DIRECTORS' LOANS:DIRECTORS OF Anglo Irish Bank took out loans totalling €255 million during the 12 months to the end of September 2008, figures included in yesterday's annual report show.
In addition, companies in which directors had a controlling interest and other interested parties were advanced loans totalling €25 million during the year.
The figures indicate the extraordinary extent to which the board of the bank was also acting as a customer of the bank.
In his letter at the beginning of the report, executive chairman Donal O’Connor said that as a result of the post-September “permanent deterioration in the share price of the bank, it is likely there will be an impairment provision” made in respect of directors’ loans.
The total for loans advanced to directors during the year includes €122 million advanced to former chairman Seán FitzPatrick as part of his practice whereby he reduced his exposure to the bank near each year end and then drew out fresh loans after the year end had passed in order to avoid disclosure.
The annual report reveals that during 2008, an unidentified director drew down a non-recourse loan of €8 million secured on the shares of the bank. In the period since September, the collateral on this loan has been changed to full personal recourse.
It is understood this transaction is not related to the unwinding of the Quinn family CFD investment in Anglo in July of last year.
The report states that at the end of September 2008, the balance out in directors’ loans was €179 million. The figure is substantially higher than the €150 million figure quoted by the bank in December. At least part of the difference is accounted for by the addition in yesterday’s report of directors’ involvements in investment partnerships and co-ownership structures which received loans from Anglo.
Loans out to Mr FitzPatrick at the financial year’s end were €83.3 million. The €122 million taken out by the former bank chairman during 2008 includes €9 million in respect of another former director in a joint loan account. The director concerned is understood to be Lar Bradshaw.
Loans to directors who remain on the board are €5 million. It is believed most of this is on loan to Declan Quilligan, chief operating officer with the bank.
The accounts show that during 2008, partnerships with which directors had an involvement borrowed a total of €42 million of which €20 million was attributed to directors. “All partners are liable on a joint and several basis for the outstanding loan balances of the partnerships in which they invested,” the accounts state.
A further €4 million is outstanding in relation to former directors’ shares of loans to syndicated investment partnerships.
Furthermore, €20 million attributable to a director and his family was out on loans to co-ownership structures in which they are investors. Loans to the other investors in these co-ownership structures were €45 million. The loans are secured against co-ownership investments.
The accounts show very substantial directors’ deposits being moved in and out of the bank. Deposits during the year were €140 million, while deposits withdrawn were €137 million.
Mr FitzPatrick withdrew deposits shortly before September 30th in 2008, 2007 and 2006 of €22 million, €21 million and €17 million respectively.
The deposits were used by him and another director to repay loans and were redeposited after loans were taken out again after each years’s end.
