Friday 23 March 2018

Executive refused to sign documents for Maple 10

Lorcan McCluskey: letters
Lorcan McCluskey: letters
Sarah Stack

Sarah Stack

A FORMER Anglo Irish Bank executive says he refused to sign documents destined for the Maple 10 that would have put the lender at even more risk if share prices collapsed.

Lorcan McCluskey said he was approached by senior management three months after multi-million-euro loans for shares were approved to amend terms of the loan in back-dated letters.

The former associate director of lending even kept the written instruction from Pat Whelan as evidence to show neither he nor his line manager, Michael O'Sullivan, created the removal of 25pc recourse on loans.

The significant change meant that instead of being on the hook for 25pc of the loan, even if the shares declined in value, the borrowers would have been able to walk away from any losses.

Mr McCluskey said that he believed the change to limit liability to the value of the shares at the end of the loan period "created a situation where if the share price went to zero there was no recourse".

"Michael (O'Sullivan) told me he had been told by Pat (Whelan) it had been approved by the CEO and the board of the bank," he said. "I said 'that's okay' but I refused to sign it."

Mr McCluskey said the letter – dated July 17, 2008 – was ultimately signed by Mr O'Sullivan and Mr Whelan, managing director of lending in Ireland.

The former executive had no more dealings with the Maple 10 until January 2009 when new documents – reinstating the recourse – were issued following a "high-level review" of large loans by non-executive directors.

Mr McCluskey was originally told on July 10, 2008, about the bank's plan to unwind 10pc of stock held by the Quinn Group by giving 10 individuals 1pc each. He was told to prepare 10 identical loan facility letters in a precise format for €60m each, including that the borrowers were liable for 25pc if the shares collapsed.

"It never happened before and never happened since, so it's very unusual," he said about the 10 letters.

Mr McCluskey said it was March 18 when he became aware of the full extent of Sean Quinn's stake in the bank. He was at the St Patrick's Day parade in Dublin when he was allegedly called by Mr O'Sullivan to go to the office immediately where was met by William McAteer because the Quinn Group had "to make the margin call".

"The request was to arrange the transfer of €20m to Bank of Scotland in Edinburgh," he said.

Irish Independent

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