Disciplinary inquiries into former Anglo executives to resume

Professional disciplinary tribunals into former Anglo Irish Bank executives and the work of the lender's one-time auditor, EY, are set to resume following the recent conviction of the failed bank's former chief executive David Drumm in relation to two sets of fraud charges.

The Director of Public Prosecutions asked Chartered Accountants Ireland's professional standard unit, formerly known as Carb, in April 2011 to hold off on various disciplinary hearings pending the outcome of a series of criminal trials stemming from the bank's implosion.

CAI’s complaints committee had already found by that stage that there were certain “prima facie” cases of liability to disciplinary action relating to four of its members: Drumm; his former chairman, Seán FitzPatrick; Anglo Irish’s one-time finance director Willie McAteer; and former Irish Life & Permanent finance director Peter Fitzpatrick.

In addition a preliminary report carried out by former comptroller and auditor general John Purcell in 2011 for Carb said that there was "prima facie" evidence that EY – then known as Ernst & Young and earning €1 million in audit fees from the Anglo Irish – had a case to answer on major errors in the bank's 2008 accounts.

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"Following the recent conclusion of the various legal cases, the office of the DPP has informed the [CAI] that it had withdrawn its ongoing request for deferral," the accounting body said in a statement provided to The Irish Times on Friday. "Accordingly the institute may proceed with its own processes in relation to the various cases."

The CAI said it would now “review and consider the large body of evidence and outcomes from the recent criminal trials and other inquiries that have taken place” to see how these might affect the disciplinary processes.

Penalties

In instances where complaints are upheld, the CAI can, in severe cases, withdraw an individual’s licence to practise and fine them up to €30,000. Possible sanctions against a firm include a fine of up to €30,000 for each partner who is a member of the accoutancy body.

The DPP move comes after Mr Drumm was sentenced in June to six years in prison for his role in the bank’s fraudulent receipt of €7.2 billion of temporary deposits from Irish Life & Permanent (IL&P) in September 2008, giving investors the impression that the then-ailing lender’s financial position was stronger than it actually was.

Mr Drumm subsequently admitted to additional charges relating to Anglo Irish’s provision of €450 million of illegal loans to a group of 10 businessmen – known as the Maple 10 – to buy shares in the company that year. The admission avoided the prospect of another criminal trial, which would have been expected to take place next year.

Other Anglo Irish-related criminal cases in recent years saw Mr FitzPatrick cleared in 2014 of charges in relation to the Maple 10 loans. He also walked free from court last year after a case, relating to temporarily moving tens of millions of personal loans off Anglo Irish’s balance sheet at the end of its financial year, collapsed.

Mr McAteer was one of three bankers to be given prison sentences in 2016 following a separate trial over the IL&P deposits debacle. Former IL&P finance director, Peter Fitzpatrick, who had also been indicted in relation to the deposits case, was found not guilty.

Meanwhile, Mr McAteer pleaded guilty in late 2016 to receiving a fraudulent €8 million loan from Anglo Irish to prop up his share position in the bank.