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Anglo Irish investors demand High Court action



David Sharrock, Ireland Correspondent


Angry shareholders in Anglo Irish Bank demanded High Court proceedings and resignations as new details emerged today of secret loans to its directors while the Government struggled to assure markets that it was “business as usual”.
At an extraordinary general meeting at Mansion House in Dublin, scheduled before the Government’s announcement late last night that it was nationalising Anglo Irish, Donal O’Connor, the chairman of the bank, apologised for the manner in which loans in excess of €84 million (£75 million) to Sean FitzPatrick, the former chairman and chief executive, were handled, calling it wrong and unacceptable.
"These events are traumatic and painful for each of you, for shareholders and staff, and I apologise on behalf of myself and the board," Mr O’Connor told the meeting.
He revealed that in total there was €179 million of loans to directors, including €84 million to Mr FitzPatrick.

Mr O’Connor said that Mr FitzPatrick's loans were at the normal commercial rate and in accordance with the bank's normal underwriting criteria.
He also explained that the transfers of the loan balance out of the bank before audits — which took place in eight consecutive years up to 2007 — happened because the bank did not have a focus on such activity and failed to identify it as a risk area.
However, when he acknowledged that the auditors were not aware of the past transactions, he was booed from the floor.
Mr FitzPatrick used the secret loans to invest in Anglo Irish Bank shares, property funds, wealth management products, investment property, film finance and pension products.
He concealed the loans by moving them to another bank before the end of the financial year so they would not have to be disclosed in the annual report.
In 2007, his loans stood at €129 million. He owes €84 million.
The bank said its legal advice was that concealment of directors’ loans did not breach company law, but that is being reviewed by the stock exchange, the financial regulator and the office of the director of corporate enforcement.
Shareholders called for the resignation of the entire board, excluding the new chairman as well as the non-executive directors Alan Dukes and Frank Daly.