“The loans were provided as part of the unwinding of an indirect 28 per cent stake in the bank amassed by Mr Quinn…”
Three former executives of Anglo Irish Bank, former chairman Seán FitzPatrick, former finance director Willie McAteer and former managing director of the bank in Ireland Pat Whelan, charged with “giving unlawful financial assistance to buy shares” have been sent forward for trial at the Irish Circuit Criminal Court. As the Irish Times report notes
The charges relate to loans provided by Anglo to a group of investors – ten customers known as the “Maple 10″ – and to the five children of bankrupt businessman Seán Quinn and his wife Patricia to buy shares in the bank.
The 10 long-standing customers are Paddy McKillen, Seamus Ross, Brian O’Farrell, John McCabe, Gerry Maguire, Patrick Kearney, Gerry Conlon, Gerry Gannon, Sean Reilly and Joe O’Reilly.
Anglo gave the loans to prop up its share price at a time the bank crisis was deepening and falling share prices raised concerns about the stability of financial institutions and encouraged customers to withdraw their money from the bank.
The loans were provided as part of the unwinding of an indirect 28 per cent stake in the bank amassed by Mr Quinn through a share instrument called contracts for difference (CFDs) over a period of several years which the bank was concerned was having a destabilising effect on the bank.
- Sean Quinn didn’t invest in Anglo Irish Bank, he bet on it
If all he’d done was buy shares, his losses would have been limited.
But Sean Quinn chose a dangerous financial instrument called Contracts for Difference (CFDs) to build up a 25% stake in Anglo Irish Bank.
It was a leveraged bet on the share price – if it his bet had come good, he would have made billions, but because it went bad he lost more than five times his initial huge stake.
He literally bet the bank and both bank and Quinn went down. His losses totalled more than 3.2bn euros at the end, with Anglo on the hook for 2.8bn euros.
- Anglo didn’t encourage Sean Quinn money to build this stake
Anglo Irish Bank was horrified when it discovered the scale of Sean Quinn’s stake because they knew they could both go down if the full story was public.
It was a fatal embrace. The reason some directors of Anglo now face criminal charges is because of money lent to unwind and offload Sean Quinn’s bet.
Even Sean Quinn has never publicly suggested that Anglo wanted him to build a 25% stake through CFDs in the bank.
- Sean Quinn broke the law before the bank moved in
Sean Quinn was removed from his insurance business by the regulator because he had broken the law.
He had used funds from his insurance business to prop up other parts of the group. It was a serious offence.
The regulator eventually put the entire business into administration because he found the Quinn management were still breaking the rules and there was a massive black hole in the finances. This happened a year before Anglo moved to take control of the rest of the empire.
Sean Quinn now accepts that the actions of the regulator were “right and proper”.
Meanwhile all insurance policies in the Republic are now subject to a 2% levy indefinitely to fill the financial hole found in Quinn Insurance.
Topic: Economy, Government, Society and Culture
Region: Global, Ireland, Northern Ireland
Leave a Reply
You must be logged in to post a comment.