THE jury in the trial of three former Anglo Irish Bank executives has heard how a persistent decline in the bank's share price in 2007 and 2008 put pressure on the relationship between businessman Sean Quinn and executives at the bank.
Liam McCaffrey, former CEO of the Quinn Group – whose valuation, the jury heard, was once placed at up to €5bn – said that Mr Quinn first revealed in September 2007 that he had built up a 24pc stake in Anglo.
At a meeting in the Ardboyne Hotel, Navan, Mr Quinn told Anglo's CEO David Drumm and its non-executive chairman, Sean FitzPatrick, that he had the 24pc stake.
The shareholding was built up through derivative instruments known as Contracts for Difference (CFDs) through Bazelly Limited, a company incorporated in Madeira.
Mr McCaffrey, who attended the meeting in the Ardboyne, said that Mr Drumm had thought the stake built up by Mr Quinn was "in the teens".
Mr McCaffrey said the two Anglo executives were "concerned and somewhat surprised" when Mr Quinn revealed the actual level of his shareholding.
The ex-CEO declined to comment on a suggestion by Senior Counsel Brendan Grehan, representing the accused Pat Whelan, that "the bank was conjoined with Sean Quinn at the hip in terms of their fates".
But Mr McCaffrey said that difficulties arose when the margin calls on Mr Quinn "became extreme" in March 2008 following the collapse of US bank Bear Stearns and the so-called "St Patrick's Day Massacre" on Anglo's shares.
When it became clear in mid-April that no buyers could be found to unwind Mr Quinn's stake, Mr McCaffrey said a "difficult and angry" conversation ensued during a conference call on the morning of July 14, 2008.
Sean Quinn was reluctant to go ahead with the unwinding because he was holding out for a recovery of the share price.
"Either David Drumm walked out or Sean (Quinn) hung up. There was a row," Mr McCaffrey told the court.
Sean Quinn is due to give evidence today.
The trial continues.