Drumm faces Anglo Irish legal claim over €8m loans

By Geoff Percival

Thursday, November 26, 2009

ANGLO Irish Bank has launched legal proceedings against their former chief executive David Drumm which relates to €8 million worth of loans made to him by the bank.

It has been suggested action relates primarily to the transfer of property from the joint names of Mr Drumm and his wife, Lorraine, into Mrs Drumm’s name alone.

While a spokesperson for Anglo was refusing to comment yesterday evening, it is understood legal documents have been formally lodged with the High Court.

The transfer of ownership to Mrs Drumm would ultimately mean that the property, which was apparently being used as security on part of her husband’s loan, would be beyond the reach of the bank.

Anglo is understood to be seeking to overturn the property transfer.

Mr Drumm resigned from his post at Anglo just under a year ago in the wake of the controversial directors loans scandal at the bank. Together with former Anglo chairman Sean FitzPatrick, he was among the highest profile borrowers. Mr FitzPatrick still owes more than €100m to the bank.

Mr Drumm’s position was only filled on a permanent basis three months ago by Australian banker Mike Aynsley.

The move by Anglo is not totally unexpected and follows external and internal examinations of loans made to the bank to former executives and directors.

Minister for Finance Brian Lenihan has already indicated that those involved who have not been repaying their loans would be pursued through the courts.

News of the impending High Court action against Mr Drumm comes after it emerged that the business advisory firm, KPMG, has been asked to investigate options for Anglo’s future direction ahead of any potential restructuring plan.

Any further capital injection from the Government into the already nationalised bank will hinge on the KPMG report and ultimately the approval of the European Commission.

A winding down of the bank has been mooted as another possible option in recent weeks.

This story appeared in the printed version of the Irish Examiner Thursday, November 26, 2009