15 top names owe Anglo €500m each
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FIFTEEN developers and business people owe Anglo Irish Bank more than €500m each, a key report reveals.
It also warns that taxpayers now face a potential bad debt bill of €5.3bn.
And the PricewaterhouseCoopers report reveals there was a €5bn 'run' on the bank last September.
Earlier, the bank's own report revealed that the so-called 'golden circle' of 10 people got €450m in loans from Anglo.
That is €150m more than previously estimated.
The first insights into the crisis at the bank came in the two reports last night.
But despite the massive implications of both reports, growing demands to identify the 10 businessmen fell on deaf ears as the Government insisted it would prejudice any court case and breach client confidentiality.
The Anglo Irish Bank annual report for 2008, running right up to before the institution sparked the State guarantee for the banking system, revealed:
€451m had been loaned to "10 long-standing clients of the bank" in order to buy shares;
Only €83m was paid back to date;
Directors were paid a whopping €9.5m;
The same directors borrowed €179m.
Former chairman Sean FitzPatrick owes €83m in loans and the Government expects this money to be repaid in full.
But the bank rejected Finance Minister Brian Lenihan's position on the exchange of €7bn with Irish Life and Permanent (IL&P).
Anglo is still insisting all the transactions between them and IL&P were above board, despite Mr Lenihan forcing senior executives to resign over the issue.
New chairman Donal O'Connor apologised for the situation in the bank.
"I acknowledge again the sense of hurt, outrage and disappointment that people feel towards the bank following disclosures regarding loans to the former chairman and other matters," he said. The taxpayer will take a hit of at least €300m from the loans to the 'golden circle' of mystery investors.
Anglo Irish Bank lent the high-rollers €451m to buy a 10pc stake in the bank last summer but recovered €83m as they subsequently sold on some of the shares on the market.
This leaves the 10 investors owing €368m, but the bank is entitled to go after the individuals' personal assets for only 25pc of their borrowings, or the equivalent of €112.7m.
Some 75pc, or €276m, of the loans were secured on nothing other than Anglo shares, which are now worthless.
The bank confirmed in its annual report yesterday that it is preparing to put aside €300m -- largely to cover the possibility of the unsecured part of these loans never being paid back.
The €300m provision also covers directors' loans where Anglo shares were offered up as collateral. However, the bank reiterated last night that all such directors' loans were backed by guarantees that allow the group to go after their personal property. The report also shows how executives paid and loaned themselves astonishing amounts of money as they "brought the bank to its knees".
The directors paid themselves €9.5m and borrowed €179m in the period before the bank needed to be bailed out.
In the wake of the publication of the report, Fine Gael and the Labour Party continued to press for the names to be released. But the Government is insistent that it cannot name the 10.
Mr Lenihan said that revealing the names would "prejudice the successful prosecution" of anybody involved.
"It would also be a breach of the confidentiality owed to a customer," he said.
Prosecutions
However, criminal prosecutions are expected to follow the Financial Regulator's belief that Anglo Irish Bank deceived investigators probing the 'golden circle' loans scandal.
The Irish Independent has learned that acting regulator Mary O'Dea briefed Garda Commissioner Fachtna Murphy this week about her concerns.
The regulator believes Anglo misrepresented the shares deal, originally presenting it as a "legal" and "normal commercial transaction" when it subsequently emerged that Anglo actually underwrote the loans.
The massive €9.5m paid to the directors will only add to public anger over events at the bank, Fine Gael's Richard Bruton said. "We see the directors who drove this bank into a wall walking off with €9.5m in fees and the taxpayer left to pick up bigger losses now than we expected," he said.
But Mr Lenihan said the publication of the bank's annual report will allow us to "draw a line" under past activities.
- Joe Brennan and Brendan Keenan
