Sunday 21 December 2014

Trial verdict looms for the 'Anglo Three'

Dearbhail McDonald and Sarah Stack

Published 12/04/2014 | 02:30

The three accused, from left, Pat Whelan, Sean FitzPatrick and Willie McAteer. Photo: PA
The three accused, from left, Pat Whelan, Sean FitzPatrick and Willie McAteer. Photo: PA

THREE former Anglo Irish Bank executives must be found not guilty if the State fails to prove that a controversial €619m loan-for-shares deal – executed after the discovery of businessman Sean Quinn's secret stake – was designed to stabilise the bank's share price, a court has heard.

Yesterday, the jury in the trial of Sean FitzPatrick, Pat Whelan and William McAteer began their deliberations following 10 weeks of intense proceedings at Dublin's Circuit Criminal Court.

They resume their deliberations on Monday and a verdict is expected by Good Friday.

The jury were told by trial judge Martin Nolan that the State must show the unwind of Sean Quinn's secret stake in the bank – which involved lending to his wife Patricia Quinn, his five adult children and 10 high net worth clients known as the Maple 10 – was not in the ordinary course of the bank's business.

Mr FitzPatrick (65), of Greystones, Co Wicklow; Mr McAteer (63), of Rathgar in Dublin; and Mr Whelan (51), of Malahide, Co Dublin, all deny 10 counts of providing unlawful financial assistance to the Maple 10 in July 2008 to buy shares in Anglo.

Mr Whelan, Anglo's former head of lending in Ireland, and ex-chief risk officer Mr McAteer also deny six counts each of providing unlawful financial assistance to six members of the Quinn family as part of the same deal.

The Maple 10 were described as remarkable men by Judge Nolan, who said they wanted to help Anglo because of their relationship with senior executives.

"I'm impressed with these 10," said Judge Nolan who told the jury that they were not entitled to visit upon the accused Continued on Page 16

men the financial calamity of the country.

"They (the Maple 10) were going to borrow quite an amount of money with 25pc recourse," he said.

"They stood to lose money if things went wrong but they were prepared to do it because they were asked by the bank."

This was done for the bank and for the entire country, he added.

Judge Nolan has posed five key questions for the jury about the July 2008 deal and said the men must be acquitted if the jury couldn't answer the questions in the affirmative.

Mr Quinn's secret stake, which at one point reached almost 30pc, was built up using contracts for difference (CFDs), which were described by Judge Nolan as "a gambling instrument".

The judge said the jury must be satisfied beyond a reasonable doubt that the funds were actually given and must be satisfied the overarching purpose of the lending scheme was to stabilise the bank's share price in the unwinding of the Quinn position.

They must decide if the loans were lending in the ordinary course of the bank's business.

If not, the men were guilty of breaking Section 60 of the Companies Act 1963 which, the judge said, makes it unlawful for a company to buy its own shares.

CANDID

The offence attracts a jail term of up to five years.

The judge said that Mr Whelan and Mr McAteer had been "candid" about their involvement in the scheme and said the jury must be satisfied that they knew of the scheme, its details and, if they did, if they had taken any steps to stop it.

In the case of Mr FitzPatrick, who was the bank's non-executive chairman at the time of the deal, Judge Nolan said the jury must ask if he knew before the deal was executed that Anglo was going to provide funds to 10 people to buy shares and that the purpose was to ensure price stability.

Judge Nolan said that the attitude of the Office of the Financial Regulator, the involvement of Morgan Stanley and any mention of legal advice were matters that were "totally irrelevant".

The judge also said that any steps taken by the three accused in relation to whether the scheme was legal or not, as well as their belief as to the legality or illegality of the lending scheme, were also totally irrelevant.

The judge said this may seem "very unfair", but he directed the jurors as a matter of law to ignore these factors.

Judge Nolan said he would require unanimous verdicts from the jury.

Irish Independent

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