Courts

Wednesday 23 July 2014

Anglo trial: Unusual aspects to a loan-for-shares deal used to unwind Sean Quinn’s secret stake

Sarah Stack

Published 07/03/2014|19:13

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Former billionaire Sean Quinn
Former billionaire Sean Quinn

THERE were several unusual aspects about a loan-for-shares deal to unwind Sean Quinn’s secret stake in Anglo Irish Bank, a court heard.

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Harry Eddis, of investment bank Morgan Stanley, told the trial of three Anglo executives it had been unusual for a Financial Regulator to seem to suggest a transaction take place.

An executive director in the legal department at the time of the transaction in July 2008, Mr Eddis said it had been normal in so far as Morgan Stanley was acting as an intermediary to effect the unwind of a derivative shareholding.

Mr Eddis told the court the fact the Financial Regulator had been involved and “seemed to have, sort of , sought" the transaction to happen was unusual.

"You wouldn’t often have a regulator take part in it or seem to be suggesting a transaction takes place,” he added via video link from London.

Other unusual aspects included those buying or selling shares being in touch with the issuer, Anglo; that the being was so involved in the transaction; and that Anglo were acting as power of attorney over the investor's loans.

Former Anglo chairman Sean FitzPatrick (65), from Greystones, Co Wicklow; former head of risk William McAteer (63), of Rathgar in Dublin; and Patrick Whelan (51), of Malahide, Co Dublin, have pleaded not guilty to 16 charges of unlawfully providing financial assistance to individuals for the purpose of buying shares in Anglo Irish Bank in 2008.

Mr Whelan, Anglo's former head of lending in Ireland, also denies seven charges of being privy to the fraudulent alteration of a loan facility letter.

Mr Eddis said he was part of a conference call with Con Horan – number two at the regulator’s office – the weekend before the deal was executed which involved Anglo lending €625 to the bank's ten top customers, known as the Maple 10, and six members of Mr Quinn's family to buy his 29pc indirect stake build up through contracts for difference (cfds).

The solicitor's contemporaneous notes recorded: “From CH’s perspective, it is fine and nothing out of the ordinary and note all that going ahead – very happy to have a chat with FSA.”

The trial continues.

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