Business Irish

Saturday 23 September 2017

Ex-Anglo bosses 'thought they could walk on water'

Emmet Oliver, Joe Brennan, Shane Phelan and Fionnan Sheahan

A TOP executive in scandal-hit Anglo Irish Bank last night accused its former senior managers of thinking they "could walk on water", as the disgraced lender announced the biggest corporate loss - €12.7bn - in Irish history.

The state-owned lender's new chief financial officer, Maarten van Eden, said: "If you get lucky for a long period of time, you start to think the rules don't apply to you. These guys thought they could walk on water. They weren't smart, they were lucky.''

His stinging criticism came as the bank, which was taken over by the State in January 2009, made the unprecedented move of disclosing the details of €155m-worth of loans to its ex-directors, the bulk of which it is prepared to wipe out.

Anglo's annual report uncovered details of a lax credit culture, with directors being approved for massive loans to finance film projects, buy restaurants, fund housing developments and even to purchase shares in the lender itself.

It also emerged that Anglo paid top management €19m in the 15 months to the end of last year, including €7m in salaries and €1m in directors' fees.

Disgraced former chief executive and chairman Sean FitzPatrick managed to secure €131,000 in fees in his last few months at the bank.

Mr FitzPatrick, who was arrested earlier this month by fraud squad investigators, will not be expected to repay €68m of his €85m borrowings, Anglo's annual accounts show.

Another €6.7m is expected to be written off from €8.4m owed by former chief executive David Drumm.

Ex-finance director William McAteer, also arrested last week, has €8.5m in loans, but the bank expects to get back around 10pc of that figure.

Another ex-director, Lar Bradshaw, is not expected to repay €22m of €27.3m he owes.

Both Mr Bradshaw and Mr FitzPatrick were jointly lent €13.9m for an oil exploration investment, of which €11m is expected to be wiped out.



Denounced

Anglo's new chief executive, Mike Aynsley, also denounced the extent of former directors' loans and sky-high pay packets as "disgraceful and obscene".

Mr FitzPatrick last night denied he had fled abroad to escape a garda investigation and public ire over the bailout.

Mr FitzPatrick (61) told the Irish Independent suggestions that he had left the country for good were "ridiculous".

The potential write-offs were outlined in the long-awaited Anglo annual report, as European Union regulators gave provisional approval for furious taxpayers to pump another €10.4bn into the bank.

The scale of the losses and a taxpayer-backed clean-up operation sparked heated clashes in the Dail.

Taoiseach Brian Cowen defended his political reputation after being accused of economic treason over the latest €8.3bn bailout of the lender.

"I will not be accused of seeking to cause treason to my country," he said.

And in a further blow to hard-pressed taxpayers, Bank of Ireland will raise its mortgage rates by 0.5pc next week.

The bank, which needs an additional €2.66bn in capital, is following the lead of Permanent TSB and AIB by hiking its rate on standard variable mortgages. The move is set to be followed by EBS raising its rates.

Irish Independent

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