FitzPatrick's last- gasp Anglo deal
Bank's new boss to probe UK fund
Published 25/04/2010 | 05:00
A UK-based investment fund set up by disgraced former Anglo Irish Bank chairman Sean FitzPatrick just weeks before his resignation is to be investigated on the instructions of the bank's chief executive Mike Aynsley .
Last night, Mr Aynsley said he knew nothing about Mr FitzPatrick's establishment of the partnership but described it as "unusual" after it was brought to his attention by the Sunday Independent.
A number of Anglo's highest profile clients -- including two of Nama's top 10 developers Bernard McNamara and Galway-based Gerry Barrett -- were among those who invested in the UK-registered entity.
According to UK Companies House records, the fund was incorporated on October 24, 2008, just three weeks after the Government introduced the €400bn deposit guarantee scheme and at a time when the bank was teetering on the brink of collapse.
Monies placed with the fund -- titled the Anglo Irish JCF 1 LLP -- were routed subsequently into another fund controlled by the New York-based private equity giant JC Flowers, known as the Private Equity II Fund.
Within weeks of Anglo JCF 1's establishment, representatives of JC Flowers (including its billionaire owner Christopher Flowers) arrived in Dublin with proposals to invest between €7bn and €8bn in Anglo as part of the Mallabraca consortium.
Last night, Anglo chief executive Mr Aynsley said he had known nothing about the investment in the JC Flowers Private Equity II Fund before the Sunday Independent raised the matter with him.
A clearly surprised Mr Aynsley said: "I know nothing about it at this point. I haven't seen the documents but I am very interested to see them. It is obviously part of the history of what happened during the dying stages of the bank pre-nationalisation when people were obviously running around trying to put deals together to save the organisation.
"The structure that you have shown me seems unusual. I don't know anything about it, so when I get in to the office on Monday morning I'll have a look into it and see what is going on."
Separately, the Sunday Independent has learnt that funds invested in the Private Equity II Fund 2006 were used to invest in banks and other financial services institutions in countries across the globe including Japan, Germany and the UK. According to reports carried across the media here in November 2008, at least some of that money appeared for a time to be also set for investment in Ireland's banks.
Documents lodged with the UK Companies House show that Anglo Irish JCF 1 was incorporated on October 24, 2008.
In the months that followed, a series of consent forms were signed by a number of the fund's investors which saw their names being recorded as 'members' of the limited liability partnership.
An examination of those consent forms throws up a number of high-profile business names, including that of Sean FitzPatrick himself.
According to the official filings, Mr FitzPatrick gave his written agreement to be noted as a member of Anglo Irish JCF 1 on March 25 of last year, a full four months after he was forced to resign from Anglo.
The disgraced former chairman's membership of the fund was submitted to the UK Companies House by Anglo's UK Finance Director Gordon Parker on August 26 last year, the records show.
Asked if he was concerned to see Mr FitzPatrick's name appended to an entity related to Anglo Irish Bank as recently as this (a full nine months after his departure from the bank), Mr Aynsley said: "I'm getting used to seeing Sean FitzPatrick's name all over a lot of things. But it does concern me that that is the case. But I don't know the history and the background of this so I will have to look into it and get into the detail."
While there is absolutely no evidence to suggest that any of the investors, or members of the Anglo Irish JCF 1 partnership, were engaged in anything other than what the banking industry describes as "passive investment", the names of those recorded at the UK Companies House read like a who's who of Ireland's business elite.
Among the other individuals listed as members of Anglo Irish JCF 1 are the developers Bernard McNamara and Galway-based Gerry Barrett. Both men saw loans associated with their development companies taken over in recent weeks by Nama as part of its transfer of €16bn in borrowings of the top 10 developers. Also listed as a member of the UK-based investment vehicle is Mr McNamara's development partner, Jeremiah O'Reilly.
Outside of the development sector, Ardagh Glass chief Paul Coulson is also recorded as a member of the partnership. Mr Coulson is perhaps best known for having pulled off arguably one of the greatest deals of the boom, with his company's sale of the former Irish Glass Bottle site in 2006 for €412m to the Becbay consortium headed up Bernard McNamara.
Interestingly, the multi-million euro acquisition was backed in part by a €288m loan from Anglo Irish Bank, when Mr FitzPatrick was still serving as its chairman.
Another leading businessman recorded as a member of the Anglo Irish JCF 1 is John Sisk of the famous contractors, John Sisk.
Speaking to the Sunday Independent last Friday, Mr Sisk confirmed his investment in the Anglo vehicle, describing it as an "investment fund". Mr Sisk declined to comment any further, insisting that it was a private matter.
Sources close to other members of the Anglo Irish JCF 1 partnership echoed Mr Sisk's comments on the nature of their investment.
Also listed as members of the partnership are former Anglo Irish Bank director and Smurfit Kappa CEO Gary McGann, as well as Carol Wright, the wife of the late Jefferson Smurfit Group CEO Paddy Wright, who served as a director of Anglo prior to his death in 2007.
Elsewhere on the list of members, a group of investors have their interest in the UK-registered vehicle recorded on a confidential basis through Davycrest Nominees, an entity controlled by Davy Stockbrokers in Dublin.