THE FORMER HEAD of the Quinn empire has told a court that he doubled down on his investment in the failed Anglo Irish Bank because he “thought it was an opportunity”.
Asked at the trial of three former Anglo executives why he increased his investment in Anglo at a time when the share price was plummeting, Seán Quinn said that the bank’s financial figures looked solid at the time.
“The logic was that profits were increasing by 45 per cent at a time that the share price was going through the floor,” Quinn said.
“Where I come from, you would be interested in becoming an investor in that company.
“All of their accounts were signed off by auditors and were a matter of public record.
I could see no reason why we should sell shares. I thought it was an opportunity to invest.
“Turns out I was wrong.”
Marvellous
Quinn was taking the stand on day four of the trial of Seán FitzPatrick, the bank’s former CEO and chairman, Patrick Whelan, the former MD of lending in Ireland for Anglo and William McAteer, the former chief risk officer and finance director.
All three are accused, and have pleaded not guilty of, breaching the Companies Act by loaning money to people in order to prop up the bank’s ailing share price.
Quinn had earlier told Paul O’Higgins SC acting for the prosecution that he invested in Anglo because he admired how it was run.
“I thought it was a marvellous institution.”
Quinn outlined how he had owned 24 per cent of Anglo through contracts for difference (CFDs) by September of 2007.
Plug the hole
Much of this morning’s questioning centred around a phone call between Quinn and former Anglo chief executive David Drumm.
Quinn said that his group had made loans between companies in order to pay for losses accrued in purchasing the contracts for difference, which were used to buy shares in Anglo.
He said that he phoned Drumm in December 2007 to inform him that the group would have a €400 million hole in its finances.
He said that he never asked for money, but wanted to make Drumm aware of the deficit.
Quinn said that he kept his involvement in Anglo “under the radar” and that he was worried that the reveal of the size of the hole would cause problems for Anglo.
He told the court that “within an hour” Drumm phoned him to offer him a loan of €500 million, which Quinn said would “tidy the whole thing up”.
Asked by counsel for Pat Whelan, Brendan Grehan SC, if he had phoned Drumm to “scare him into lending money”, Quinn said that was not the case.
He also denied that he “had Anglo over a barrel”.
“I’m not denying that I was pleased that he offered me €500 million, because it filled the hole.
“They had me over a huge barrel,” said Quinn.
The businessman said that Anglo were “running the show” and that he had told Drumm that the loans he had taken would be repaid, “regardless of the legality”.
Asked if that statement implied he felt the loans Anglo had made to him were illegal, Quinn replied “Yes.”
The trial continues in front of a jury of 15 people at the Circuit Criminal Court.
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