TWO EX-ANGLO BANK EXECUTIVES INDICTED AFTER ARRESTS
July 23, 2012 * WSJ
-- Former executives indicted over Anglo Irish Bank Corp. probe
-- First indictments in years-old probe
-- Ireland's Justice Minister: now up to the courts
(Rewrites and adds details.)
By Eamon Quinn
DUBLIN--Authorities in Ireland arrested and indicted Monday two former executives of Anglo Irish Bank Corp. for allegedly encouraging a huge share-support scheme, marking the first charges to be brought in an investigation of the defunct lender that was central to the country's banking crisis.
A Dublin court heard six indictments against William McAteer, aged 61, a former finance director at Anglo Irish, that he unlawfully "authorized" or "permitted" funds to be given to named individuals to buy shares in the bank as the lender's stock hurtled toward collapse in July 2008.
Pat Whelan, aged 50, a former Anglo Irish managing director in Ireland, was also arrested Monday. He was charged on sixteen counts relating to similar matters, the Irish Courts Service said.
The indictments come as investigations continue into the affairs of the bank that has cost Ireland more than any other lender since the onset of the country's deep banking debt crisis five years ago.
Mr. McAteer, was first arrested and released in March 2010, and re-arrested and again released for a second time last year, as authorities investigated Anglo Irish, the now nationalized commercial property lender that has cost the Irish government about 30 billion euros ($36.4 billion).
In 2010, former Anglo Irish chairman Sean FitzPatrick was also arrested and released after questioning by police.
The Office of the Director of Corporate Enforcement, a government agency involved in the probe, had in recent months said its investigations into Anglo Irish were continuing, while some parts of the probe have been sent to Ireland's Director of Public Prosecutions, the prosecuting authority which decides whether to bring criminal indictments to trial.
Anglo Irish was merged last year with another so-called "dead" bank, Irish Nationwide Building Society, and jointly renamed the Irish Bank Resolution Corp. It will be run down over several years as part of the Irish government's efforts to limit the huge costs of the country's banking rescue.
Once Ireland's largest commercial property lender, Anglo Irish recklessly provided billions of euro to real-estate projects in Ireland, London and the U.S. Most of the loans had to be bought at huge discounts by Ireland's so-called bad bank--the National Asset Management Agency--on behalf of Irish taxpayers when property developers could not make their repayments amid a severe property market collapse.
The costs of saving its banks eventually forced Ireland to strike a bailout deal with the European Union and International Monetary Fund in late 2010.
The government has in the past said that it has been forced by the euro zone's authorities to repay in full senior unguaranteed bonds in Anglo Irish debt. It is now seeking to strike a deal with the euro zone to "retro-finance" the huge funds it has pumped into six banks to keep them from collapsing.
The authorities are investigating several aspects of the Anglo Irish affair for possible criminal breaches of Irish and European law.
Irish fraud police are examining the provision of funds by Anglo Irish to customers to buy its shares. They are also investigating so-called back-to-back deposits of about EUR7.4 billion made between Anglo Irish and another lender, Irish Life and Permanent in September 2008.
Meanwhile, the ODCE had said it is investigating loans made to former Anglo Irish directors which may not have been adequately reported by Anglo Irish for many years, and the content of Anglo Irish's 2008 financial reports and statements and the provision, in 2008, of a loan to one of the bank's directors.
Lawmakers had questioned the time taken to investigate Anglo Irish's affairs.
However, Ireland's Justice Minister Alan Shatter warned Monday about comments that could "in any way prejudice the outcome of the criminal prosecutions that have been initiated."
"It is a matter now for our independent prosecution service under the direction of the Director of Public Prosecutions and our courts," he said in a statement.
Write to Eamon Quinn at eamon.quinn@dowjones.com
