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Monday 20 November 2017

Prosecutions in Anglo 'inevitable'

FINANCE Minister Brian Lenihan has told the Sunday Independent that prosecutions are inevitable in the Anglo Irish Bank debacle.

“I believe there will be prosecutions in relation to what happened in Anglo Irish Bank, but it is not a matter for me, it is a belief of mine,” he said.

“That will be a matter for the DPP when the appropriate files are finalised by the gardai and the Office of Corporate Enforcement. But I am satisfied the authorities are now engaged in a very wide ranging and productive inquiry on these matters.”

And in a major blow to taxpayers, Anglo, which is to announce losses of over €13bn, will not now be wound down because it is “too big to fail”, Mr Lenihan declared. He said that “half the bank will disappear into Nama and the remaining half then is being worked through by new management.”

The news about Anglo comes as the Sunday Independent has learned that AIB, the State’s largest bank, will transfer loans worth between €22bn and €24bn belonging to 18 individual developers later this month to the assets agency Nama.

It is thought that a number of these 18 people are also included in the Anglo group of 10 developers who will see their loans transferred in a “matter of weeks”.

In further bad news, the investigation into the goingson at the bank before its nationalisation is still “many months” from conclusion, the minister said.

Speaking to the Sunday Independent, Mr Lenihan said while Anglo was to be substantially reduced in size, given the size of the loans being transferred to Nama — about €33bn worth — it was too big too fail.

“It is going to be halved in size as a result of Nama, and that will result in a dramatic reduction of the risk that the institution posed to the whole financial system of the State.

And the great difficulty with Anglo is that it was too big to fail in terms of Ireland.

“Our problem with Anglo is that its balance sheet was very large, it was probably nearly half of our annual national wealth and clearly if you let an institution like that fail the ripple effects to the credit of Ireland and the credit of the banking system are enormous,” he continued.

He also said that it was essential that the taxpayer gets something out of what he described as “this morass”.

In relation to the likely increases in mortgage rates, Mr Lenihan said it was unfortunate but unavoidable.

“With regard to the interest rate increases announced, and those likely to come over the course of the year, it is of course unfortunate, but the fact is that these increases reflect market realities, which include the increased cost of accessing funds,” he said.

However, Mr Lenihan, who previously criticised the delay in the various investigations into the goings-on at Anglo, admitted that although it was now 18 months since the bank guarantee and 14 months since the bank was nationalised, there were still several months left before the investigations would be concluded.

He said: “The Director of Corporate Enforcement Paul Appelby has stated that the Garda Bureau of Fraud Investigation and Office of the Director of Corporate Enforcement investigations are proceeding satisfactorily.

“He has stated that it is not possible to put a timescale on the completion of his office’s investigations. Several months’ work lies ahead.”

Meanwhile, following its announcement of €2.6bn losses last week, AIB is to roll out a mass redundancy programme later this year.

Sources at the bank and at Bank of Ireland have said that, in total, both banks would seek to reduce their workforce by between 3,000 and 4,000.

However, the issue is complicated because there is sizeable pressure coming from Government not to put highly skilled people out of work at a time when unemployment figures are at topping 435,000.

Concern has been raised over the foreign assets that are to be taken over by Nama.

It has emerged that one-fifth of the assets being transferred are in the United Kingdom and are worth about €11bn.

The vast majority of those loans are in the London area.

Developer Sean Mulryan, of Ballymore, has bought huge tracts of property in the London docklands area which will be a focal point for the 2012 Olympic Games, while Johnny Ronan and Richard Barrett have bought significant development properties in London, including the €500m purchase of the landmark Battersea Power station through their companies REO and Treasury Holdings.

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