Anglo mis-sold fund, claims CEO

The CEO and chairman of electrical giant Glen Dimplex, Sean O’Driscoll, has alleged that Anglo Irish Bank mis-sold a German property fund to him as an investment, resulting in “catastrophic losses” with his €500,000 investment now standing at €88,000.

Mr Justice Peter Kelly made directions yesterday for a consolidated hearing in the Commercial Court of that claim, with three other actions by Mr O’Driscoll, of Granville Rd, Blackrock, Co Dublin, over other Anglo funds.

A fifth action, related to an Anglo fund involving New York hotels, is not being pursued by Mr O’Driscoll arising from the Supreme Court’s rejection of businessman Gerard McCaughey’s case over that fund.

A separate action by Irish Bank Resolution Corporation, formerly Anglo, seeking €1.8m from Mr O’Driscoll arising from loans given to him for investments in the various funds, will be heard later.

In his four actions against IBRC and IBRC Assurance Company Ltd, Mr O’Driscoll alleged he suffered losses of €5m due to alleged misrepresentation of the various funds.

The action transferred yesterday relates to a German retail property fund, the Anglo Taurus Retail Geared Property Fund.

Mr O’Driscoll said he borrowed €500,000 from Anglo in 2007 to invest in that fund.

In an affidavit, Mr O’Driscoll said he accepted not every investment could be successful and was prepared to accept losses if they are warranted. He considered, having reviewed the Taurus fund with his advisers, that fund was mis-sold to him as an investment and was also negligently managed by the defendants.

Unknown to him, the properties in which the Taurus Fund invested were bought by Anglo customers in 2005 with borrowings from Anglo, he said. Neither he nor the other investors were told the loan would be called in some five years from the date of investment. Had he been advised of the policy underpinning the Taurus fund, he certainly would not have invested in it.

By Dec 2012, the value of his €500,000 investment had plummeted by almost 50% and was now €88,000, less distributions paid to date. Having failed to secure any satisfactory engagement with the bank concerning the “general” mismanagement” of his investments, he initiated proceedings.

In its action against Mr O’Driscoll, IBRC is seeking judgment for €1.8m over his alleged failure to fully repay loan facilities of Apr 2009 related to the Woolgate Exchange Geared Property Fund, the Newbury Street Fund and the Anglo Taurus Retail Geared Property fund. Mr O’Driscoll has lodged €1.8m into court to meet that claim if necessary.