Anglo: I had to mend fences between Drumm and Quinn – FitzPatrick
SEAN FitzPatrick was called on to "mend fences" between Anglo Irish Bank and Sean Quinn following a row over the loan-for-shares deal, a court heard.
The former chairman told gardai the Cavan businessman was threatening legal action within weeks of €650m being lent to 16 people to unwind Mr Quinn's secret stake in the bank.
The trial of three former executives heard Mr FitzPatrick was questioned five times over two days by fraud squad officers at Bray garda station in March 2010 over the transactions.
He was accused of not sticking to his non-executive role by meeting Mr Quinn after July 2008, replying that it had been "appropriate in exceptional circumstances" because the tycoon had fallen out with Anglo's then chief executive David Drumm.
"David's relationship with Quinn was at a bottom line.
"David and Sean Quinn had a difficult relationship post-transaction," he said.
"They had effectively fallen out and the only person David saw fit to talk to Quinn was me.
"David couldn't do it himself.
"My instructions were quite clear. Mend fences. Do not negotiate."
He and Mr Quinn had met before and were the equivalent in each other's companies, he added, saying he was "happy to help".
Mr FitzPatrick (65), from Greystones, Co Wicklow; former head of finance and risk William McAteer (63), of Rathgar in Dublin; and Pat Whelan (51), of Malahide, Co Dublin, deny 16 counts each of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in Anglo Irish Bank.
The deal involved unwinding Mr Quinn's 29pc holding, built up through contracts for difference (cfds), with loans to six members of the Quinn family and 10 high net worth Anglo clients, who became known as the Maple 10.
Mr Whelan, former head of lending (Ireland), also denies being privy to the fraudulent alteration of loan facility letters to seven individuals.
Memos of the garda interview notes from the three co-accused have been read into the record at the Circuit Criminal Court in Dublin, which has sat for 34 days of evidence.
Mr FitzPatrick was on holiday in the south of France on July 9, 2008, when he was called by Mr Drumm and told about "this scheme" to lend 10 customers money to buy 10pc of the Quinn position.
He was told he did not need to know their identities, he added, and did not know if the deal had helped to increase the share price in the bank.
The ex-banker told officers that Anglo's board had been trying to solve an "imperfect and dangerous" situation created by Mr Quinn for up to seven months and said he was "not insulted" that he was not informed of all the details of the deal by Mr Drumm.
"Suddenly he (Mr Drumm) came out and said we have got this solved," Mr FitzPatrick added.
"Why would I say, 'how dare you'? Why would I do that?"
Under cross-examination from Michael O'Higgins, senior counsel for Mr FitzPatrick, Sergeant Catharina Gunne of the Garda Bureau of Fraud Investigations confirmed the former chairman had answered every question asked of him and fully co-operated.
The barrister claimed this was in contrast to the "great vagueness" of other non-exec directors questioned.
The secretary to Anglo's board, Natasha Mercer, later told the court she was present at several board meetings in spring 2008 and had been aware of several plans to try to unwind the cfd position, including dribbling the shares on to the market and attracting long-term investors or a sovereign wealth fund in the Middle East.
She said Mr Drumm told board members back in March 2008 there was "a clean sheet with the regulator".
Ms Mercer said the placing of shares with individuals was never mentioned at any board meeting she attended, and that she only became aware of the loans for shares deal after she returned from her holidays at the end of July.
"There were discussions around long-term stockholders and short-term placements as well, but not any individuals," she added.
Judge Martin Nolan told the jury of seven men and seven women the trial should be finished in two weeks.
It will resume on Monday afternoon.