TAOISEACH'S RESPONSE:Mr Cowen, who is concluding an official visit to Japan, gave his first public response in Tokyo yesterday to the decision by the Government to bring the beleaguered bank under State ownership.
“[Anglo Irish] will continue to do business, it will be business as usual for that bank,” he stressed.
Mr Cowen said the decision to nationalise the bank was taken on Wednesday because of the governance issues that arose out of the concealment of directors’ loans of up to €87 million to former chairman Seán FitzPatrick and director Lar Bradshaw, and the continuing erosion of confidence in the bank.
Moving the bank to full public ownership from the position where the Government had a 75 per cent stake was the “correct approach” in the circumstances, he said.
“In relation to this decision of public ownership, it’s very important to point out the Government decision here is to do what is in the best interest of the Irish economy, retaining jobs in the Irish economy, and ensuring there is full confidence in our banking system,” he said.
Just before midnight (local time) on Wednesday, the Taoiseach joined by telephone from Tokyo a meeting of the Cabinet which took the decision. It happened on the eve of an extraordinary general meeting (egm) of the bank that would allow for a recapitalisation of €1.5 billion in funds made available by the Government.
“I had been in close touch with the Minister for Finance, monitoring this situation, even since the time before Christmas and indeed in the last few days particularly,” Mr Cowen said yesterday.
“We have a situation where if we didn’t make our move, you have the egm, and still on the table the €1.5 billion offer [to recapitalise the bank] that was being made.
“We decided that would not now be on the table in respect of the egm, which legally is required to be held this morning and the chairman of the bank will answer all questions at that,” he said.
The Taoiseach was speaking to reporters after concluding a courtesy call to Emperor Akihito in the Imperial Palace in Tokyo.
Outlining the steps leading up to the decision, he said: “There have been certain issues which have arisen that have affected the reputation of Anglo Irish, some corporate governance issues. Market confidence has continued to erode since then and it was on the basis of all of that it was finally decided that we would move the bank into full public ownership.”
Asked about the volume of debts that Anglo Irish may have on its books, he said that auditors PricewaterhouseCoopers had worked on this and that an assessment would be made to the board of the bank, under new chairman Donal O’Connor. He said the management would ensure the bank remained solvent and trading.
When asked about what measures were being taken to secure the repayment of the €87 million in loans involving Mr FitzPatrick, he said they would be repaid in the same way as any other loan in the bank.
Mr Cowen indicated the loss of market confidence and governance issues were the main reasons behind the decision and not any new information on its financial or debt situation. “There was further erosion of market confidence for Anglo Irish and we decided this was the best thing to do in the interest of the Irish economy.”