Regulator ‘very close’ to deal to unwind Quinn’s stake
Con Horan continues evidence at Anglo trial
Published 12/03/2014 | 12:07
A SENIOR official at the Financial Regulator has agreed that the regulator was "very close" to a planned deal, in March 2008, to unwind businessman Sean Quinn's indirect stake in the former Anglo Irish Bank.
But Con Horan, who was second-in-command at the Financial Regulator in 2008, said he had no recollection of the regulator being in the transaction with, metaphorically, it's "sleeves rolled up".
Mr Horan is giving evidence today (WED) 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.
Under cross examination by Michael O'Higgins SC, representing former Anglo chairman Sean FitzPatrick, Mr Horan told the Circuit Criminal Court he had no recollection of the regulator being "very hands on" or directing Anglo and the Quinns to go to a solicitor for the purpose of drafting an agreement following a meeting on March 31st, shortly after the so called "St Patrick's Day Massacre" when the bank's share price fell steeply.
The loan-for-shares deal ultimately proceeded in July 2008.
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 so-called 'Maple 10'; a group of 10 former large-scale customers of Anglo Irish Bank. The three men have pleaded not guilty to all of the charges.
In 2008 Con Horan was the prudential director at the Irish Financial Services Regulatory Authority (IFSRA).
Mr Horan attended a series of meetings of the Domestic Standing Group (DSG), described by Senior Counsel Michael O'Higgins, representing Mr FitzPatrick, as "a doomsday committee" set up under European law to look at worst case scenarios in relation to financial stability.
Yesterday (TUE) Mr Horan agreed that the idea of bringing in so called high net-worth individuals was raised at a meeting he had with former Anglo Irish Bank chief executive David Drumm.
Mr Horan said he could not recall whether it was originally his idea for the bank to organise a group of high net worth individuals.
He said he may have been the one to raise the issue.
He was told there was a possibility that US investment house Bain could buy 10pc of the bank, he said.
Mr Horan said that a high level group known as the Domestic Standing Group – which was made up of officials from the Central Bank, Financial Regular and Department of Finance – discussed the situation of Anglo Irish Bank and Sean Quinn's indirect stake in the bank on July 8, 2008.
The officials considered asking the two main banks – AIB and Bank of Ireland – to create an investment vehicle to take over Mr Quinn's exposure to Anglo Irish Bank.
Minutes of the Domestic Standing Group meeting state that a "domestic solution" would have to be found for the Quinn stake if the potential US deal fell though, the jury was told.
The meetings took place in the weeks before Anglo Irish Bank lent money to 10 clients and members of the Quinn family to unwind the businessman's indirect stake in the bank which was regarded as dangerously large.
Mr Horan agreed with defence barrister Brendan Grehan that it did not "cause any alarm bells" when he was told by Mr Drumm that the deal to unwind the Quinn stake might involve some lending by the bank.
Mr Horan indicated in his evidence that he expected any such loans to be short term.
The trial continues.