STATE-OWNED Anglo Irish Bank is pursuing a former director and one-time head of the bank’s Irish lending division Tom Browne for loans of about €45 million secured on shares in the bank and various property investments.
The bank issued legal proceedings against Mr Browne 10 days ago and an application to have the case entered into the Commercial Court list is scheduled to come before the court next Monday.
Mr Browne has loans of about €14 million secured on Anglo shares and further substantial borrowings secured on properties in Ireland and the UK. He also has hedging facilities with Anglo in relation to interest payments on some of his property investments.
Senior Anglo executive Ciarán McAreavey, who is handling loan dealings with former directors for the bank, has filed an affidavit in the legal action.
Mr Browne is thought to have substantial further borrowings with about eight other lenders.
He has blamed the nationalisation of Anglo in 2009 for his inability to repay his loans as they were secured on the shares and the bank’s collapse into State ownership rendered them worthless.
He wrote to associates last February saying that Anglo’s nationalisation destroyed a substantial part of the value of the security backing his loans and that the matter was “destined to end up in the courts” where he would defend himself.
Mr Browne was appointed a director of Anglo in 2004. He was a contender to take over as chief executive in 2005 when Seán FitzPatrick took over as chairman but he lost out to David Drumm.
As head of Irish lending, he oversaw the growth of the bank’s Irish loans from €19.4 billion in 2005 to €37 billion in 2007. He received a payment of €3.75 million from Anglo when he retired in November 2007 in recognition of his contribution to the bank.
Anglo is costing the Government €29.3 billion and up to €34.3 billion under a worst-case scenario if the property market fails to recover for 10 years.
The bank has incurred the heaviest losses on its Irish loan book and particularly on loans provided by the bank in 2006 and 2007.
Anglo’s court action against him is the first taken by the bank against a senior manager below Mr FitzPatrick or Mr Drumm.
The bank has not taken action against John Hughes, a senior AIB manager in Galway and a partner of Mr Browne’s in various investments, including a commercial property in Dockgate in Galway.
Mr Browne also has investments with another AIB manager, Tommy Hopkins, who was the main contact at the bank for property developers in the Dublin area.
Anglo has appointed KPMG as receiver over properties owned by Mr Browne including an office building in Bishopsgate, London and apartments in Yorkshire.
