Department wanted investors for Quinn stake

 

THE DEPARTMENT of Finance urged the Financial Regulator and the Central Bank last March to ensure that other investors were found to take up shares left by billionaire, Seán Quinn, because of fears that a large scale sell-off would threaten the stability of the now-nationalised bank.

In the Dáil, Minister for Finance Brian Lenihan said he had been briefed about Mr Quinn’s ownership of contracts for difference (CFD) linked to 25 per cent of the bank’s shares when he took up office in May.

Officials had told him that Mr Quinn’s CFD stake – which could have led to a flood of Anglo shares coming on the market at one time — was a “serious threat to the stability of the bank”.

Replying to Fine Gael’s Richard Bruton, he said: “The department had been in communication with the regulator and the Central Bank to ensure that this matter was unwound as soon as practicable. Beyond that, I was not furnished with any information of a written character about this issue, other than it was a critical issue for the share price of the institution.

“Subsequently, I was advised in late July that a group of investors had invested in Anglo Irish Bank to resolve these problems and that legal advice obtained by the bank indicated that the transaction was compliant,” he said.

The existence of a group of 10 so-far unidentified wealthy investors, which has been seized upon by the Opposition, was acknowledged to be a political problem last night by Fianna Fáil Ministers.

Minister for Justice Dermot Ahern last night supported calls for the 10 investors to be named: “I think it would be preferable if they were named ultimately.”

In the Dáil, Taoiseach Brian Cowen and Mr Lenihan have already said that they do not know the identities of the 10, while other Ministers have privately said the same.

It is unclear if the 10 could be named in any event, and there is a danger that Ireland’s stock with international markets will fall further if the State orders such disclosure. The investors almost certainly used nominee accounts to buy the shares, and they are, by law, allowed to keep their identities confidential if their holding is below 3 per cent.

The length of time being taken by the Director of Corporate Enforcement, Paul Appleby, and the Financial Regulator to inquire into all of the matters surrounding Anglo Irish is causing mounting frustration amongst Ministers.

“Ministers are unable to say certain things, because they will otherwise prejudice subsequent legal action. And, yet, we get hammered if we don’t call for people’s heads,” one Minister said last night.

Last night, the Department of Finance insisted that it had not been aware that Anglo had placed the shares privately with a group of 10 wealthy investors, or that it had given loans that were secured on the value of the shares.

The department referred to a statement issued on Tuesday by the Financial Regulator, where it pointed out that it had sought assurances from Anglo that “the unwinding of the Quinn CFD position was in full compliance with all legal requirements”.