Former Anglo Irish Bank chairman Seán FitzPatrick was borrowing millions of euro up to 2008 to invest in hotels, property syndicates and oil refinery projects, a jury has heard.
Mr FitzPatrick (68) is on trial accused of failing to disclose to auditors the extent of multi-million euro loans linked to him.
The State’s case is that loans taken out by the accused, his wife and family members increased from in the region of €10 million in 2002 to around €100 million in 2007.
The prosecution alleges that the amount of these loans was “artificially reduced” for a period of two weeks around the bank’s financial end of year statement by short term loans from other sources, including Irish Nationwide Building Society.
Mr FitzPatrick of Whitshed Road, Greystones, Co Wicklow has pleaded not guilty at Dublin Circuit Criminal Court to 27 offences under the 1990 Companies Act. These include 22 charges of making a misleading, false or deceptive statement to auditors and five charges of furnishing false information in the years 2002 to 2007.
Numerous applications
On day 62 of the trial the jury was shown numerous credit committee application forms and facility letters detailing loans extended to Mr FitzPatrick, his wife Triona and investment partnerships linked to the accused.
One document dated April 2005 gave details of facilities being approved to the couple for a total maximum of €4.8 million. The stated purpose listed a variety of different investments, including the Four Seasons hotels in Prague and Milan.
A loan facility linked to the accused for US$17million was for investment in a Nigerian oil refinery venture. The loan was to be reviewed by June 30th, 2006 when it would either be repaid or extended.
In 2005, a loan of €750,000 was extended to the bank’s then chief executive for investing in a golf resort in Hungary.
In the same year a facility to the accused and his wife with a limit of €13million was granted. This included US$550,000 for investing in a property syndicate on Long Island, New York.
On May 14th, 2008, Anglo extended a new limit of US$8millon to a loan facility for an investment partnership called the Great Irish Partnership. The accused was one of the partners.
Limit increased
The jury has already heard that by November 2007, Mr FitzPatrick had drawn down just over €103 million and his limit was increased to €120 million.
Deborah Rea, a former lending manager with Anglo, told the jury that Mr FitzPatrick's loans weren't any different to other customers and "in many cases they were a lot less".
She said that her team was managing a portfolio of around €1 billion and in this context the facilities to the accused “were rather small”.
She estimated that a couple of dozen people in the bank knew about the refinancing arrangement, including all six people on her lending team and on another team that had previously managed the loans.
The trial continues.
* This article was edited on January 19th, 2017