Regulator denies knowledge of Anglo share deal

 

The office of the financial regulator today rejected a claim that it was aware of any deal relating to the purchase of Anglo Irish Bank shares in 2008.

In a statement this afternoon the financial regulator said it “categorically rejects the claim that it was aware of any so called 'sweetheart deal' relating to the purchase of Anglo Irish Bank shares in 2008.

The regulator’s statement relates to an article in today’s Sunday Timesnewspaper which suggests that officials working for the regulator knew in advance about a secret share deal arranged by Anglo Irish Bank last summer that has since exposed taxpayers to a potential loss of €300 million.

It has been reported that a so-called 'golden circle' of 10 investors had been assembled by Anglo to buy a 10 per cent stake in the bank, part of a holding that had been acquired by businessman Sean Quinn. It is claimed this was to avoid the shares being dumped on the market and collapsing the share price.

The regulator’s statement said: “While the financial regulator and other authorities were aware of a large CFD (contracts for difference) position held in Anglo Irish Bank shares in 2008 and steps being taken to have it unwound, the primary concern of the financial regulator related to the security of deposit holders with Anglo Irish Bank and any stability issues that might arise from the unwinding of this position.

“The financial regulator was not aware of the identity or the financing arrangements of a so called 'golden circle' of ten investors.

“These details emerged during the due diligence process carried out in the lead up to the nationalisation of Anglo Irish Bank,” the statement added.

The regulator said it is investigating all aspects of the unwinding of the CFD position in Anglo shares and is working closely with the Office of the Director of Corporate Enforcement (ODCE) on the issue.

Fine Gael leader Enda Kenny called on the board of the Financial Regulator to resign as part of what he described as a "series of confidence-building measures for Irish banking".

Mr Kenny said there was a "growing sense" the Financial Regulator's office was "aware of, and turned a blind eye to, the presentation of deceitful accounts by Anglo on foot of the Irish Life & Permanent/Anglo transfer back in September".

Speaking in Cork at a selection convention for Fine Gael candidates for the European Parliament elections in June, Mr Kenny said trust and confidence were "the cornerstones of a properly functioning banking system".

"Both domestically and internationally that trust has been destroyed. That is because of reckless banking practices, ineffective regulatory oversight and basic political incompetence at Governmental level.

"Last week in the Dáil I said that the Minister for Finance should resign when he revealed that he hadn't read the PricewaterhouseCoopers report [into Anglo Irish Bank] and displayed a level of incompetence that only feeds the lack of trust in our response to this crisis," Mr Kenny added.

"Faced with a crying need to restore that confidence to our system, and not because of any one individual's wrongdoings, I believe the board of the Regulator and senior management should resign in light of their collective failure to deal correctly with these issues.

"It is not feasible for an investigation of this whole affair to be conducted by the body that was at the heart of the problem. The Office of the Director of Corporate Enforcement should complete urgently a joint investigation in to this matter, backed up by technical experts from the Financial Regulator's office. Because of the central role of the Minister for Finance in the banking crisis, the investigation I am proposing should report in the first instance to a committee of the Dáil rather than to the Government."