State will ‘vigorously pursue’ Anglo debts

THE Government has insisted it will “vigorously pursue” ex-directors of Anglo Irish Bank who owe more than €155m to the institution – even though Anglo’s new management believes the bulk of the money will never be repaid.

On the day that Anglo was dubbed a “Celtic Chernobyl”, the Government again came under sustained criticism for bailing out the bank, a rescue which could cost the state up to €40bn.

Anglo management has made provision to write off €109m of the €155m owed to the bank by ex-directors. This includes potentially writing off almost €68m of the €85m owed by former chairman Sean FitzPatrick.

Asked about the issue by Fine Gael leader Enda Kenny, Tánaiste Mary Coughlan insisted full repayment of the loans would be sought.

“All of the company directors’ loans will be vigorously pursued,” she said.

Separately, Finance Minister Brian Lenihan agreed with Sinn Féin TD Caoimhghín O Caoláin that an inquiry should take place into how auditors failed to spot problems at Anglo and another troubled institution, Irish Nationwide.

Mr O Caoláin told the Dáil that Ernst and Young had effectively given Anglo “a clean bill of health” when accounts were published in February 2009. He said KPMG had audited Irish Nationwide’s 2008 results and similarly gave the institution a clean bill of health.

Mr Lenihan said these were “legitimate” questions and would “require investigation both by the accountancy bodies and the banking inquiry which is under way and which will account to this House”.

The minister also said he would like to “see the back” of Anglo, but it was simply “not possible”.

He made his comments during a heated debate on the wider bailout in the Dáil. But much of the Opposition anger was focused on the Government’s decision to save Anglo.

Labour TD Pat Rabbitte said the Government had merely provided “assertions” rather than firm evidence that Anglo was too big to be allowed fail. He said the €40bn estimate for saving the bank was roughly equivalent to the €39bn capital spending envelope which the Government has in place for the seven-year period to 2016.

“This is seven years of the capital programme committed to a failed bank,” Mr Rabbitte said. He recalled a quote from Taoiseach Brian Cowen on September 30, 2008, the day the Government bank guarantee scheme was announced.

Defending that guarantee, Mr Cowen had declared his intention to “ensure the Irish taxpayer will not be held liable in any way for any deficit that might occur in the event of there being a problem in the future”.

But ever since that statement, the Government had been “mending its hand”, Mr Rabbitte said. “It never admitted the scale of the disaster until Tuesday of this week, 18 months after the guarantee, and has, time after time, made claims that simply do not stand up.”

Meanwhile, Socialist Party MEP Joe Higgins held a protest outside Anglo’s headquarters in Stephen’s Green, and claimed the bailout was an April 1 joke in which the public were being taken “for fools”.