Anglo executive's 'complete shock' at Quinn stake
A FORMER Anglo Irish Bank executive has told the Circuit Criminal Court that he was "in complete shock" when he was told in November 2007 that Sean Quinn had built up a "substantial" position in the bank using Contracts for Difference (CFDs).
Michael O'Sullivan, who was a divisional director of lending in 2008, said the existence of the Quinn stake was outlined by the bank's former CEO David Drumm at a meeting attended by Mr O'Sullivan and another Anglo executive Pat Whelan.
"It was a complete surprise, it wasn't something I expected," said Mr O'Sullivan who was involved with "the Quinn relationship" at Anglo.
Mr O'Sullivan is giving evidence this afternoon in the trial of three former Anglo executives.
The bank's former chairman Sean FitzPatrick, 65, from Greystones, Co Wicklow, former chief risk officer William McAteer, 63, from Rathgar in Dublin and 51-year-old Pat Whelan, from Malahide, in Dublin, have all pleaded not guilty to 16 charges of unlawfully providing financial assistance to individuals for the purpose of buying shares in Anglo Irish Bank in 2008.
Mr Whelan also denies seven charges of being privy to the fraudulent alternation of a loan facility letter.
Earlier, another Anglo Irish Bank executive denied any negligence in the issuing of documents to the borrowers now known as the Maple 10.
Lorcan McCluskey alleges he was ordered to prepare updated facility letters three months after multi-million euro loans for shares were approved amending terms of the loan.
He told the trial of three Anglo executives that hand written instructions on the letter were penned by his line manager, Michael O'Sullivan, and Pat Whelan, then head of lending for Ireland.
Under cross examination, Mr McCluskey was question if the issuing of fresh facility letters should have been his job when less money than originally agreed was drawn down for the shares in July 2008.
"I don' think there is any negligence here on my behalf," said the former associate director of lending.
"There is no need to be so defensive," replied Brendan Grehan, senior counsel for Pat Whelan.
It is alleged the high-profile investors were approached as part of the bank's plan to unwind 10pc of stock held by the Quinn Group.
Each agreed to EURO 60m loans, but just 45m euro was drawn down to cover the cost of the shares.
Mr McCluskey was questioned over the contents of a letter - drafted in October 2008 but back dated to July 17 2008 - which removed that the borrowers were responsible for 25pc recourse.
This meant instead of being liable for a quarter of the loan, even if the shares declined in value, the borrowers would have been able to walk away from any losses if they continued to fall.
He yesterday told the jury at the Circuit Criminal Court in Dublin that he has refused to sign the letter, which was ultimately signed by his line manager Mr O'Sullivan and Mr Whelan.