Probe into Anglo loans to 'golden circle' hit by delays
Monday October 26 2009
The conclusion of a €1m-plus accountancy watchdog probe into matters involving Anglo Irish Bank has been delayed for the second time -- and is now not expected until next February.
The investigation by the Chartered Accountants Regulatory Board's (CARB) complaints committee centres around directors' loans, deposit transfers from Irish Life & Permanent (IL&P), and loans to the so-called 'golden circle' to buy bank stock before Anglo was nationalised last January.
Sources said that the delay was down to the sheer amount of material that special investigator John Purcell, the former comptroller and auditor general, has to wade through.
An initial target of completing the inquiry by September was scrapped during the summer as Mr Purcell sought legal advice on the professional body's powers under new laws to haul non-members before it to give evidence.
Revelations
Still, it remains on track to be the first of a series of high-profile investigations to reach a conclusion. Other probes by the Office of the Director of Corporate Enforcement and the Garda Bureau of Fraud Investigation are not expected to finish until later next year.
Mr Purcell was hired by the accountancy body last February to look into directors' loans at the bank, on the back of revelations that former chairman Sean FitzPatrick had avoided disclosing borrowings of up to €122m from shareholders and auditors over eight years.
It was reported yesterday that Anglo restructured some of Mr FitzPatrick's loans last January to give the bank a lean on further security, including an investment held by the former banker in a Nigerian oil well. It is speculated that the agreement may have involved Anglo providing further funding to Mr FitzPatrick.
Chartered Accountants Ireland set up CARB in 2007 to regulate members and investigate possible breaches of professional conduct. Mr FitzPatrick is a member.
Mr Purcell's remit was widened in March to look into the reporting of €7.45bn of short-term deposits made by IL&P with Anglo in September last year, as well as the bank's controversial provision of a €451m loan a few months earlier to 10 property developer clients to purchase a combined 10pc stake in the group.
The investigator is also looking at whether Mr FitzPatrick and other former bank directors -- David Drumm and William McAteer, all members of the institute -- played a role in either transaction.
If his report highlights matters of concern, the institute will convene a disciplinary tribunal, which has the power to fine individual members up to €30,000 as well as €30,000 per partner in a firm.
Meanwhile, Anglo is set later this week to unveil a massive redundancy plan, targeting "surplus capacity" following the collapse of its business model. Inside speculation points to between 200 and 500 jobs being lost among its 1,700-strong workforce. A second, smaller wave of redundancies is expected early next year.
- Joe Brennan
Irish Independent
