Department of Finance told of Anglo's plan to give loans to buy shares

A senior Department of Finance official was told in July 2008 that there could be some lending by Anglo Irish Bank to buy its own shares but that it would be “short term”.

The trial of three former Anglo executives has heard that Kevin Cardiff, who held the post of second secretary in the department, was told a group of wealthy individuals would be buying the shares in an effort to unwind Seán Quinn’s 29% control of the bank.

Mr Quinn had built up the stake in the bank through Contracts for Difference (CFDs) which are investment tools that involved betting on a share without buying it. The trial has heard that Anglo and the financial regulator were anxious to unwind the CFDs by having investors buy the shares.

Mr Cardiff, who was later appointed secretary general of the department, told the court that they were concerned about Mr Quinn’s control of the bank because “such a large holding could be a target of speculation”.

He said that speculators could put pressure on the investor to sell their CFDs by driving the share price down.