Thursday 14 December 2017

'Maple 10' developers are named in court

Donal O'Donovan

Donal O'Donovan

THE 10 developers given loans by Anglo Irish Bank in 2008, allegedly so that they would buy shares in the bank, were named in court for the first time yesterday.

Investigators believe a total of €1.1bn in loans was advanced to 16 borrowers, including family members of business tycoon Sean Quinn, under the deal.

All 16 were officially named in the Dublin District Court.

Anglo is alleged to have loaned money to 10 of its biggest property developer customers so they would, in turn, buy shares in the bank.

It was all allegedly an unsuccessful attempt to prevent the price of the bank's shares from collapsing. It is illegal for a company to use its own money to support its share price, save in certain limited circumstances.

The 'Maple' deal was allegedly put together after top executives at Anglo discovered that businessman Sean Quinn had made a massive punt on Anglo shares, and it was rapidly going sour.

Today Sean Quinn is bankrupt and his son is in jail, but at the time he was the country's richest man. Anglo discovered that Quinn had secretly amassed a 28pc stake in the bank through under-the-radar trades in financial products called "contracts for difference" (CFDs).

Quinn's CFDs were a massive gamble. If Anglo's shares rose, the businessman would be able to buy them cheaply at a low price agreed well in advance and then sell at a profit.

But Quinn's trades had been a financial disaster, leaving him facing a loss of as much as €2bn.

There were fears he would be forced to sell the shares on the open market at rock bottom prices. That would undoubtedly panic other investors, and wipe out the remaining value of the bank stock.

The charges levelled against former Anglo executives Willie McAteer and Pat Whelan relate to allegations that the bank's action to protect the share price included putting more than €1bn of the bank's own money to work on a solution.

Authorities

Anglo managers are alleged to have approached the Maple 10 -- all major customers of the bank -- and loaned them €45m each to buy shares from Sean Quinn. An even bigger loan, of €650m, was made to the Quinn family which was used to purchase the remaining 15pc of shares held through the CFDs.

Anglo insiders have always argued that banking authorities were well aware of everything they did in relation to the shares.

They also argue that the loans were only ever supposed to be temporary, short-term deals to get the shares off the market.

Six members of the Quinn family were also named in court -- Sean Quinn jnr, who was jailed last week; his mother Patricia; sisters Colette Marie, Aoife, and Ciara; and brother Brendan. All had shared a €650m loan from Anglo.

Irish Independent

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