Neary 'not alarmed' at Quinn stake
Ireland's former financial watchdog has said he was not alarmed when one-time billionaire tycoon Sean Quinn called personally at his office and mentioned he had a secret shareholding in Anglo Irish Bank.
Patrick Neary told the fraud trial of three former Anglo executives that Mr Quinn was free to invest in Contracts for Difference (CfD) without being questioned by regulators.
The bankrupt businessman built up a secret and ultimately doomed 2.4 billion euro stock holding using the then unregulated contracts.
Former Anglo bankers Sean FitzPatrick, 65, Willie McAteer, 63, and Pat Whelan, 51, have pleaded not guilty at Dublin Circuit Criminal Court to 16 charges of providing unlawful loans for clients to buy shares in the bank to unwind the Quinn holding in July 2008.
Mr Neary repeatedly denied knowledge of Mr Quinn's secret CfD position before Goopd Friday March 21 2008 despite the private and unplanned meeting with him in the regulator's headquarters in Dublin two months earlier.
Mr Neary said: "His private investments where his own business.
"He (Mr Quinn) ventured to tell me he had a small portfolio of CfDs in Anglo and Ryanair and he was getting rid of them.
"I don't think it raised any alarm with me when he said he had small positions and he was going to liquidate them. He was not going to keep them."
The court was told Mr Neary held a series of meetings in relation to Mr Quinn and his role as chairman of the now defunct Quinn Insurance. Some 288 million euro of its money was believed to have been used to cover some of the Quinn losses on CfDs.
Mr Neary also had discussions with former Anglo chief executive David Drumm - who is not on trial and is living in the US - but said the pair were not in constant contact in relation to Quinn position or Anglo in late 2007 or 2008.
Mr Neary also denied deliberately starting a statement to gardai over the Anglo loans-for-shares issue from what he knew on March 21 2008.
Mr Neary said: "I began the statement in good faith based on the information I had on March 21 (2008).
"If it was not an accident, what is it?
FitzPatrick, former chairman and one-time chief executive, former chief risk officer McAteer and former managing director of lending Whelan, have pleaded not guilty to providing unlawful financial assistance to individuals in July 2008 for the purchase of shares in the bank, contrary to Section 60 of the Companies Act.
Whelan has also pleaded not guilty to a further seven charges of being privy to the fraudulent alteration of loan facility letters to seven individuals. FitzPatrick, of Whitshed Road, Greystones, Co Wicklow; McAteer, of Auburn Villas, Rathgar, south Dublin; and Whelan, of Coast Road, Malahide, Co Dublin, are on bail.
The trial, which began in February, is expected to last for another several weeks.
Mr Neary resigned from his position as financial regulator in January 2009 at the height of the financial crisis in Ireland.
Anglo Irish Bank was nationalised around the same time.
He said he had no recourse to notes, diary markings or files at the time he gave his statement to gardai.
"I did not look at files or notes. I had no sinister reason for (not) doing that other than I wished to assist the gardai," he said.
During cross examination by Patrick Gageby, senior counsel for McAteer, the one-time watchdog was shown a series of rolling figures dated from February 2008 which detailed the extent of the CfD position built up by Mr Quinn and some of his losses.
Mr Neary denied seeing the information at the time.
The figures had been emailed to the regulator's HQ by a senior member of staff in the Quinn Group and showed investments ranging from 2.3 billion euro (£1.93bn) of a CfD position, marked as "gross exposure", combined with margins of up to 670m euro (£563m), marked "supporting that position".
Mr Neary insisted he did not see the information before Good Friday that year.
He said he had to take Mr Quinn "at his word" when he told him in January 2008 that he only had small CfD stock holdings in Anglo and Ryanair but was looking to get rid of them.
The former regulator will be further cross examined tomorrow morning.