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Saturday 20 September 2014

Maple 10 developer ‘given €45m from Anglo to buy shares before collapse’

Reilly tells trial of three former Anglo executives he also signed a power of attorney over to the bank

Published 11/02/2014 | 12:17

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Whelan (Patrick): Three bankers plead not (NOT) guilty to fraud offences, Dublin Circuit Criminal Court, 11-2-14 Pic shows: Former Anglo director Patrick Whelan (51), Rachra, Coast Road, Malahide, Co Dublin, leaving court yesterday (Tues) where he has pleaded not (NOT) guilty to 16 charges of fraud offences. Pic: Courtpix
Patrick Whelan leaving court today. Photo: Courtpix
Former Anglo Irish Bank Chief Financial Officer, Pat Whelan. Pic Frank McGrath
Former Anglo Irish Bank Chief Financial Officer, Pat Whelan. Pic Frank McGrath

A DEVELOPER was given a €45m loan from Anglo Irish Bank to buy 10 million shares as the lender was on the verge of collapse, a court heard.

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Sean Reilly told the trial of three former Anglo executives he also signed a power of attorney over to the bank so it could buy the shares at an appropriate time.

Mr Reilly said he was a long standing customer of Anglo in July 2008 when he was called by its head of lending Pat Whelan to meet its then chief executive David Drumm,  who is in the US and not on trial.

He met the pair at Anglo head office on St Stephen's Green the following day, July 9th, where he alleged Mr Drumm told him tne bank shares were coming under pressure and they were trying to unwind the position of the bank and asked if he would buy €60m of shares.

Mr Reilly, one of the so-called Maple 10 said the offer was very simple.

"They said they had a legal opinion from Mops (Matheson Ormsby Prentice) and that the Financial Regulator was aware of it, the Central Bank, that everyone was aware of it and wanted it done."

Mr Reilly told the court he signed a letter agreeing to the terms of the loans on July 11, 2008, and a second document granting power of attorney over to Anglo to open an account with Morgan Stanley to purchase up to 12 million  Anglo shares in his name.

He said he understood there was 25pc recourse, meaning he would only have to pay 25pc of the loan if the shares tumbled to zero.

He told prosecuting barrister Una Ni Raifeartaigh SC that he went ahead with the deal because he was asked and he thought he couldn't lose and could make some money on it.

"I felt they wanted us to go ahead," he said.

"With 25pc recourse it was a reasonable commercial deal. The shares has lost 75pc and at that stage they would have to lose another 75pc before we would be lose any money ourselves."

He later sold 80pc of his shares and lost 2.5m euro in the deal.

Sean FitzPatrick, 65, from Greystones in Co Wicklow, 51-year-old Patrick Whelan of Malahide in Dublin and 63-year-old William McAteer of Rathgar in Dublin have all 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 has also denied seven charges of being privy to the fraudulent alteration of a loan facility letter.

By Sarah Stack

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