| THE HANDSTAND | MARCH-APRIL2011 |
THE MOST INTERESTING DEVELOPMENT IN THE CRIMINAL INVESTIGATION OF sEAN fITZPATRICK AND THE ANGLO-IRISH BANK
How FitzPatrick sent a €600m deposit book waltzing to Vienna - A deal on Sept.4th 2008, finalised in December 2008 during which period the guarantee of the Banks was established by Minister Lenihan.06 February 2011 Anglo Irish Bank was crying out for deposits in late 2008, so why did Sean FitzPatrick sell its cash-rich Austrian arm in the midst of the liquidity crisis?
The more you learn about Anglo Irish Bank’s €600 million Austrian deposit book, the more you wonder why Sean FitzPatrick decided to sell it in September 2008, a time when Anglo was in dire need of deposits.
The accounts for Anglo Irish Bank (Austria) AG, which have now been obtained by the Insider, contain new information which shows that the Austrian bank was deposit-rich, highly liquid and strongly capitalised.
Anglo’s Austrian operation had total deposits of €570million at the end of September 2008. But, unlike the parent bank in Dublin, Anglo Austria had lent very little of the depositors’ money to borrowers. Much of the cash it had received from depositors was placed with financial institutions, including the parent company in Dublin.
The directors’ report, written in both English and German, makes clear that ‘‘lending remains a small part of overall activity and is only done according to the strict credit policy of the bank’’.
Loans to ordinary commercial customers amounted to just €34.4 million. This represented ‘‘the private client loan book, and its moderate size reflects the fact that this is an ancillary service used by some clients’’.
As well as being rich in liquidity (in contrast to its parent, which was starved of it), Anglo’s Austrian bank was also exceedingly well capitalised. On September 30, 2008, Anglo in Austria had €92million in capital, almost five times the actual requirement of €19.1 million. The bank’s capital ratio was a very strong 39 per cent at the financial year-end.
The bank was also profitable, delivering an 18 per cent increase in pre-tax profits to €13.54million for the year to September 30 2008.
In short, the accounts make it clear that the Austrian operation was providing a source of funding for Anglo in Dublin - just what the latter needed at the time.
The accounts also make clear that the Austrian operation was of such importance that during 2008, eight of the Anglo top brass sat on its supervisory board.
They included FitzPatrick himself, former finance director Willie McAteer and former chairman Peter Murray. These eight far outnumbered the two Austrians sitting on the management board.
The accounts state that while there was extreme upheaval in the financial system as the credit crunch mutated into a systemic collapse of the banking system, Anglo Irish Bank Austria was ‘‘probably less impacted than most other financial institutions’’.
Yet, on September 4, Anglo signed ‘‘a binding agreement’’ to sell the Austrian operation to the Swiss Valartis Group, known in Austria for its sponsorship of snow polo in Kitzbühel.
Anglo announced the sale of the Austrian private bank in the midst of a liquidity crisis - just three weeks before the government introduced the bank guarantee scheme to prop up our troubled banks.
FitzPatrick effectively sent nearly €600 million in deposits waltzing out the back door to Vienna, even as he was extending the begging bowl to politicians, regulators and competitors in Dublin in a desperate attempt to obtain funding to prop up the parent bank, which was teetering on the brink of insolvency.
In fact, as we have pointed out before, Anglo Irish Bank was so keen to get rid of its Austrian deposits that it lent Valartis €24million to help fund the €141 million purchase price. The deal was finalised in December 2008, three months after the Irish taxpayer guaranteed the entire Irish banking system and just weeks before Anglo was nationalised by the government.
One effect of the sale is that almost €600 million in deposits that were formerly held with Anglo Irish Bank’s Austrian office are now on deposit with Swiss Bank Valartis - far away from the prying eyes of the unfortunate Irish taxpayers who have been left footing the bill for FitzPatrick’s disastrous rule of Anglo.
Extraordinarily, neither Minister for Finance Brian Lenihan nor Anglo is prepared to offer any assurances to the taxpayer that none of the €600 million in Austrian deposits is owed to Anglo, to Nama or to other lending institutions propped up by the Irish taxpayer.
Anglo Irish Bank has also declined to comment on the whereabouts of a €22 million deposit which FitzPatrick and another former Anglo director still held with Anglo Irish Bank shortly after the end of September 2008.
Details of the deposit are contained in a little-noticed note in the 2008 accounts of the Dublin parent bank. The note states that shortly before September 30, 2008, FitzPatrick and another former director withdrew deposits of €22 million which were used to repay their loan balances with the bank.
It says the amount was subsequently redeposited ‘‘shortly after the year end following the redrawing of loan facilities’’.
This suggests that FitzPatrick and the other unnamed director still had €22 million on deposit with Anglo shortly after September 30, 2008, when the government introduced the bank guarantee scheme.
Anglo also declined to respond to a question from this newspaper as to what proportion of the €22 million was FitzPatrick’s, and for what purpose the deposit had subsequently been applied.
Drury Communications, the public relations agency that is paid by state-owned Anglo Irish Bank to field media queries, said that, ‘‘because there are a number of investigations ongoing (including criminal investigations), the bank has been instructed not to comment or provide any detail to media on anything that could form part of the investigations’’.
At the time of going to press, FitzPatrick, who was declared bankrupt last year, had not responded to a letter posted to his home address seeking a request for comment.
Public attention has focused on the huge loans that some directors held with Anglo which, in FitzPatrick’s case, were partly concealed by parking them temporarily with Irish Nationwide Building Society at year-end.
However, the details about the large deposits held by directors have barely attracted attention even though the sums involved are also very large. For example, the parent company’s accounts reveal that 12 Anglo directors had as much as €140 million on deposit with Anglo during the year to 30 September 2008.
But the accounts reveal the remaining ten directors held at most €38 million on deposit with Anglo, during the 15 months to December 2009.
The accounts also show that only €8 million in directors’ deposits were held with the bank on December 31, 2009.
www.kathleenbarrington. blogspot.com
*******************************************- IS THIS "WHO IS WHO" OF THE WORKING CLASS? :
Coughlan under fire over training fund
06 February 2011
http://www.sbpost.ie/news/coughlan-under-fire-over-training-fund-54392.html
An application for €40 million worth of EU training funds for the construction sector has still not been completed by Tánaiste Mary Coughlan eight months after she announced the scheme in a blaze of publicity.
Last June, Coughlan submitted an application to the European Commission for financial support earmarked for Irish construction workers who had been made redundant during the downturn.
At the time, the Tánaiste said the €40 million application had been made under the European Globalisation Adjustment Fund which would support the upskilling of almost 9,000 workers who were affected by the national downturn. But eight months on the application is in limbo while thousands of workers who had been employed in the sector emigrate to find work. Application and approval of a similar fund for Dell workers was completed in five months.
Fine Gael’s enterprise spokesman Kieran O’Donnell accused Coughlan of making ‘‘one last bungle’’ before exiting government. O’Donnell was told by the Department of Education that no formal application had been made and that only an ‘indicative application’ had been lodged with the Commission.
‘‘This should be about the minister directing her officials to make every resource available to progress this application so this money is drawn down to prevent people leaving the country," said O’Donnell.‘‘Yet there is no sense of urgency by the minister to access this third-party funding to help reskill and train almost 9,000 unemployed people and keep them in this country."
The terms of the European construction fund allows a 24month window for implementing the scheme from its announcement in June 2010.Eight months of this timeframe have already elapsed without a formal application submitted. It could be next October before it is approved. The drawing down period for the €40 million closes eight months later.
Similar applications had already been made in the case of staff laid-off from Dell, Waterford Crystal and SR Technics.The slow pace of delivery for the construction sector compares to the €14.8million funding, which was made in June 2009 for the unemployed Dell workers and approved five months later.‘‘Two-thirds oft he timeframe allowable to draw down this funding will be lost when it could be helping unemployed workers, many with young families right now," said O’Donnell.
Responding to the processing of the application, the Department of Education (The Tanaiste is Minister of Education) stated that it had made ‘‘a provisional application under the EGF in support of a cohort of redundant construction workers in June 2010’’.It also said that the European Commission was currently examining the application and ‘‘has entered into an iterative(rehearsal?) process with the Department on certain matters of technical detail’’. A spokesman declined to be drawn further.
An application for €2.57 million EGF funding for Waterford Crystal was approved last June, while an application for SR Technics facility at Dublin Airport is awaiting EC approval.
Why is Mary Coughlan headlined as Coughlan - a measure of disrespect? For sure she deserves it as she totally lacked any mature respect for her position as either a Minister of Government or as Tanaiste. Her last words after Brien Cowen resigned and she was left alone on the pavement as he disappeared in his limousine were, as reported in the Indo : "Where the fuck is my car?"
A superficial observation of her endemic use of language - but this hopefully is the last we will hear in Government of "Sweary Mary".JB,Editor.