Possible encouragement of financial regulator ‘irrelevant’

It was "wholly irrelevant" whether or not the financial regulator "encouraged" or "was comfortable with" lending to the Maple 10 and the Quinn family at the centre of a case against three former directors of Anglo Irish Bank, a jury at the Dublin Circuit Criminal Court was told today.

In his closing statement for the prosecution which began yesterday afternoon, Paul O’Higgins SC said it was also irrelevant whether other people should have been prosecuted in the trial.

He noted that former Anglo executives Fiachre O’Neill and Matt Moran had been given immunity from potential prosecution. He said if “absolutely everybody” was prosecuted,it could result in “absolutely everybody” getting off and “absolutely nobody is held to account for what is done”.

The question of legal advice was also irrelevant, as was the involvement of investment bank Morgan Stanley in the deal.

He also told the jury they should not consider “whether or not the bank would have collapsed” as a result of “the doing or not doing what was done here”.

Businessman Seán Quinn had taken holdings in Anglo, the jury had heard, and these were a cause of concern to the bank. In July 2008, it loaned the Maple 10 €45 million each to buy some of the shares underlying the holding. It also loaned members of the Quinn family almost €170 million to buy shares.

Sean FitzPatrick (65) of Greystones, Co Wicklow; William McAteer (63) of Rathgar, Dublin; and Pat Whelan (51) of Malahide, Dublin are facing 10 counts of providing unlawful financial assistance to 10 individuals in July 2008 to buy shares in the bank, contrary to section 60 of the Companies Act.

Mr McAteer and Mr Whelan also face six counts of providing unlawful financial assistance to six members of the Quinn family.

All three men have pleaded not guilty to the charges.

Mr O’Higgins said the first thing the jury will have to consider is if this lending took place.

“We say there is ample evidence that lending took place,” Mr O’Higgins said. He said the lending was “on a massive scale” for the purchase of shares.

The second issue to be considered if they found there had been lending, was if that lending was, beyond a reasonable doubt, “not in the ordinary course of business”.

If the jury found the lending was not, they should consider if “any or each of the accused either authorised” the lending or “permitted it”. If they did, they were guilty of an offence, Mr O’Higgins said, unless they had taken all reasonable steps to prevent it.

He said the prosecution believed they did not take “any steps of any kind” to prevent it.

Mr O’Higgins also told the jury the evidence that came up in the case may be ultimately shown not to be relevant and some of the evidence heard will not fall for the jury to consider.

He told them they had been directed to find Mr FitzPatrick not guilty on charges relating to the Quinns. “There is no evidence that Mr Fitzpatrick knew about the lending to the Quinns as distinct from the Maple 10,” he said.

Mr O’Higgins also told the jury it was the obligation of the prosecution to call all relevant witnesses in the case but this did not make them prosecution witnesses. The Maple 10 witnesses perhaps had dispositions that weren’t “completely neutral”, he suggested, and the Quinns did not come to court “without an agenda”.

“None of these are singing from a prosecution hymn sheet and in some cases they are not singing from the same hymn sheet as one another,” he said.

Mr O’Higgins said the fact that the financial regulator witnesses came from a State agency did not make them the Director of Public Prosecution’s “special witnesses”.

The same could be said for witnesses from Morgan Stanley and the Department of Finance, which was “not without interest or involvement”.

He also said nobody was obliged to be a director of a company. It was a job that was carried out for rewards and it was a privilege that came with responsibilities. One of these was to ensure the requirements of the Companies Act were complied with.

Mr O’Higgins is expected to continue his closing statement tomorrow.