THE IDENTITY of the 10 investors who were given €300 million in loans by Anglo Irish Bank to support its share price last year has emerged as a key political issue with the Opposition intensifying pressure on the Government to justify the decision to nationalise the bank.
In the Dáil yesterday Taoiseach Brian Cowen denied that he or any of his Ministers knew the identity of the wealthy individuals whose debts of €300 million will have to be picked up by the taxpayer as a result of the Government’s decision to nationalise the bank.
Mr Cowen was asked by Fine Gael leader Enda Kenny for the dates on which he became aware of developments at Anglo Irish.
“Can he confirm that no member of his Cabinet was in any way involved in the decisions of a new golden circle? The Galway tent may be gone but its spirit seems to be alive and well,” said Mr Kenny.
The Taoiseach said that at a meeting last March with the Central Bank governor, when he was minister for finance, he was told about a situation in Anglo Irish involving Seán Quinn. “It was indicated at that time that the matter had been resolved. I had no indication and no involvement whatsoever in names of any description. That was not my function,” said Mr Cowen.
Replying to Labour Party leader Eamon Gilmore, Mr Cowen said as minister for finance he had become aware of “the large overhang of shares” in Anglo Irish “held by the Quinn group and related persons in the family”. This had emerged from contacts between the Department of Finance, the Central Bank governor and the Financial Regulator “over the course of last year”.
“This was considered by the bank and the markets to be a source of instability and the institution was seeking a resolution of the issue. The details of this were a matter for Anglo Irish Bank and, as appropriate, the Financial Regulator,” said Mr Cowen.
He said his successor as Minister for Finance, Brian Lenihan, was advised in late July 2008 “that a number of investors had invested in Anglo Irish Bank but the Minister was not advised of who the individuals were or the nature of the transaction”.
He said as a result of due diligence recently undertaken on behalf of the Minister, certain matters in connection with transactions involving the Quinn stake in Anglo Irish, and related loans to the bank’s customers for the purchase of shares, had come to the attention of the Minister.
These were now being investigated by the various regulatory bodies, including the regulator and the Office of the Director of Corporate Enforcement.
Mr Kenny last night claimed Mr Cowen had still not answered key questions about Anglo Irish.
He said the three crucial questions were: On what date did the Taoiseach find out about the transfer of funds between Irish Life and Permanent and Anglo-Irish? Did Ministers in the Taoiseach’s Cabinet encourage or support the special €300 million deal with select customers of the bank and “what is the identity of these ‘golden circle’ members?”
Mr Kenny said that at every stage of the Anglo Irish debacle the Taoiseach had been slow to reveal the inner workings of what was a grossly dysfunctional financial institution.
It emerged last night that Anglo Irish has decided not to pursue the 10 investors for the €75 million in security they offered for the €300 million in loans from the bank, because of legal problems with the loan agreement. The bank will confirm it has written off the loans in its annual report, to be published on Friday.
Irish Nationwide became the fourth guaranteed Irish lender to lose a chairman or chief executive in less than three months, as the building societys chairman, Dr Michael Walsh, resigned unexpectedly yesterday evening.
The Government said it had not received an explanation for Dr Walshs departure from Irish Nationwide which has been embroiled in the controversy over hidden loans to former Anglo Irish chairman Seán FitzPatrick.
In the Dáil last night Mr Lenihan confirmed that Bank of Ireland chief executive Brian Goggin will step down within the next three weeks, earlier than his planned departure this summer.