Seán Quinn says Anglo did ‘a sweetheart deal’ on his stake

Seán Quinn has said he suspected Anglo “were doing a sweetheart deal” when it forced him to sell his stake in the bank.

Mr Quinn, who admitted he used to be Ireland’s richest man, said he couldn’t understand why the share price of Anglo fell so much in July 2008 as the deal was going through. He said that he approached a solicitor in London about the matter.

Mr Quinn told Dublin Circuit Criminal Court the bank knew from November 2007 it was in serious trouble, but Seán FitzPatrick and David Drumm maintained it was “in rude health” as late as September 2008, shortly after the bank guarantee.

He also told the 15-person jury that collateral agreements between himself and Anglo were never meant to be honoured and were drawn up purely for the benefit of the financial regulator, the Central Bank or Department of Finance.

The prosecution allege that three former Anglo executives, Pat Whelan, William McAteer, and former chairman, Mr FitzPatrick, were involved in a plan by Anglo to loan money to the Quinn family and the so-called “Maple 10” group of investors so that they could buy shares in bank and guarantee the stability of the share price.

The three men have been charged with 16 counts of providing unlawful financial assistance to 16 individuals to buy shares in the bank. Each charge relates to a specific person, who allegedly received loans between July 10 and July 30, 2008.

Mr Whelan also faces seven charges of being privy to the fraudulent alteration of loan facility letters to seven individuals in October 2008.

Mr FitzPatrick, aged 65, of Greystones, Co Wicklow; Mr McAteer, aged 63, of Rathgar; and Mr Whelan, aged 51, of Malahide, in Dublin, have pleaded not guilty to all charges.

Mr Quinn told Brendan Grehan, defending Mr Whelan, that he wondered if Anglo was carrying out “a sweetheart deal” following the unwinding of his Contracts for Difference (CfD) stake in Anglo in July 2008.

The trial has previously heard CfDs are a type of investment where a buyer bets on a share price improving without actually owning the share. Mr Quinn controlled nearly 30% of Anglo shares through CfDs.

He said he was not told who was buying the shares in July 2008 or for how much and couldn’t understand why the share price fell 20% during the period he agreed to sell his stake.

He added he was very angry about selling the shares.

Paul O’Higgins, prosecuting, earlier asked Mr Quinn: “Did you have any say at this stage in whether the shares were sold or not?”

“No and he [Mr Drumm] let me know that in no uncertain terms… He told me what he was doing and I objected strenuously.”

Referring to an earlier loan in December 2007, Mr Quinn agreed the Quinn Group took €500m from Anglo to “fill a hole” in the accounts caused by funding the CfDs.

He described a phone call where he informed Mr Drumm of the hole in the accounts: “He said to me, how much would it take to fill the hole? I said about €400m. He said to tidy this whole thing up we should make it €500m.”

Mr Quinn agreed he signed a letter agreeing to sell nine Quinn properties located around Europe to repay the €500m loan.

However, he said he never had any intention to go through with this agreement and that the letter was only for the benefit of others.

Seán Quinn Jnr gave evidence he signed many forms relating to the deal to buy shares in Anglo in July 2008 but that he did not know the details of the deal.

He told Úna Ní Raifeartaigh, prosecuting, he did not know the money from the deal was coming from Anglo but agreed it was his signature on a €15m loan agreement letter from the bank.

The letter reads: “It is my intention to acquire shares in Anglo Irish Bank Corporation plc as a long term investment” and goes on to request the loan.

Mr Quinn said: “I certainly didn’t draft or prepare this document. I’m not sure when this was created. I had no input in drafting it and no input in looking for the €15m.”

He added that he had no contact with Anglo, their lawyers, or the financial regulator over the deal.

The trial continues.

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