Business Irish

Saturday 17 November 2018

FitzPatrick not paying off €100m loan interest

> Monthly repayments are €400,000
> Pressure on Lenihan to act

Sam Smyth

DISGRACED former banker Sean FitzPatrick has failed to meet interest payments of almost €400,000 a month on loans of more than €100m.

The multi-millionaire banker defaulted on the loans following a series of major business setbacks, the Irish Independent has learned.

However, the money cannot be recovered from Mr Fitz- Patrick’s once valuable shareholding in Anglo Irish Bank, which is now worthless.

And Finance Minister Brian Lenihan may face the prospect of having to apply to the Commercial Court to seize Mr FitzPatrick’s extensive property portfolio.

However, it is unlikely the minister will be able to recoup money from Mr FitzPatrick’s personal assets. The former Anglo boss now finds himself on a collision course with Mr Lenihan, who has control over dealings between the nationalised bank and its former chairman.

An interim report from Anglo Irish Bank on March 31 this year revealed Mr FitzPatrick had loans of €106.8m, incurring interest charges of €397,500 a month.

Those figures are calculated on an interest rate of 4.5pc, which banking sources say is the lowest he could have negotiated for borrowing more than €100m.

In 2005, his annual salary of €2.6m made him the highestpaid executive in the country. In 2007, his personal wealth was estimated at €55m.

Mr FitzPatrick held some 4.5 million shares in Anglo at the time, valued at €80m, but these are now worthless. His total borrowings from Anglo in 2007 amounted to €122m, but these were reduced over the following year.

At the time of his retirement from Anglo Irish Bank last December, Mr FitzPatrick was reported to have a pension worth €25m.

However, sources said the value of his pension – like so many others – shrunk dramatically in the slump. Mr Lenihan will come under severe public pressure to ensure Mr FitzPatrick repays his massive loans to the nationalised bank.

Last December, he said the former Anglo chairman would have to repay the bank “every cent” of his borrowings. Mr FitzPatrick would not comment last night. “I’m not talking to the media,” he said.

Mr FitzPatrick’s fortunes have been badly rocked after a failed oil venture in Africa and a stake in a casino in Asia stalled. His property investments in Ireland and overseas were also hit by the international slump.

Mr Lenihan is said to be growing increasingly frustrated at delays in separate investigations into Anglo. Speaking on RTE’s ‘Prime Time’ on Tuesday night, he insisted he “wanted to see bankers in prison”.

Mr Lenihan would have to approve any attempt by Mr Fitz- Patrick to reschedule or renegotiate his loan repayments. The minister can take personal control of dealings between Mr FitzPatrick and Anglo following a “relationship framework” accord agreed with the bank in July.

The agreement gives the minister ultimate authority if the bank is “entering into or varying any transaction or agreement between a director or former director”.

Concealed Gardai and the Office of Corporate Enforcement are investigating the circumstances of how the loans made to Mr FitzPatrick and other directors were concealed.

The Irish Independent has learned Mr FitzPatrick has yet to be formally questioned by the Garda Bureau of Fraud Investigation.

He is likely to be among the last people interviewed as part of the inquiry, which will stretch into next year. In a letter to an Oireachtas Committee, Paul Appleby, the Director of the Office of Corporate Enforcement, said the circumstances surrounding the concealment of directors’ loans suggest “illegality”.

A spokesman for Anglo Irish Bank refused to comment on the revelation last night. He said the bank would not discuss its business arrangements with individual customers. “The bank is bound by obligations of customer confidentiality,” he added.

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