Belfast Telegraph

Irish PM Brian Cowen 'may have misled Dail' over banking crisis

Taoiseach Brian Cowen.
Taoiseach Brian Cowen.

Taoiseach Brian Cowen repeatedly failed to tell the Dail that he was contacted by Anglo Irish Bank chairman Sean FitzPatrick about the share ownership crisis in the bank.

The value of the bank's shares was collapsing in March 2008 -- and part of the reason was that knowledge was growing in the markets of the gamble that businessman Sean Quinn had taken on acquiring 25pc of the bank.

Mr Cowen has admitted that he took a call on his mobile phone from Mr FitzPatrick while he was on a St Patrick's Day visit in Kuala Lumpur in March 2008 in which he was told about the problem of Mr Quinn's secret stake.

But in a statement last night, Mr Cowen said he had been informed about Mr Quinn's shareholding in Anglo Irish Bank by the Central Bank Governor before getting the phone call from Mr FitzPatrick.

He said he told Mr FitzPatrick -- who claimed that market speculators were trying to drive down Anglo's share price -- that he would refer the issue to the governor of the Central Bank.

In the Dail, he repeatedly told TDs that he had been informed about the problem by official sources -- the Department of Finance, the Financial Regulator and the then Central Bank governor John Hurley.

Labour finance spokeswoman Joan Burton said Mr Cowen may have misled the Dail by failing to disclose that he had first learnt about the problem from his "golfing pal Sean FitzPatrick".

"At best, the Taoiseach was being economical with the truth. At worst, he deliberately misled the Dail," she said.

Mr Cowen was asked specifically about his knowledge of Mr Quinn's stake in Anglo Irish Bank by Fine Gael leader Enda Kenny and Labour leader Eamon Gilmore on February 17, 2009.

"A meeting took place last March at which the (Central Bank) governor indicated to me, as Minister for Finance, that a situation was developing in regard to the contracts for difference issue in Anglo Irish Bank," he said.

The "contracts for difference" were bets made by Mr Quinn that the value of the 25pc of Anglo shares he had rights to would rise --and that he would be able to make a huge profit. But when the value of the shares began to fall, he was left with losses of ?2.5bn -- and Anglo was desperate to find other buyers to take the shares. It secretly lent money to a group of key customers -- the "Maple Ten" -- to buy out Mr Quinn's shareholding. This transaction, which was not revealed to the markets at the time, is currently being investigated by gardai and the Office of the Director of Corporate Enforcement. Mr Cowen again did not mention the information provided to him by Mr FitzPatrick when he was quizzed in the Dail again the next day about this "Golden Circle" of Anglo customers.

He again stated that official sources had informed him about the problem with Mr Quinn's large stake in Anglo.

"As Minister for Finance I became aware, from contacts between the Department of Finance, the governor and the Financial Regulator over the course of last year, that a large overhang of shares were held by the Quinn group and related persons in the family," he said on February 18, 2009.

Belfast Telegraph


From Belfast Telegraph