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The Anglo verdicts are in...but what next for the banking inquiry, David Drumm and Seán Fitz?

A parliamentary inquiry into the banking crisis could kick off by the end of this year.
Apr 18th 2014, 9:06 AM 10,948 89

WILLIE MCATEER AND Pat Whelan became the first bankers to be convicted under Ireland’s laws relating to illegal lending yesterday when a jury of seven women and five men delivered guilty verdicts.

They are the first executives from Anglo Irish Bank to be held to account for the collapse of the financial institution.

The pair’s offence was lending over €450 million to the so-called Maple Ten – a group of property developers – to prop up the bank’s share price.

What happens now?

Sentencing

McAteer and Whelan will return to court on 28 April to find out if they will serve a prison sentence – and how long that term will be.

Under Section 60 of the Companies Act, they could face up to five years in prison but remarks made by the judge during legal argument in the trial make this an unlikely outcome.

RTÉ News reports that Judge Martin Nolan told the accused during proceedings that while he could not allow them to use the Financial Regulator’s knowledge of events as a defence, he would take it into consideration as a mitigating factor on conviction.

“I have no doubt the Financial Regulator knew there was going to be substantial lending into this scheme to effect it,” he said.

I also take the view that the Financial Regulator took no steps to discourage the scheme or in any way stop it. And it seems from regulator witnesses that they were somewhat relieved when the scheme went through and that the CFD issue was alleviated and regularised.

Fines of up to €30,000 may also be issued by Judge Nolan at the end of the month.

Bank Inquiry 

A parliamentary inquiry into the banking collapse, which has been given the green light by government, now looks set to begin before the end of this year.

The probe was previously delayed on the advice of the Office of the Director of Public Prosecutions as any Oireachtas hearings could have an impact on ongoing trials.

With the guilty verdicts for Whelan and McAteer and the not guilty finding for Seán Fitzpatrick, the Oireachtas Finance Committee will be able to start its preparatory work.

Chairman Ciarán Lynch, who is expected to head the investigation, told TodayFM that there is much work to be done, including forensic accounting and witness processes.

However, he added that he “would certainly see that process commencing within this calendar year”.

David Drumm

File Photo Willie McAteer Found Guilty Willie McAteer with David Drumm in 2008. Source: Sasko Lazarov/Photocall Ireland

Although he wasn’t in his dock, Judge Nolan described David Drumm, former CEO of Anglo Irish Bank, as the “author” of the Maple 10 loan deal.

Newstalk’s Francesca Comyn also recalls how lawyers for Pat Whelan described the trial as “Hamlet without the Prince”.

Drumm – who told Seán Fitzpatrick the Quinn deal was above board and that he didn’t need to know the names of the Maple 10 – was not part of the DPP’s case.

He currently resides in the US, where he is awaiting a bankruptcy case hearing on 21 May.

The court will decide if he can walk away from his debts, thought to be around the €10 million mark.

Drumm moved to Boston five years ago and has refused to return to Ireland to answer questions about what happened at his former employers.

Seán Fitzpatrick

Despite Fitzpatrick’s almost-gleeful statement on Wednesday following a not guilty verdict, the 65-year-old is not done with courtrooms.

He will be back on trial later this year in relation to charges of failing to make disclosures to the bank’s auditors about loans he received.

A trial date has been set down for 7 October, with a hearing on preparations due on 25 July.

The loans in question, worth €139 million, were allegedly drawn down from Irish Nationwide Building Society between 2002 and 2007.

Read TheJournal.ie’s coverage of the Anglo trial here>>

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Sinead O'Carroll

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