Ex-watchdog on rumours, informal meetings and lack of notes
ON September 11, 2007, businessman Sean Quinn revealed to David Drumm, chief executive of Anglo Irish Bank, that he had built up a 24pc stake in the bank using contracts for difference (CFDs).
The revelation, at the Ardboyne Hotel in Navan, "horrified" Sean FitzPatrick, Drumm's predecessor who was then the bank's non-executive chairman and who accompanied Mr Drumm to the crunch meeting.
Market rumours and media reports were circulating widely at the time, suggesting Quinn held more than 10pc of Anglo through CFDs.
Drumm thought it might have been "in the teens," but was – according to Liam McCaffrey, former CEO of the Quinn Group who also attended the meeting – concerned and somewhat surprised at the extent of Quinn's stake.
Such was the concern, Drumm was directed immediately by the board of Anglo to tell Financial Regulator Patrick Neary, the trial of three former executives has heard.
The jury has heard Mr Drumm met Mr Neary – then CEO of the Irish Financial Services Regulatory Authority (IFSRA) – the next day, September 12, 2007.
They apparently met again on September 27, 2007, but Mr Neary says he has no recollection of this meeting.
"That's a complete blank to me," Mr Neary told Dublin's Circuit Criminal Court yesterday.
Mr Neary said he recalled a meeting with Mr Drumm in autumn 2007. However, he did not keep a note or record of this meeting.
The jury heard the meeting arose after Anglo's then CEO issued a "low-key" request for a "special meeting of a personal nature".
"Mr Drumm had something to convey to me that was personal in nature," he told Michael O'Higgins SC, who is representing Mr FitzPatrick.
When Mr O'Higgins asked if the something of a personal nature meant something like trouble at home or where to go on holidays, Mr Neary replied: "It allowed for that possibility."
Mr Neary, who said he did not normally meet chief executives of banks, explained that he got the impression that Mr Drumm wanted to convey something personal, something of an informal nature.
This prompted Mr O'Higgins to ponder if a 24pc stake in a bank was an informal matter.
According to Mr Neary, who says he first knew of the scale of Mr Quinn's stake on March 21, 2008, the men discussed the rumours about the Quinn control at the autumn 2007 meeting, but Mr Neary said Drumm did not tell him that it was as high as 24pc.
Neither did Sean Quinn when he had an informal meeting at the regulator's office in January 2008.
The two men met alone and no notes were taken.
"You almost make it sound as if he [Quinn] was coming up from the country that day," said Mr O'Higgins, who wondered why Mr Neary did not ask Mr Quinn outright how much of a stake he held in the bank.
"I didn't ask him (Quinn) straight up," Mr Neary explained to Brendan Grehan SC, representing former Anglo director Pat Whelan.
Mr Neary said that he didn't ask Mr Quinn about the extent of the CFD position he had built up in Anglo because it was not appropriate to "tackle" a private citizen about their personal investment portfolio.
Quinn was a private citizen, Mr Neary said, who "can have all the investments he wants".
A year later, Anglo was nationalised.
The trial continues.