Tuesday 21 November 2017

Regulator Pat Neary did little and remembered even less

Patrick Neary, the former Financial Regulator
Patrick Neary, the former Financial Regulator
Jerome Reilly

Jerome Reilly

HE was the forgetful Mr Neary, the man who trotted out a Rosary of "I can not recall," "I cannot remember" and "I have no recollection" in his two days of direct evidence at the Anglo trial.

He was the absent-minded Mr Neary, who kept few notes and who, when questioned about some key details of the final ignominious days of the Anglo meltdown, said they were "a complete blank".

The trial judge slammed the then Financial Regulator Patrick Neary for leading the Anglo Two "into error and illegality".

It was a damning assessment and one which set out with crystal-clear clarity the full scale of the lack of oversight in the nation's financial system in 2007.

Mr Neary, who should have been a lion protecting the financial system from the wolves, was a lamb guarding the chicken coop.

He was a regulator who admitted in direct evidence that he was reluctant to ask Sean Quinn about the size of his holding in Anglo because, in his own words, he didn't think it was "fair or appropriate" to tackle the tycoon about his investments.

It was this, as a defending barrister put it, "lack of curiosity" that was one of the major mitigating factors that led Judge Martin Nolan to conclude that it would be unjust to to send convicted ex-bankers Pat Whelan, 52, and Willie McAteer, 63, to jail for illegal lending to the Maple Ten investors.

Of course, Mr Neary's astonishing lack of recall during his evidence at the trial will not affect the generous pension package that he now enjoys. He received a €630,000 pay-off in 2009 and initially received an annual pension of €134,000, which has now been reduced to €114,000 as part of wider public pension reductions.

As Judge Nolan put it: "I find it incredible that red lights did not go off somewhere in the Regulator's office. I am totally surprised the Regulator did not give some warning."

The judge said Neary's attitude and behaviour had complicated sentencing, adding that he found it "incredible" that his office hadn't taken advice from colleagues in other agencies on the legality of Anglo lending money to buy its own shares to unwind Quinn's position in the bank.

Judge Nolan said during the hearing last week that Mr Neary seemed to have difficulty recalling vital events.

That was something of an understatement.

During two days of evidence Mr Neary said "I don't recall" 30 times and "I don't know" 23 times. There were also two dozen "I can't recalls" a handful of responses of "I have absolutely no recollection" and a plethora of "I can't, "I cannot," or "I don't" remember.

And there was that "lack of curiosity" when he met Sean Quinn in January 2008 when he was asked by defending barrister if he had brought up the issue of Mr Quinn's CFD (contracts for difference) position in Anglo Irish Bank.

Mr Neary replied: "Well I didn't – I didn't ask him straight up. I came about it in a way that there's talk you may have some CFD positions and he responded that he had CFD positions in Ryanair and in Anglo but they weren't very large and he didn't intend to hold them .

"Mr Quinn is entitled, as a private citizen, to have all the investments he wanted to have and I respect that and I didn't feel that it would be fair or appropriate for me to tackle a person about his own personal investment portfolio."

Nor did Mr Neary take notes of key meetings that took place in the run-up to the Anglo collapse, he admitted.

And he said in evidence that he could not recall the second of two meetings that he had with David Drumm, then chief executive of the bank, in the period shortly before meltdown.

Those meetings took place on September 12 and September 27, 2007.

The meetings between Mr Drumm and Mr Neary had been sanctioned by the worried board of Anglo when they were informed that Sean Quinn had amassed a 24 per cent shareholding in the bank in an indirect way through CFDs.

It was a situation that put the bank in peril and threatened the financial system.

Yet Mr Neary could not, in evidence, recall the second meeting with Mr Drumm on September 27, he admitted in evidence.

Mr Neary said he did not keep a note of that meeting.

Sunday Independent

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