Anglo lets Seanie off hook for €7m debt
FitzPatrick deal comes as bailout cost is put at €12,500 per family
ANGLO IRISH BANK, which is now under state control, has written off €7m of the debts of its former chairman Sean FitzPatrick, the Sunday Independent can reveal.
The disclosure comes as figures released yesterday indicated each family in the country would have to pay around €12,500 to bail out Anglo, the bank which was run by Mr FitzPatrick.
The banker was arrested last Thursday as part of a wide-ranging investigation by the gardai, and other authorities, into the questionable financial affairs at Anglo.
Mr Fitzpatrick, 61, had loans of around €100m outstanding when he was forced to resign from the bank in some disgrace in December 2008. The bank was nationalised a month later.
Since then he and his advisers have been in negotiations with Anglo with a view to its former chairman repaying his debts. The bank and Minister for Finance Brian Lenihan have repeatedly said that all debts would be vigorously pursued.
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However, the Sunday Independent has now learned that Mr FitzPatrick recently negotiated a part-settlement of €25m, which will see him avoid €7m in outstanding interest and penalty payments.
The disclosure is certain to provoke public outrage at a time when unease over the Government's policy towards the bank is growing. Yesterday, Fine Gael finance spokesman Richard Bruton said: "In the coming weeks, Anglo Irish Bank will ask this Government for at least €20bn of taxpayers' money, between payments for toxic loans by NAMA and recapitalisation.
"This is €12,500 for every Irish family. And it is three times the size of our annual investment in schools, roads, energy, telecoms and other infrastructures."
Mr Bruton is proposing that Anglo's depositors and performing business loans should be transferred in an orderly manner to another institution, perhaps to a new third force in Irish banking.
When the government guarantee for Anglo ends this September, he said, the bank should be treated like any other failed enterprise and handed over to its creditors to recover as much money as they can.
Mr FitzPatrick still has loans of between €70m and €80m outstanding.
The Sunday Independent understands that he is now attempting to raise capital through the sale of investments, including his share in an oil investment in Nigeria.
Asked yesterday about the recent write-off of Mr FitzPatrick's interest and penalties, the chairman-designate of Anglo, Alan Dukes, a former Fine Gael leader, said: "We don't talk about customers in public."
Up to six senior bank executives will be questioned by the Garda Fraud Squad as part of the investigation into financial irregularities at the bank. More arrests are expected in the coming weeks as the investigation, the biggest of its kind, focuses on the transfer of €7.45bn to Anglo from Irish Life & Permanent in September 2008. The deposit bolstered Anglo's weakening balance sheet during financial turmoil on the last day of its financial year.
Detectives have identified six executives in both banks to find out who authorised the transfer and who knew about it, according to sources.
Mr FitzPatrick was the first to be questioned at length about the transaction at Bray garda station near his home in Greystones before he was released without charge.
More executives are expected to be interviewed by detectives before a file is sent to the Director of Public Prosecutions. It is understood that Mr FitzPatrick has maintained that he was a non-executive director at Anglo during the period under investigation and, as a result, was not involved in making executive decisions concerning the day- to-day running of the bank.
Detailed statements have been taken from 100 staff at both banks, in which they outline their knowledge of the sequence of events relating to the €7.5bn transaction. But investigators have received more than one version of events and some accounts of what happened are disputed by those involved.
The fraud squad searched Mr FitzPatrick's house last Thursday for material and correspondence that could verify what they have been told about the events that led to the transfer.
It is believed that no "smoking gun" was found.
Gardai will review the case this week before deciding who else they need to speak to in the coming weeks. "It may become necessary to consider further arrests but they are not planning to do everything straight away," said a source.
Inquiries will also extend to the office of the Financial Regulator to examine claims that authorities were aware of the IL&P transaction.
Mr Fitzpatrick was said to have been shocked when he opened the door of his home in Greystones, Co Wicklow, to detectives at 6.15am on Thursday. But sources said he coped well with his detention and was described as being courteous and articulate.
A tactical decision was taken to arrest the former bank chairman at his home rather than invite him to the garda station by appointment -- as often happens in white collar investigations -- because detectives wanted to search the house and did not want to give the former Anglo chairman advance warning.
Sean FitzPatrick resigned as chairman of Anglo Irish Bank in December 2008 after it emerged that he had received €122m in director's loans over eight years, which were concealed from shareholders and the public.