that the letters changed the recourse from 25 per cent to zero, which would mean there was "a higher risk for the bank if the client were to default".

Ms Mercer told the court that in mid-2007, amid rumours about Mr Quinn having a CFD position in Anglo shares, the bank’s board sought advice as to what contracts for difference were and any disclosure obligations that might apply to them.

Cross-examined by defence counsel Ted Harding, for Willie McAteer, Ms Mercer said that from Companies Office documents shown to her in court, she believed Mr McAteer resigned as a director of the bank with effect from January 7th 2009.