Anglo Irish Bank reports

 

THE PUBLICATION of the annual report and accounts of Anglo Irish Bank, and the related PriceWaterhouseCooper report on the bank, has done little to reduce public disquiet about what went on there under former chairman Seán FitzPatrick. If anything it indicates that matters were a good deal worse than has been disclosed to date.

The size of the loans extended to the so called “golden circle” of clients to enable them to buy 10 per cent of the bank is significantly larger than previously revealed. Equally, the extent to which the directors and executives of the bank were also big customers is truly shocking. It confirms the picture that has emerged over the last few months of an organisation that was fundamentally flawed and morally bankrupt.

The comments of the Minister for Finance Brian Lenihan to the effect that the publication of the report marks a watershed between the old and the new Anglo are simply ludicrous. It is clear that the bank, which is subject to a half dozen internal and external inquiries, examinations and reviews will be dogged by its controversial past for years to come. The PriceWaterhouseCoopers report, published late last night, does not, on the face of it, add materially to what is already known about the scandalous goings on at Anglo Irish.

The annual report of the bank leaves a number of questions unanswered. Among them is the nature of the back-to-back loan arrangement with Irish Life Permanent. The two banks have put very different complexions on the transactions and one or other may have seriously mislead investors as a result. But the locus of public interest in the bank is, and will remain, the series of events culminating in the purchase of 10 per cent of the bank by the long standing customers using funds supplied by the bank itself. Central to this is a satisfactory explanation from Sean Quinn as to why he built up a clandestine 25 per cent in the bank to begin with.

The extent to which the bank, and thus by extension the Government, appears to be hiding behind highly contested legal arguments in order to avoid disclosure adds to disquiet. It only serves to remind the public of the elaborate manoeuvres undertaken by the Taoiseach’s predecessor to avoid answering questions about his finances.

The reliance by the current chairman of the bank on “normal banking practice” as the reason for not giving details of the individuals involved rings hollow given the extent to which the rule book was thrown out the window when the deal was being put together. The inference that these customers were involved in some sort of normal transaction simply does not stand up to scrutiny. They were lent massive amounts of money, largely unsecured, in order to buy big shareholdings at a time when bank shares were in free fall.

Their participation in this share support scheme contributed to the series of events that has resulted in the taxpayer taking over the bank and being on the hook for all of its debts. They, along with all the others responsible for this debacle, must be held to public account. If the Government insists that they must remain anonymous, it must advance a credible reason.