Former Anglo CEO David Drumm to be sentenced today for providing unlawful loans to Maple 10
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.
Last month Drumm (51), from Skerries, Co Dublin, pleaded guilty to ten charges of giving unlawful financial assistance to the businessmen to buy shares in the bank during the 2008 financial crisis.
Some 21other charges he had been facing were withdrawn following the guilty plea.
A sentencing hearing is scheduled to get underway before Judge Karen O’Connor at Dublin Circuit Criminal Court this morning.
Drumm is already serving a six-year prison term in Mountjoy for his role in a €7.2bn conspiracy at Anglo.
A jury found him guilty of conspiracy to defraud and false accounting in June following a lengthy trial. He had denied the charges.
In the Maple 10 matter, he has admitted authorising or permitting Anglo to give unlawful financial assistance for the purchase of shares to Brian O’Farrell, Gerard Conlon, Gerry Gannon, Gerard Maguire, John McCabe, Joe O’Reilly, Paddy Kearney, Paddy McKillen, Seamus Ross and Sean Reilly on dates in July 2008.
There is no suggestion any of the ten investors did anything wrong.
The loans were part of a scheme designed to unwind a secret 25pc stake businessman Sean Quinn had built up in the bank using financial instruments called contracts for difference (CFDs).
Using CFDs, Mr Quinn bet on the performance of shares without actually owning them. But in reality he had built up a 25pc stake in the bank worth around €2bn.
He shipped heavy losses as Anglo’s share price fell and there were concerns a disorderly unwinding of his stake could destabilise the share price even further.
This ultimately led to a plan where the Quinn family would buy the majority of the shares, but Anglo had difficulty finding buyers for the remaining shares.
It was eventually decided to approach ten wealthy clients who were offered loans totalling €450m to buy the shares.
Following a previous trial on the Maple 10 issue, former Anglo directors Pat Whelan and Willie McAteer were both sentenced to 240 hours community service.
Former Anglo chairman Sean FitzPatrick was cleared of charges.