UPDATE Feb 21: A newly released Anglo-Irish Bank report admits that E451 million was loaned to the 10 people of interest, 50% more than previously claimed.
There is no explanation available to account for the E151 million error in the first numbers released.
The loans were made to purchase stock that was being off-loaded by a large shareholder. According to the Irish Times today “The shares were purchased because Anglo was concerned that the release of 10 per cent of its share capital onto the markets would undermine its share price.” (see Irish Times update at the bottom of the page)
More likely the shares were bought to bolster the share price that the large share holder received on dumping such a large amount. It is estimated that at least E300 million of the loans will have to be written off at the expense of the taxpayer.
Such activity could be considered fraudulent as it provides preferential pricing and accommodation for one shareholder at the expense of others. Further, the attempt to conceal the transaction and the amount of the transaction is indicative of poor judgment on the part of management, the persons of interest and the government in doing their due diligence prior to the take over.
The frantic attempts by government officials to hide the persons of interests names continues to be a source of bemused perplexity considering the bank is now a public entity as are all of its records.
Butler Report has
forwarded this update to supplement its complaint this
week to the EU anti-fraud Unit. (See below)
February 20, 2009
The Irish government is under intense pressure to name the 10 people of interest involved in a stock purchase scheme at Anglo-Irish Bank last year. The reported purpose of the purchase was to bolster the Bank’s shares to allow a large stockholder to dump his stock.
The people of interest, incorrectly referred to by the bank and government as ‘investors,’ were given 30 million Euros each to purchase bank stock which was then used as collateral for the loans. It is a scheme similar to check-kiting except on a massive scale. The stock tanked and the shares became worthless leaving the Irish public with a 300 million Euro tab. The 10 people of interest are described as having ‘stature’ in Irish society.
The State purchased Anglo-Irish Bank recently through a bail-out. Prime Minister Cowen has been accused of having a cozy relationship with the banks directors. He refuses to name the people involved in the stock scheme citing privacy concerns even though the Bank - and all of its records - is now publicly owned. Today Cowen said that it could be ‘many years’ before the names are made public, if ever.
People familiar with Irish politics describe this as the first steps in the circling of the wagons to protect involved business and political members. The fact that in other countries a stock scheme such as this is regarded and punished as a criminal undertaking, indeed a conspiracy, seems lost in Irish government thinking.
ButlerReport publisher, Evin Daly, this week sent an open letter to the European Union anti-fraud Office asking them to investigate the circumstances surround the Anglo-Irish deals and the government’s involvement in them. Copies of the letter were sent also to all Euro MPs. Communications with EU contacts are ongoing.
The genuine concern is that the Irish government will refer the case to the High Court or to a ‘Tribunal’ where it could languish for years. This is a common and expensive tactic used to protect what is referred to in Ireland as the “Golden Circles” of connected business men and politicians to avoid prosecution.
Mr. Daly spoke today at a private luncheon in Boca Raton, Florida, where he reiterated his call for urgent intervention from the European Union. He stressed the need for federal oversight for Irish banking to protect shareholders and the public alike from the abuses of power that are being written about daily in Irish newspapers.
“The Irish public is so used to this behavior that it is accepted, although bitterly,” Daly said, “It’s time for the public to stand up and insist that those who have broken the law face the music.” Asked how that would be done Daly suggested that the Irish (he is a citizen) throw out their sitting politicians and install news ones. “Cowen seems to have forgotten that his responsibility is to the voting public first, not to his election underwriters,” he added.
Reference:
Irish
Times: Anglo loaned €451m to 10 clients to buy bank
shares
http://www.irishtimes.com/newspaper/breaking/2009/0220/breaking14.htm
ButlerReport
