Anglo: Drumm knew FitzPatrick was hiding €100m borrowings for 2 years

THE failed Anglo Irish Bank has claimed its former chief executive David Drumm knew for at least two years that the then chairman Sean FitzPatrick, has been hiding up to €100 million of borrowings from shareholders in an Irish Nationwide account.

Mr FitzPatrick used the defunct building society to bury the loans over several years in the run up to the Anglo audit by transferring them temporarily to the building society.

Mr Fitzpatrick’s actions are now the subject of Garda investigations.

The fresh allegations were made against Mr Drumm in papers filed by Anglo in a Boston court in recent days.

Meanwhile at a creditors meeting in Boston Mr Drumm disclosed that he and his wife Lorraine had held up to 25 bank accounts prior to his filing for bankruptcy in the US.

Mr Drumm has debts of over €10.2m.

Under questioning by Kathleen Dwyer, the bankruptcy trustee, Mr Drumm said he was unable to give details of transactions involving any of the accounts held by him and his wife.

As Mr Drumm endeavours to have himself declared a bankrupt in the US it is believed that March 18 is emerging a critical date for the bank’s pursuit of Mr Drumm. That is the deadline creditors have to beat to prevent Mr Drumm from being discharged from a particular debt.

It is expected after that date Drumm could have his bankruptcy case accepted in the US which would in effect prevent creditors such as Anglo and others from trying to recover the monies owed by Mr Drumm.

Drumm and his family moved to the US following his resignation from the bank in late 2008 when it came to light that Mr FitzPatrick has hidden the loans he had from Anglo for several years.

Both Mr Drumm and Mr FitzPatrick face other investigations into their time as the two most senior officials in Anglo, which is now the subject of a €29bn-€35bn bailout by Irish taxpayers.

In late December it was decided they would have to answer before the public about key decisions they took that eventually led to the bank’s collapse.

They are to be summoned before a public tribunal after the Chartered Accountants Regulatory Board (CARB) ruled they had questions to answer about their roles as Anglo’s former top executives.

In its submission to the Boston court this week, Anglo also claimed Drumm had failed in his fiduciary duty by secretly putting together documents three months after loans were issued that made them “non-recourse.”

In effect this means that loans to certain borrowers were secured on the shares in Anglo.