Saturday 21 April 2018

Jurors stepped up to the mark as the scale of human drama unfolded and 'mob bayed for blood'

Did we really learn anything new from the trial of, from left, William McAteer; Sean Fitzpatrick and Pat Whelan
Did we really learn anything new from the trial of, from left, William McAteer; Sean Fitzpatrick and Pat Whelan
Sarah Stack

Sarah Stack

What did we learn from the 11-week-long trial of three Anglo Irish Bank executives?

In the broad scheme of things there were actually very few surprises.

The collapse of Anglo Irish Bank and Ireland's financial system – and the downfall of a swathe of senior figures in banking and regulation – had been well-documented.

However, what we did gain – and for the first time – was a sense of the human scale of the dramas and terror that unfolded in 2008.

The stories of Anglo executives chasing clients to the south of France and Portugal as part of a scheme to unwind secret share investments built up by former billionaire Sean Quinn caused some excitement in the early days.

It must have been a huge climbdown for the executives – people who would have been far more accustomed to having the big developers knocking on their door for the financial backing for projects.

Others listened intently to Mr Quinn's first-hand account of how he gambled his entire fortune on Anglo shares – and lost. They were the kind of insights that kept scores of onlookers flocking to courtroom number 19 in the Criminal Courts of Justice in the early days of the trial.

As it got into the nitty gritty of the specific charges before the court – and the facts, figures, faces and paper trails behind the Maple 10 and Anglo's loan for shares deal – public interest flagged.

But jurors stepped up to the mark.

Before the trial, fears were raised about the 15 Joe and Josephine Soaps, ordinary members of the public who work in shops, as secretaries, or, not at all.

There was concern they would never manage to understand the technicalities of a white-collar trial and detach themselves enough from public opinion to give three bankers a fair hearing.

But one thing the Anglo trial showed was that a jury – whittled down to 12 for deliberations – could sift through the evidence, examine and understand the difference between the charges and the Quinn and Maple 10 loans, and make reasonable findings.

By clearing Sean FitzPatrick – the most famous face of Anglo – it was obvious the five men and seven women had not satisfied the "baying for blood of the mob", as one defence barrister had pleaded.

The trial was also the first time a senior finance official spoke out, even if he had little to say.

As second secretary in the Department of Finance, Kevin Cardiff had held a key position at that extraordinary time when the country's finances went to hell in a handcart.

He knew of the scale of the Quinn family's holding in Anglo in early 2008, he admitted, and that the department was concerned enough to set up a high-level government steering group.

There was some lending to the potential "high-net-worth individuals", who became known as the Maple 10, he conceded.

"Likely to be short term", his notes read.

In stark contrast, the former Financial Regulator Patrick Neary revealed he had no concerns about Anglo less than a year before it was nationalised – even when its shares had plummeted in the so-called St Patrick's Day massacre.

Little did we know back on February 5, the first day the three co-accused stood in the dock, that business terms such as recourse, contracts for difference and CFDs would be rolling off the tongue.

The dreaded 'R' word appearing to be the reason William McAteer and Pat Whelan were convicted. Recourse on the Quinn loans had been 100pc – so they were liable to repay the lot if the share price collapsed; the Maple 10 just 25pc. They would owe a little more than €12m of the €45m borrowed if it all went wrong. And it did.

This, a former Ulster Bank board member said, was not a commercial transaction – and definitely not in the ordinary course of business.

It hit to the core of Section 60 of the Companies Act.

It emerged during the trial just how much time executives at the bank and regulators devoted to trying to address the problem of Mr Quinn's stake in the bank.

But his stake did not cause the collapse of Anglo Irish Bank. The reality was the bank was in trouble regardless of Mr Quinn because of the scale of its lending to buy overvalued property – much of it funded on the bond markets.

The hefty price it paid trying to keep Mr Quinn afloat – €2.4bn – just meant it sunk a bit quicker.

Anglo chiefs had embarked on five separate plans to try and unwind the Quinn stronghold, and were in crunch talks with potential investors in the Middle East, the United States and the Netherlands, before they turned their attentions to rounding up their top 10 customers.

And as for the Maple 10 – once dubbed Ten Heroes by Mr Whelan – we finally found out some of Ireland's biggest developers had made it to billionaire status before the bubble burst.

Dundrum Shopping Centre developer Joe O'Reilly told the trial that it was "hard to tell" if he was a billionaire, but others were a bit more willing to reveal their wealth.

Gannon Homes builder Gerry Gannon said "probably yes" when asked if he was worth up to €1bn, with Menolly Homes boss Seamus Ross agreeing he was also a billionaire, having built 16,000 homes during the boom.

And despite the rollercoaster of the past six years, now some of the boys are back in business again.

Irish Independent

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