Anglo boss had loans of €100m, court hears

The loans taken out by Seán FitzPatrick, his wife and family increased from about €10 million in 2002 to about €100 million in 2007, a court has heard.

Seán FitzPatrick is accused of concealing the scale of the loans

The trial of the former Anglo Irish Bank chairman for allegedly misleading the bank’s auditors about multi-million euro loans over the five year period began at Dublin circuit criminal court yesterday.

The loans were used to finance the development of shopping centres, hotels and offices at a time when a lot of money could be made in property development, Dominic McGinn, SC, for the prosecution, said.

He said that the amount of loans was “artificially reduced” for a period of two weeks around the bank’s financial end of year statement by short-term loans from other sources, including the Irish Nationwide Building Society. He said the trial was about Mr FitzPatrick’s alleged failure to disclose the extent of his loans to Anglo’s auditors, Ernst & Young, now EY.

He told the jury that Mr FitzPatrick was entitled to a presumption of innocence and that it was not enough to think that “he is probably guilty”.

Mr FitzPatrick, 68, of Whitshed Road, Greystones, Co Wicklow, has pleaded not guilty to 22 charges of making a misleading, false or deceptive statement to auditors and five charges of furnishing false information over the years 2002 to 2007.

Mr McGinn said that Mr FitzPatrick had been a director of the bank and that there was a requirement under company law to declare the level of loans made to directors. These declarations generally had to be made in end of year financial statements and also to the bank’s auditors. He said that financial statements were relied on by depositors, investors and borrowers to give a true and accurate picture of the performance of the bank.

Mr McGinn told the jury that as well as taking out short-term bank loans, Mr FitzPatrick also transferred funds from deposits and savings accounts to temporarily reduce the size of his loans on the Anglo books around the bank’s year-end date every September. “The amount of loans [was] artificially reduced,” he said.

The jury of five men and eight women will begin hearing evidence today before Judge John Aylmer.

The prosecution intends to call 75 witnesses including Matt Moran and Tiarnan O’Mahoney, who worked at the now-defunct bank. Alan Dukes, the former chairman of Anglo’s successor bank, IBRC, will also be called.

The trial was listed to run for 12 weeks from late September. An enlarged jury panel with 15 members was sworn in, two of whom have since been excused for work and personal reasons.