Seán FitzPatrick fined €25,000 and banned from practicing as a chartered accountant
Former Anglo Irish Bank chief Seán FitzPatrick was fined €25,000 and banned from practicing as a chartered accountant at a professional tribunal today.
Mr FitzPatrick (71) was not present for the long-delayed hearing of the Chartered Accountants Ireland Disciplinary Tribunal. It had been postponed for eight years pending the outcome of various criminal proceedings connected to Anglo's unravelling a decade ago.
Led by a retired Northern Ireland judge, Tom Burgess, the three-member panel heard that Mr FitzPatrick accepted he had violated the accountancy profession's standards through "the concealment of loans" totalling up to €122.2m in 2007.
The maximum fine that could have been imposed on Mr FitzPatrick was €30,000.
Michael Staines, a solicitor representing Mr FitzPatrick, told the tribunal that his client "indicated to me it would be difficult to pay even the sum of €20,000", the amount offered to the tribunal.
"He's now out of bankruptcy but he has very little money," Mr Staines said. "He would be at the pin of his collar and it would be difficult, this amount."
But in his judgment, Justice Burgess said Mr FitzPatrick "fully accepts the factual basis set out in the report which supports this complaint, namely the concealment by temporary transfer by [Mr FitzPatrick] at the year-end of Anglo Irish Bank to Irish Nationwide Building Society of loans made to Mr FitzPatrick personally by Anglo".
Justice Burgess said this concealment ran from 1999 to 2007 and involved 11 bank facilities involving 91 accounts holding, in the final year of the scheme, funds totalling €62m, £14m and $56m, equivalent to €122.2m at the time.
"These transactions had the sole purpose of benefiting Mr FitzPatrick's interests in his personal capacity," Justice Burgess said.
"The setting up of the scheme each year became what employee described as, and I quote, 'kind of just a formality'. In short it became embedded as a routine as the year-end of Anglo approached," he said. "There was no disclosure of this scheme at any time over that nine-year period to the board, in particular to the non-executive directors of Anglo, or to its auditors, evidencing in our opinion a clear intention by Mr FitzPatrick to hide certainly the extent of the loans which had been made to him - a senior director - and potentially the number of such personal loans."
Mr Burgess said Mr FitzPatrick had "acknowledged his activities represented the failure to meet professional standards, which he accepts are paramount".
"Indeed on different occasions he had emphasized - arguably hypocritically - that the bank had 'consistently pursued the highest standards of conduct in the management of its business', 'that the bank operated to the highest ethical and governance standards', and that he as chairman promoted the continuing high standards of corporate governance.
"Instead we regard his activity as a willful failure to adhere to and promote those very standards with little or no regard for its consequences to others," Justice Burgess said. "The fundamental principles of accountancy are integrity, objective professional competence and due care, confidentiality and professional behaviour.
"We conclude that Mr FitzPatrick fell far short of complying with each of those principles. Instead we have concluded his failures involved a number of aggravating features. The scheme was sophisticated, deliberate, self serving and prolonged. It involved substantial amounts which could inform in a material way the financial affairs and governance of Anglo."
Justice Burgess noted that Mr FitzPatrick's acceptance of charge of loan concealment had allowed the tribunal to avoid spending considerable time exploring two other charges against him. These two unidentified accusations were dropped.
He said the panel considered Mr FitzPatrick's acceptance of the charge of loan concealment "inevitable" given "that the case against him is extremely strong".