‘Unjust’ to jail Anglo duo

A judge has ruled that it would be “incredibly unjust” to send two Anglo banking executives to jail as they were led into “error and illegality” by a state agency, the country’s financial watchdog.

Anglo’s former head of lending in Ireland, Patrick Whelan, and the bank’s former finance director, William McAteer were found guilty almost two weeks ago of giving illegal loans to developers to buy shares in the bank, a breach of section 60 of the 1963 Companies Act.

However Judge Martin Nolan yesterday said the attitude and behaviour of former Financial Regulator Patrick Neary had complicated the issue of sentencing, spared the two ex-bankers jail and adjourned their sentencing to assess suitability for community service.

His ruling included a damning assessment of the regulator’s failure to stop the deal to unravel a doomed €2.4bn gamble on Anglo’s shares by former billionaire Seán Quinn.

Referring to the financial regulator’s role in the Maple scheme, the judge said: “It would be most unjust to jail these two men when I feel that a state agency had led the two men into error and illegality”.

Father-of-two McAteer, 63, of Rathgar, Co Dublin, and Whelan, 52, another father of two, from Malahide, Co Dublin, were convicted by a jury on April 17, following a 48-day trial.

Judge Nolan said it seemed to him the regulator was more interested in solving the problem of Mr Quinn’s interest in the bank through risky investment products than in complying with the technicalities of the law.

In his ruling, Judge Nolan said: “I find it incredible that red lights didn’t go off someplace in the regulator’s office and the appropriate legal advice was not sought.

“[Neary’s assistant, Con] Horan and Mr Neary were more anxious to solve the problem than to comply with the law. Their overarching purpose was to save the bank and the banking system.”

He added: “It seems to be by not taking action and not warning the bank, they [financial regulator’s office] gave a green light to lending for the purposes of buying shares. It seems to me that anybody in the bank could have, and probably did, come to the conclusion there is no legal bar to the bank lending for purpose of buying shares.

“I do not believe there was any venal motive on the part of Mr Whelan or Mr McAteer. It was a genuine if misguided attempt to save their bank. Necessity does not give parties the right or privilege to break the law.”

Sinn Féin finance spokesman Pearse Doherty said: “The public have been forced to serve a jail sentence because of bankers’ crimes.

“The judge in the Anglo trial has correctly pointed out that other bankers and agencies share the blame for what happened at Anglo.

“However, two bankers were found guilty of a corporate crime, the only bankers to date to have been convicted. Their sentence — community service. While the families face poverty, unemployment, emigration, and other hardships, these two bankers today face community service. Who has got the better deal?”

Judge Nolan adjourned the case until July 31 to allow the probation services to compile reports on the two men’s suitability for community service. They faced a maximum of five years in prison and/or fines of €6,348.