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Thursday 18 September 2014

Major setback for Quinns as Anglo pair convicted

Bankers guilty over Maple 10 but cleared on Quinn loan charges

Dearbhail McDonald and Sarah Stack

Published 18/04/2014 | 02:30

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THE family of businessman Sean Quinn suffered a major setback in their €2.3bn claim against the State after two bankers were convicted of providing illegal loans to the so-called Maple 10 – but cleared of providing illegal loans to the Quinns.

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The Quinns claim that loans given to them by the former Anglo Irish Bank, as Mr Quinn's "spectacular punt" on Anglo shares failed, are illegal.

But yesterday the family suffered a setback in their civil case after a jury at Dublin's Circuit Criminal Court said former Anglo directors Pat Whelan and William McAteer were not guilty of giving illegal loans to Mr Quinn's wife Patricia and their five adult children.

The Quinns have vowed to "go on with the show" after the biggest white-collar trial in Irish history.

Sean FitzPatrick, Anglo's former chairman, walked free from court on Wednesday after he was cleared by trial judge Martin Nolan of permitting unlawful loans to the Quinns.

He was also acquitted by the jury of permitting illegal loans to a wealthy group of borrowers known as the Maple 10.

The jury yesterday convicted Mr Whelan and Mr McAteer on 10 counts each of providing illegal loans to the Maple 10 to buy shares in the bank. The two face up to five years in prison when they are sentenced later this month.

Sean Quinn and his daughter Brenda Quinn outside court after he was called as a witness earlier in the trial. Photo: Collins
Former Anglo executive Pat Whelan
Former Anglo director Willie McAteer at Dublin Circuit Criminal Court yesterday
Former Anglo director Willie McAteer at Dublin Circuit Criminal Court yesterday

A member of the Quinn family attended each day of the 11-week-long Anglo trial.

Last night, the Quinns – whose assets have been frozen – said that the information they have garnered will be of huge assistance to them in their forthcoming legal cases, expected to last nine months in the Commercial Court.

VERDICTS

Their civil case against the IBRC (formerly Anglo), the Department of Finance, the Financial Regulator and the board of directors of Anglo Irish Bank has been on hold pending the trial.

"As we are now in our fourth year since the invalid appointment of a share receiver to our companies, and the criminal trial has now concluded, we will now be looking for a hearing date as soon as possible," the family said in a statement.

Speaking to the Irish Independent, Mr Quinn's solicitor, son-in-law Niall McPartlin, said the family intended to "go on with the show".

The Quinn family will shortly seek an early trial date now that the Anglo trial is in its final stages. The jury returned the final verdicts against Mr Whelan and Mr McAteer after 16 hours and 53 minutes of deliberation over five days.

Although offered the option of a majority verdict, where at least 10 of the 12 jurors agree, the jury returned unanimous guilty verdicts on the Maple 10 loans.

On Wednesday the jury acquitted Mr FitzPatrick of all counts in relation to the Maple 10, who were described in a draft 2008 letter by Whelan as "heroes".

The Irish Independent has learned that in the wake of the Anglo trial, commercial and criminal lawyers have been inundated with queries from company directors who routinely take legal advice to ensure compliance with company law.

This is because trial judge Martin Nolan ruled that any legal advice obtained by Anglo in advance of the July 2008 deal was irrelevant and could not be considered by the jury.

The trial lasted 48 days and was a result of the biggest fraud investigation in Irish history. It was the first time anyone was tried for the offence and the first time an enlarged jury of 15 was used.

Judge Nolan thanked the jury for their verdicts and their service and told them they were a credit to the jury system.

He excused them from further service for 10 years and also thanked the three jurors who had started the trial before the final 12 were chosen.

Judge Nolan set a sentence date of April 28 next at 2pm and said he would be unlikely to give a decision that day – but would hear the evidence in the case.

SHARES

McAteer and Whelan remain on continuing bail until the sentence date.

The Maple 10 deal was designed to unwind the 29.4pc control of the bank which Mr Quinn had built up through investment tools known as contracts for difference.

The 10 investors were loaned a total of €450m by Anglo to buy around 10pc of the shares which Mr Quinn controlled.

Mr Quinn's wife and five children were also loaned €169m to buy nearly 15pc of the stock.

Meanwhile, the trial heard, in the absence of the jury, that former Finance Minister Brian Lenihan did not give "benediction" or sanctify the lending scheme.

Kevin Cardiff, former secretary general at the Department of Finance, said he did ask the question "Is this legal?"

"Just to be clear, I had no role in giving benediction, nor did the minister," Mr Cardiff explained to Michael O'Higgins, SC, who was representing Mr FitzPatrick. "There was no benediction, nor could there be."

Mr Cardiff added that he did not believe the Financial Regulator would have brought the deal to the department if legal advice obtained by Anglo – but ruled irrelevant by the trial judge – had been negative.

Irish Independent

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