No all-clear on Anglo deal - lawyer
A former lawyer for Anglo Irish Bank has denied giving the all-clear to a multimillion-euro loans-for-shares deal involving the bank's stock.
Robert Heron, who advised the now defunct lender in 2008 on a plan to unwind a secret 29% shareholding which threatened the bank's standing on world markets, said he had been unaware that a hand-picked group of clients were being lent money for the trade.
He told a sentencing hearing of former Anglo directors Pat Whelan and Willie McAteer - found guilty before Easter over some of the loans - that he did not advise bankers that the plot did not breach company law.
The pair were convicted 11 days ago at Dublin Circuit Criminal Court of illegally lending 450 million euro to a secret circle of Anglo clients - the Maple 10 - to unravel a doomed gamble on the bank's shares by former billionaire industrialist Sean Quinn.
Whelan and McAteer were found not guilty of illegally lending money to five members of the Quinn family as part of the deal as the terms of those loans included a recourse clause which required them to repay the money in full.
Mr Heron, at the time a partner at law firm Matheson Ormsby Prentice which is now known as Matheson, said he had no knowledge that the deal included money being lent to the 10 hand-picked Anglo clients.
The solicitor, who no longer works for Matheson, said he was only aware at the time that the plot involved members of the Quinn family buying up the tycoon's investment.
"There was no reference to anybody other than the Quinn children being lent to by Anglo," he told the court.
Mr Heron told the court that all he had been aware of in July 2008 was that investment bank Morgan Stanley, which was brought in to carry out the Quinn unwind, had sourced investors to buy almost 10% of the holding.
He penned a summary of the legal advice he gave Anglo which was given to the Financial Regulator after the transaction was carried out in the middle of July 2008 - the only written document which records the advice given to the bank.
He said he advised Anglo on whether there were issues of insider dealing, market abuse, takeover issues and also whether the loans could be classed as the ordinary course of business under an exemption clause in section 60 of the Companies Act - the offence Whelan and McAteer were found guilty of.
Mr Heron said he set out the advice in six points in the letter but it was for bankers to decide whether the lending was in compliance with the law.
"The opinion is qualified, in effect, if the lending to the Quinn family was in the ordinary course of business and the loans did not reduce the net assets of the bank," he said.
Whelan, 52, of Malahide, Co Dublin, and McAteer, 63, of Rathgar, Dublin, are on bail. The sentencing hearing will finish tomorrow.