Drumm ‘driving’ deal to unwind Quinn holding, FitzPatrick said

Former chairman of Anglo did not know identity of Maple 10 until six months later

Former Anglo Irish Bank chairman Sean Fitzpatrick at Dublin Circuit Criminal Court today. Photograph:  Collins Courts

Former Anglo Irish Bank chairman Sean Fitzpatrick at Dublin Circuit Criminal Court today. Photograph: Collins Courts


Sean FitzPatrick, former chairman of Anglo Irish Bank, told gardaí he had been “bowing out” of his involvement with the unwind of Sean Quinn’s holdings in the bank before the deal was finalised in July 2008, the Dublin Circuit Criminal Court was told this morning.

In Garda interviews with Mr FitzPatrick on March 18th 2010, the former chairman said former chief executive of the bank, David Drumm, was “driving” the deal by late March.

Mr FitzPatrick told gardaí he was in the South of France when he got a call from Mr Drumm on July 9th to tell him they were going to “solve the problem” of Mr Quinn’s holdings in the bank.

By then, Mr Quinn had contracts for difference – investment products based on share price – to the value of more than 28 per cent of the bank’s shares.

Mr FitzPatrick told gardaí Mr Drumm said 10 of the bank’s customers were going to take 10 per cent of the CFDs from Mr Quinn.

He said he asked who the customers were and was told he “didn’t need to know” and they didn’t know each other.

Mr FitzPatrick said he asked Mr Drumm if it was ok and the chief executive responded the bank was being advised by investment bank Morgan Stanley and the Irish Financial Services Regulatory Authority would “be very happy”.

Mr FitzPatrick (65) of Greystones, Co Wicklow; William McAteer (63) of Rathgar, Dublin; and Pat Whelan (51) of Malahide, Dublin, have been charged with 16 counts of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in the bank, contrary to section 60 of the Companies Act.

Mr Whelan has also been charged with being privy to the fraudulent alteration of loan facility letters to seven individuals.

All three men have pleaded not guilty to the charges.

Úna Ní Raifeartaigh SC, for the prosecution, read three Garda interviews with Mr FitzPatrick, all undertaken on March 18th, into the record in court this morning.

Mr FitzPatrick told gardaí when he got the news of the deal he asked if the investors were “people of substance”.

He said he wanted to know if they could afford it or if Mr Drumm was “just taking 10 names” that they could “just put at the bottom of credit” and “they’d never pay it back if things went wrong”.

Mr FitzPatrick said he was told no, they were people of substance.

Gardaí asked Mr FitzPatrick if Mr Drumm had told him he’d informed the financial regulator of the transaction.

Mr FitzPatrick said he was not sure if he had informed the regulator or if it was Mr Drumm’s belief they would be “very happy”.

“I said what about the regulator and your man said sure they’ll be delighted with it,” he said.

Mr FitzPatrick said he himself had not discussed it with the regulator “good, bad or indifferent”.

He told gardaí he had bowed out of the Quinn CFD situation after a meeting with Mr Quinn in Buswell’s Hotel, Dublin near the end of March and Mr Drumm was “driving it”.

He said he understood Mr Drumm had been in touch with the regulator.

Asked by gardaí how he felt about lending to bank customers to buy bank shares, he said Morgan Stanley was involved in the deal and “it all looked appropriate”.

He also told gardaí he was not kept up to speed with how the deal was going after July 9th. But it was his job to tell the rest of the board about it.

“I rang them pretty much straight away,” he said.

Asked by gardaí when he became aware of the identity of the Maple 10, Mr FitzPatrick told gardaí it was not until “six months after the event”.

The case continues.