EC clears state takeover of Anglo amid fresh FitzPatrick disclosures

THE European Commission will not block the Irish Government’s decision to take control of Anglo Irish Bank.

The commission said yesterday the move could not be categorised as a form of state aid to the bank.

Last month the government seized control of the lender after it emerged that former chairman Sean FitzPatrick hid at least €87 million he had in loans from the auditors, most of the directors and the general body of shareholders.

The revelations forced the immediate resignations of the bank’s chief executive and chairman and of one non-executive director.

The clearance from Brussels came as further shock disclosures claim Mr FitzPatrick got tens of millions worth of sterling and dollar loans from Irish Nationwide Building Society (INBS).

These were part of the transfers between Anglo and INBS.

They were used, it was reported, to conceal up to €122m in borrowings from Anglo Irish by the former chairman of the bank.

It emerged yesterday INBS provided Mr FitzPatrick with loans of $56m (€44m) and £14m (€16m) on September 26, 2007.

Last night INBS chairman Michael Walsh resigned following the shock revelations.

It has been suggested the society lent Mr FitzPatrick $26m (€20m) on September 27, 2006, with an undertaking that Anglo would repay the loan if Mr FitzPatrick could not.

The report yesterday said the borrowings were just part of Mr FitzPatrick’s loans from Irish Nationwide in 2007.

Anglo said last month that he had repaid €122m.

It has been established Mr FitzPatrick borrowed from Irish Nationwide over eight years, drawing loans before Anglo Irish’s accounting year-end on September 30 and then paying them back within days with fresh loans from Anglo.

In transferring the loans he hid them from the bank’s auditors and shareholders.

The Financial Regulator and the Office of the Director of Corporate Enforcement are investigating Mr FitzPatrick’s loans.

In a separate statement the European Commission said it has no objection to the nationalisation of Anglo as no state aid is linked to the move.

“The commission considers the purchase of existing shares and the takeover of assets, when these are not accompanied by a capital injection, assumption of liabilities or other state measures, do not favour the financial institution”, it said.