Former Anglo chiefs forced to come clean
TOP BANKERS Sean FitzPatrick and David Drumm will be forced to come clean in public for the first time about key decisions that led to the collapse of Anglo Irish Bank.
The bank's former bosses can now be legally compelled to give evidence about their activities. And they face a lifetime ban from working as accountants in high finance if they can't explain why certain deals took place.
They will be hauled before an accountancy watchdog tribunal after the Chartered Accountants Regulatory Board (CARB) ruled they had questions to answer about their roles as Anglo's former chairman and former chief executive.
It comes as the Director of Public Prosecutions considers the first garda files on controversial transactions at the rogue lender.
The taxpayer is facing a bill of up to €34bn for saving the bank, even though it is due to be wound down over coming years.
A CARB investigation -- headed by former Comptroller and Auditor General John Purcell -- yesterday disclosed that Mr Drumm would have to explain his role in:
- The transfer of €87m of loans by his colleague Sean FitzPatrick over almost a decade.
- Deposits that went between Anglo Irish and Irish Life & Permanent (IL&P) during a key period in 2008.
- Changes made to loans given to a so-called 'golden circle' of developers to buy Anglo shares.
- Loans given to four 'key' managers.
- A loan given to former chief financial office Willie McAteer in 2008.
For his part Mr FitzPatrick has been asked to explain his role in:
- The temporary transfer of his own loans over an eight-year period and non-disclosure of this in Anglo's books.
- Transactions between IL&P and Anglo during 2008, at the height of the financial crisis.
- A loan given to Mr McAteer in 2008.
However, crucially for Mr FitzPatrick, he has not been found to have any case to answer in relation to the 'golden circle' loans, which were used to purchase a 10pc stake in Anglo controlled by businessman Sean Quinn and family.
Most of these loans given to "loyal" Anglo customers have not been repaid, costing the taxpayer €300m to date.
Separately, Mr McAteer, a former chief financial officer at Anglo, has been asked to explain his role in three transactions, including Mr FitzPatrick's loans and a loan Mr McAteer took himself.
The fourth banker facing questions is Peter FitzPatrick, the ex-finance director of IL&P, who will have to give answers on the movement of money between the two institutions in 2008.
He was not available, like the others, for comment yesterday.
The Irish Independent understands that Mr FitzPatrick will strongly contest any suggestion that he organised or gave permission for either the golden circle loans or the deposits that went between Anglo Irish and IL&P in 2008.
He has admitted, however, since December 2008, that he moved his own loans out of Anglo each year and into another institution, Irish Nationwide.
The hearings to take place in April are likely to involve witnesses from the world of banking and property.
Mr Drumm and Mr FitzPatrick may be confronted by former colleagues of theirs from Anglo.
The sanctions against those found to have broken the rules set down for chartered accountants are a fine of up to €30,000 and "exclusion'' from the profession, possibly for life.
This would hit both men hard, but particularly Mr Drumm, who is trying to re-build his career in the US.
Any ban in Ireland is likely to have a major impact on his ability to get work in the US, where he currently does some advisory work.