Anglo Irish Bank chased clients to the south of France and Portugal in an €800 million (£660m) deal to unwind secret share investments built up by former billionaire Sean Quinn, a court has been told.
At the opening of a trial in Dublin of three ex-bankers for the alleged unlawful provision of loans for the purchase of shares in 2008, a jury heard investors were sought out in the US, the Middle East and the holiday destinations of Nice and Faro.
Sean FitzPatrick, 65, the former chairman and one-time chief executive of Anglo, former chief risk officer Willie McAteer, 63, and former managing director of lending Pat Whelan, 51, face a total of 16 charges each in relation to the lending.
They pleaded not guilty to providing unlawful financial assistance to individuals in July 2008 for the purchase of shares in the bank. Whelan faces a further seven charges of being privy to the fraudulent alteration of loan facility letters to seven individuals. He pleaded not guilty.
Dublin Circuit Criminal Court was told that Anglo created a plan to lend money to the Quinn family and a so-called “Maple Ten” of high net worth clients, mostly developers and including Belfast-born businessman Paddy McKillen, to buy up the secret Quinn shareholding.
Paul O’Higgins, senior counsel for the state, revealed the original plan to unwind the position was thought to cost €800m but as the share price fell it ultimately involved €450m being loaned for the Maple Ten and €175m for the Quinn family.
The prosecution lawyer said one borrower was in the South of France when he was chased down by former chief executive David Drumm – who is not on trial – and Whelan.
Unsuccessful attempts were made to get investment from the US and at a roadshow in the Middle East, where Anglo tried to line up sovereign states to invest.
The court heard the enormous lending was designed to let investors buy the Quinn holding – 25 per cent of the bank’s share value. The former business tycoon Mr Quinn built it up in undisclosed stock market deals.
Mr O’Higgins told the court that the true extent of Mr Quinn’s holding became apparent when he met Mr Drumm and FitzPatrick at a hotel in Navan, Co Meath, in September 2007.
The prosecution claims the loans were arranged between 8 and 30 July 2008, months before the bank was nationalised.
The court was told each member of the Maple Ten was due to get €60m but that fell to €45m as the share price dropped. They were only liable for 25 per cent of the value of the loan.
The trial is expected to run until the end of May.