Sean FitzPatrick: ‘I was told loans to Maple 10 were all kosher’
SEAN FitzPatrick was in the south of France when told ten substantial customers would be lent money to unwind Sean Quinn’s secret stake in the bank, a court heard.
The former chairman told gardai he was never told the identity of the ten by chief executive David Drumm, who wanted to keep the details of the deal “very very tight”.
The trial of three executives heard Mr FitzPatrick was first questioned by fraud squad officers over the loan-for-shares deal on March 18, 2010, at Bray Garda Station.
Mr Drumm told him international investment bank Morgan Stanly was involved and that the Central Bank and Financial Regulator – who had known about the Quinn problem - would be “delighted”, he said.
“He was ringing me not to discuss it, but telling me it’s happening and I was to ring the board and tell them the good news,” Mr FitzPatrick told officers.
“That we were coming to the end of this difficult situation.”
Mr FitzPatrick said he was told the ten would given loans to fund the shares and that it was “all kosher, above board” by Dr Dumm.
“Just think about that, was he going to go off and do something illegal in one of the most publicly looked at deals in Ireland. Why would he do that?” he said to gardai.
“We had Morgan Stanly right in the middle advising us. Why would they not say you cannot do that?
“It all stacked up, it all looked appropriate.”
He asked Mr Drumm if the ten customers were real people of “substance” who would afford the loans if anything went wrong, and alleged he only heard names of the ten in “dribs and drabs” through the media and friends more than six months later, the court was told.
Mr FitzPatrick (65), from Greystones, Co Wicklow; former head of finance and risk William McAteer (63), of Rathgar in Dublin; and Pat Whelan (51), of Malahide, Co Dublin, deny 16 counts each of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in Anglo Irish Bank.
The loan-for-shares deal involved unwinding Sean Quinn’s secret 29pc stake in the bank, build up through contracts for difference (cfds).
The 16 charges relate to loans to six members of the Quinn family and 10 high net worth Anglo clients, who became known as the Maple 10.
Mr Whelan, former head of lending (Ireland), also denies being privy to the fraudulent alteration of loan facility letters to seven individuals.
Dressed in a dark grey suit, a white and blue striped shirt and pink and blue tie and wearing thick rimmed glasses, Mr FitzPatrick studied documents as memos of his Garda interview notes were being read in to the record at the Circuit Criminal Court in Dublin by prosecuting counsel Una Ni Raifeartaigh.
He told investigators he was never involved in any executive discussions at Anglo while chairman, ensuring Mr Drumm – who replaced Mr FitzPatrick as CEO in January 2005 – was “the man in charge”.
He said he was very much a "non-executive" at the bank, adding that he only had a professional relationship with Mr Drumm and had never been in each others homes.
“As chairman he came to me for advice on various matters, where possible I would give whatever advice I could give him,” Mr FitzPatrick told fraud squad officers.
“But David to his fellow executives wanted to show he was very independent to me so I was never involved in any executive discussions or matters of an executive matter.”
Mr FitzPatrick said he had never spoke to or met Mr Quinn before he attended a meeting with the Quinn Group boss and his officials in the Ardboyne Hotel in Navan by Mr Drumm in September 2007 as rumours circulated about his stake in the bank.
“The reason I was being asked was because David felt Sean Quinn has such high regard for me and that I was to show how disappointed I was that he had cfds in the bank and that, according to David, might encourage him to dispose of them,” the former chairman told gardai.
He added that this was “highly unusual” as he “rarely would, never would” attend any type of executive meeting with Mr Drumm.
Mr FitzPatrick said the board of the bank was “horrified” when they reported back how high Mr Quinn’s stake was, which he recalled at being between 19pc and 22pc, and said management had to find a way out of the problem.
Mr Drumm is in the USA and is not on trial.
The trial, before a jury seven men and seven women, continues.