Tuesday 25 September 2018

Ex-Anglo boss to be sentenced for 'Maple 10' loans

Former Anglo Irish CEO David Drumm leaves the Criminal Courts of Justice. Photo: Tony Gavin
Former Anglo Irish CEO David Drumm leaves the Criminal Courts of Justice. Photo: Tony Gavin
Shane Phelan

Shane Phelan

Former Anglo Irish Bank chief executive David Drumm is to be sentenced today for providing unlawful loans to a group of businessmen known as the 'Maple 10'.

Judge Karen O'Connor will pronounce sentence at Dublin Circuit Criminal Court having yesterday heard a plea of mitigation from Drumm's defence counsel.

Drumm (51), from Skerries, Co Dublin, is already serving a six-year sentence for false accounting and a €7.2bn conspiracy to defraud.

Last month, he pleaded guilty to 10 charges of giving unlawful financial assistance to the 10 businessmen so they could buy shares in the bank during the 2008 financial crisis.

Judge O'Connor heard evidence the loans were given to unwind a massive secret stake Sean Quinn had built up in the bank using financial instruments known as contracts for difference (CFDs).

These allowed Mr Quinn to bet on the performance of the shares without actually owning them, but in reality he effectively had a 25pc stake in the bank.

Under examination from prosecution counsel Paul O'Higgins SC, one of the investigators, Detective Sergeant Brian Mahon, agreed that after Drumm learned of the scale of the CFD position there was concern within Anglo it would affect the stability of the bank's share price. Drumm made efforts to find buyers for the shares in the Middle East and the US.

But when none could be found, a scheme was arranged where Anglo issued loans to Quinn family members to buy a 15pc shareholding and to 10 wealthy clients of the bank to buy the remaining 10pc.

Det Sgt Mahon said that although paperwork was handled by Anglo staff, the transactions were instigated by Drumm, who he described as being "at the helm" of what had occurred.

A total of €451m in loans were issued to the so-called 'Maple 10' to buy the shares. There is no suggestion any of them did anything wrong.

After a previous trial over the loans, two other former Anglo executives were sentenced to 240 hours' community service.

The judge in that case found the financial regulator had "led them into error and illegality".

Defence counsel Brendan Grehan said the court did not have the option of sentencing Drumm to community service, but asked Judge O'Connor to take cognisance of the sentence in the previous case.

The defence counsel also asked the judge to given Drumm "full allowance for his plea of guilt".

Irish Independent

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