Anglo probe will look into golden circle loans (Irish Times)

04 November 2011

A probe by an accountancy body into directors' loans at Anglo Irish Bank was widened yesterday to include deposit transfers between the bank and Irish Life & Permanent and loans to the so-called 'golden circle' to buy its stock .

The Chartered Accountants Regulatory Board's (CARB) complaints committee will examine the reporting of deposits made by IL&P with Anglo last year through its subsidiary Irish Life Assurance.

The bancassurer placed €7.45bn of short-term deposits with Anglo last September -- including €4bn on the day of the government guarantee -- as part of a circular arrangement between both institutions.

IL&P chief executive Denis Casey, finance director Peter Fitzpatrick and treasury unit head David Gantly all resigned last month over the issue, which served to flatter Anglo's financial position on September 30, the end of its financial year.

Mr Fitzpatrick is a member of the Institute of Chartered Accountants in Ireland, set up in 2007 by the CARB to regulate its members.

The regulatory board's special investigator, John Purcell, former Comptroller and Auditor General, will also look at the €451m of loans Anglo made to 10 property developer clients to purchase stakes in the bank.

The group -- known alternatively as the 'golden circle' and the 'Maple 10'-- acquired a 10pc holding last summer as businessman Sean Quinn went about unwinding his 25pc position in the group, held through contracts for difference.

Mr Purcell is investigating whether three former Anglo board members, Sean FitzPatrick, David Drumm and William McAteer, all members of the institute, played a role in either of the transactions.

The board had already said last month that it was investigating Sean FitzPatrick's eight-year practice of hiding directors' loans from shareholders. The former Anglo chairman concealed up to €122m of loans by temporarily transferring them to Irish Nationwide Building Society at the end of the bank's financial year.

Mr Purcell is expected to produce a report on all the issues within three to four months. If he believes an apparent case exists, the body will set up a disciplinary tribunal. If there doesn't appear to be a case against any of its members, the watchdog is likely to publish the report.

The disciplinary tribunal can impose fines of up to €30,000 on individual members and €30,000 per partner in a member firm, if a case of misconduct is proven.

There are a number of other separate investigations into scandal-ridden Anglo, including probes by the Office of the Director of Corporate Enforcement; the Financial Regulator; the Irish Auditing and Accounting Supervisory Authority; the Garda Fraud Squad; and the bank's own review involving an independent firm of solicitors and including a senior counsel.