Opposition tells Taoiseach to come clean on Anglo

OPPOSITION leaders have demanded Taoiseach Brian Cowen comes clean on what the Government knew about the extraordinary steps taken to stabilise Anglo Irish Bank throughout last year.

Fine Gael leader Enda Kenny said the public deserved to know why the €7 billion back-to-back loan from Irish Life and Permanent and €300m loans to Anglo’s investors were emerging the month after the bank was nationalised.

During Leaders’ Questions Mr Kenny said the public was being asked to have faith in a banking system undermined by “rumour, allegation and fact”.

Yesterday, the Taoiseach revealed he knew last March Anglo was in a dangerous funding situation because the Quinn Group held an excessively large yet unknown stake in it.

Mr Cowen was finance minister at the time and had meetings on the instability of the bank and its vulnerability to hedge funds which had started to bet against it.

Mr Cowen said this was resolved on July 13 when Sean Quinn purchased a 15% stake in the company and eliminated his Contracts for Difference, which meant he had a stake in the company not held in shares.

At this point the current Minister of Finance Brian Lenihan learned of a €300m investment in Anglo. But the Taoiseach did not clarify if the minister knew the exact nature of this loan/investment.

Subsequently the details of the deal were not contained in the report Mr Lenihan commissioned on Anglo and the other banks.

Mr Cowen said the Financial Regulator knew of the deal and accepted the legal advice supplied by Anglo.

The bank had told the Regulator the deal complied with the laws and the new shareholders did not have to declare their interests because the stakes did not go above 3%.

Mr Kenny said there was a “golden circle” in place and the investors should be named.

Mr Cowen said he did not know the identities of the 10 people who each took out €30m loans to buy Anglo shares

“I am telling the truth and the total truth... there was an arrangement made in Anglo that was understood to be in compliance [with the law],” he said.

He said the full extent of the governance issues only came to light when the department completed a due diligence process before nationalising Anglo.

When asked by Labour leader Eamon Gilmore to explain what he meant by “governance issues” Mr Cowen said it referred to the IL&P €7bn loan, the loans to directors including Sean FitzPatrick and the €300m provided to the 10 investors.

He said more details would be contained in an appendix to Anglo’s annual report due to be released on Friday.