Wednesday 21 March 2018

Anglo must reveal what managers told directors

Dearbhail McDonald Legal Editor

THE High Court has ordered Anglo Irish Bank to disclose what managers were telling its directors as the share price plummeted.

The documents and minutes of meetings, detailing the activities of managers who reported to directors in between scheduled board meetings, must be handed over to the bank's former head of lending.

Last Monday Anglo sought clarity from the Commercial Court about the categories and scope of documents it must give to Tom Browne, a former bank director who it is suing for €50m.

A trial date of November 15 next has been fixed by High Court judge Mr Justice Peter Kelly for the legal action against Mr Browne who claims that various loans were issued to directors and officers within the bank with the object of artificially enhancing the bank's share price.

Anglo and Mr Browne are set to exchange crucial documents and witness statements ahead of the November civil action.

Granting access to material generated by managers immediately beneath the board of directors, Mr Justice Kelly told the bank's lawyers on Monday that the board of Anglo did not have material "magicked up" to it.

He said that the share price at Anglo would have been under consideration on a daily basis at the lender and there would have been many individuals, who were not directors or senior managers, who would have been involved in the preparation of material for the directors of the bank in between scheduled meetings.

Mr Browne has served Anglo with a series of interrogatories -- questions that must be answered by the bank -- in advance of the trial which is expected to last for three weeks.

Mr Browne received €8.19m in salary and benefits from Anglo while head of lending between 2005 and 2007.

Anglo is seeking to recover €50m from over loans secured on Anglo shares and a number of property investments.

He has counterclaimed that the €50m loans are impaired due to alleged fraudulent misrepresentation by Anglo via its "silence" in the last three months of 2007 over loans to businessman Sean Quinn and other matters relevant to its share price.

The Director of Public Prosecutions (DPP) has received four partial files on five key issues that are being investigated by the Office of the Director of Corporate Enforcement and the garda fraud squad to complete their inquiries into Anglo.

Earlier this year the Chartered Accountants Regulatory Board (CARB) adjourned public hearings involving former Anglo chairman Sean FitzPatrick following a request from DPP James Hamilton.

Mr Hamilton expressed his concern that the holding of public hearings and the publication of findings might prejudice future criminal proceedings in the event that a prosecution is directed against any party arising from the investigations of the joint criminal probe.

Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business