Friday 24 November 2017

Officials told of Quinn's Anglo bet in early 2008

Department knew of shares disaster five months before it was dealt with

Tom Lyons

THE State's powerful Domestic Standing Group (DSG), a low-profile group made up of senior officials from the Department of Finance, Central Bank and the Financial Regulator, was first told about Sean Quinn's catastrophic punt on Anglo Irish Bank shares at the end of February 2008, the Sunday Independent can reveal.

This means the department knew about the unravelling Quinn disaster five months before the matter was dealt with in controversial circumstances on July 14 of that year – when 10 clients of the bank and Quinn's children took over the tycoon's massive bet on the bank.

It has also emerged that senior civil servants in the department met with the Financial Regulator in 2008 to discuss Quinn on July 8 and July 23 – or about a week either side of the transaction.

The Quinn family plans to try and discover any notes or documents from these meetings as part of its legal action to find out who at the highest level of the State knew what and when about the father's gamble on Anglo.

The DSG, which is chaired by the Department of Finance, specifically called its first meeting in February 2008 to discuss Quinn amid fears that Anglo's falling share price might lead to a bank run and destabilise Ireland's entire banking system. Subsequent meetings held on a monthly basis also discussed Quinn.

At a July 8 meeting, the department met the regulator and the Central Bank to discuss Quinn and the fact that a plan was in the offing by Anglo to deal with him was flagged but not in detail.

On July 14, 10 clients of Anglo, as well as the Quinn family, took out Sean Quinn's position in the bank, which by then was greater than 28 per cent. After this happened, Con Horan, the head of prudential supervision in the Financial Regulator, rang Kevin Cardiff, a senior civil servant in the Central Bank, to say the matter was dealt with.

A meeting took place to discuss what happened on July 23. This time, the deal was outlined in broad sweeps but it is understood not in full detail. Cardiff kept notes of his various meetings. The Quinn family plans to try and obtain these notes and other documents if it is successful in joining the department to its legal action against the in-liquidation IBRC, formerly Anglo Irish Bank.

An affidavit by Aoife Quinn in relation to this claim alleges it was "simply inconceivable" that the Finance Minister was not fully aware of the actions of Anglo and the regulator to unwind Quinn's contract for difference positions in Anglo shares.

This affidavit also produces an email dated July 9, 2008, where David Drumm, the bank's then chief executive, tells a colleague that the regulator has been "squared", in relation to Quinn.

Drumm, when asked how the then Financial Regulator Patrick Neary reacted to the news, said in an email: "Excited, I would say – I think he is lying awake at night like the rest of us."

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business