Pat Neary: 'I didn't ask Sean Quinn about extent of Anglo stake'
Published 13/03/2014 | 13:35
THE former CEO of the Financial Regulator said that he didn't ask businessman Sean Quinn about the extent of his indirect stake in the former Anglo Irish Bank because he did not feel it was right to "tackle" a private citizen about their personal investment portfolio.
The trial of three former Anglo executives has heard that former regulator Pat Neary and Mr Quinn met in January 2008 when market rumours and media reports suggested that Mr Quinn had built up a stake using Contracts for Difference (CFDs) of more than 10pc.
This morning Mr Neary said that he didn't ask Mr Quinn outright about his CFD holding in Anglo because he didn't feel it was "fair or appropriate" to tackle a person about their own private portfolio.
Earlier, Mr Neary said "no information whatsoever" in the Autumn of 2007 about the scale of businessman Sean Quinn's stake in the bank, despite strong market rumours.
Mr Neary said that the first time he became aware of the scale of Mr Quinn's indirect holding, built up through CFDs was on Good Friday, March 21st 2008.
Mr Neary has told Dublin's Circuit Criminal Court that sometime in the Autumn of 2007 he received a call from David Drumm, former CEO of Anglo Irish Bank, who wanted to meet him in person.
"Chief Executives don't normally come to see me in person," said Mr Neary.
The court heard that Mr Drumm told Mr Neary at that meeting that that he was worried about Mr Quinn's holding, believed to exceed 10pc.
Mr Quinn, the court has heard previously, built up a 29pc stake through CFDs.
"The reality was we had no information whatsoever," said Mr Neary, who explained that the market in CFDs was not regulated, so his office had no statistics available to it.
Mr Neary is giving evidence in the trial of three former Anglo Irish Bank directors accused of allowing the bank to illegally provide loans used to fund the acquisition of the shares in the bank.
The three accused men are Sean FitzPatrick (65), from Greystones, Co Wicklow; William McAteer (63), of Rathgar in Dublin; and Patrick Whelan (51), of Malahide, Co Dublin.
They are charged with 16 counts each of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in Anglo Irish Bank.
The 16 are members of the Quinn family plus the Maple 10, a group of 10 former large-scale Anglo.
Mr Whelan also denies being privy to the fraudulent alteration of loan facility letters to seven individuals in October 2008.
Mr Neary was first employed in the Central Bank since 1971 and became CEO of the Irish Financial Services Regulatory Authority (IFSRA) in February 2006.
Yesterday, the former assistant secretary general of the Department of Finance said the department knew that there was "some lending" by the former Anglo Irish Bank to wealthy individuals to buy shares in the bank but believed the lending was only short-term.
The trial heard that Con Horan, the former 'second- in-command' at the Financial Regulator, told Kevin Cardiff – former assistant secretary general at the department – that there was some short-term lending to high net worth individuals from Ireland and the US.
Mr Horan, however, told the trial he did not find out that Anglo had given actual loans to the group that became known as the Maple 10 to buy Anglo's shares to unwind businessman Sean Quinn's 29pc indirect stake in Anglo until January 2009.
This was six months after the loan-for-shares deal was executed.
The trial continues.