Ex-Anglo lending chief may sue bank

A FORMER head of Anglo Irish Bank’s lending division is considering bringing an action on behalf of Anglo claiming damages against senior Anglo officials, the state, former Central Bank Governor John Hurley and former financial regulator Patrick Neary alleging their actions and negligence led to the bank’s collapse and his suffering massive losses on his Anglo shares.

Anglo insists Thomas Browne has no basis for a derivative action (an action on behalf of a company by a shareholder) on behalf of the bank. It also disputes his claims he was “instrumental” in introducing a “more conservative” lending policy in the bank in circumstances where there was a 284% increase in its loan balances from €13 billion to €38bn before he left in 2007.

Mr Justice Peter Kelly yesterday dealt with matters arising in proceedings in which Anglo is seeking €50m summary judgment orders against Mr Browne, Ferney Hill, Brighton Road, Foxrock, Dublin, director of Anglo’s lending in Ireland from early 2005 to autumn 2007, over unpaid loans.

In the Commercial Court proceedings, Mr Browne claims he has a defence and counter-claim to the bank’s summary judgment claim on grounds “fraudulent”, “deceitful and probably unlawful” conduct of Anglo and its senior officials prior to its nationalisation in early 2009 resulted in the bank’s demise and it being the “single largest contributor” to the financial difficulties afflicting Ireland.

These actions included the temporary transfer of €7.3bn funds by Irish Life & Permanent to enhance Anglo’s balance sheet in 2008; concealment of details of the Quinn Group’s shareholding in Anglo; off-market placing of about 10% of Anglo shares in “non-recourse” arrangements funded by Anglo itself with 10 clients; and non-recourse loans by Anglo to its own directors to purchase Anglo shares.

These “entirely wrongful” actions, some of which were apparently conducted “with the complicity” of certain regulatory and supervisory authorities, led to the bank’s nationalisation, collapse of its share price and destroyed his own financial security, Mr Browne said.

While he appreciated his references to “a more conservative lending policy” while he was with Anglo appeared “remarkable” given the “mammoth write downs” later applied to Anglo loans, his assertions were “entirely accurate”, he said.

His pursuit of a “more conservative lending policy” was “a source of rancour” within Anglo.

Mr Justice Kelly said he would allow Mr Browne bring a motion seeking to bring a derivative action and would hear any such motion and the summary judgment proceedings on December 16.