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Senior staff at Anglo struggling to repay loans worth millions

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Anglo Irish Bank's executive chairman Donal O'Connor passes
two gardai as he left Leinster House yesterday

Anglo Irish Bank's executive chairman Donal O'Connor passes two gardai as he left Leinster House yesterday

Anglo Irish Bank's executive chairman Donal O'Connor passes two gardai as he left Leinster House yesterday

SOME senior staff at Anglo Irish Bank who borrowed millions from the bank to buy properties and shares are now unable to repay the loans, the lender's executive chairman revealed yesterday.

Donal O'Connor said the bank had written off these loans to senior staff and directors and they would now have to be repaid by the taxpayer.

Mr O'Connor was speaking at the Oireachtas committee on finance and public service, where he said some of the senior personnel were now struggling to pay their debts.

He said the bank was now trying to recover the loans from its employees.

The managers are not getting any special treatment, Mr O'Connor insisted, but he declined put a value on the outstanding loans to staff.

The news follows the bank's admission last month that it had written off loans to former directors worth €31m.

The taxpayer, who has owned Anglo since January, is now being asked to inject at least €4bn into the bank to help pay for the write-downs to former directors, current directors and senior staff, as well as loans to developers.

"Not only were they lenders; they became players in the property market themselves," Labour Party finance spokeswoman Joan Burton said following the revelations.

Anglo was nationalised in January, a month after it emerged that former chairman Sean FitzPatrick had engaged in a practice over eight years of hiding up to €122m of bank loans from shareholders by temporarily transferring them to Irish Nationwide.

It subsequently emerged that Irish Life & Permanent had placed a controversial €7.5bn deposit with Anglo last September, which served to flatter the bank's financial position.

The bank was further rocked in February by revelations that a circle of 10 of Anglo's developer clients had bought a 10pc stake in the bank in a secret deal, funded by €431m of loans from the group. All three episodes are the subject of a number of investigations.

Preferential

Mr O'Connor declined yesterday to describe what the bank is doing to ensure that its top brass are treated like everybody else. The bank's interim accounts revealed last month that the bank lent €4m "on preferential terms" to a senior executive in the US to buy a house in Boston.

The bank will take back the house and book a loss of €1.2m on that deal.

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The failure to discuss the mechanisms in place provoked a rare show of cross-party unity, with TDs of all parties calling on Mr O'Connor to answer questions in more detail.

Anglo was run like "a back-street handout shop", Fine Gael TD Sean Barrett said angrily.

Anglo will soon get a new chief executive and Finance Minister Brian Lenihan is currently examining a new business plan for the bank which will lead to "lots of change", Mr O'Connor said.

He again declined to give details but expressed the hope that "new leadership" could help turn Anglo into a "viable, efficient, respected bank".

Mr O'Connor emphasised several times that big developers would be treated just the same as other clients despite their political connections.

Mr O'Connor declined to comment on reports in the 'Sunday Independent' which suggested former chairman Sean FitzPatrick has deposits of €23m at the bank which cannot be touched, despite Mr FitzPatrick's debts to the bank of €106m.

Mr O'Connor cited client confidentiality.


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