Former Anglo Irish Bank head of lending Tom Browne is seeking court orders requiring the bank to disclose extensive documents concerning loans made to businessman Sean Quinn and his family to fund liabilities incurred as a result of transactions made to fund the purchase of shares in Anglo itself.
Anglo has brought proceedings against Mr Browne over unpaid loans of some €50 million but he claims those loans are vitiated due to alleged fraudulent misrepresentation of Anglo via its “silence” in the last three months of 2007 over loans to Sean Quinn and other matters relevant to its share price.
Various loans were issued to artificially enhance the bank’s share price, Mr Browne claims.
Mr Browne alleges Anglo advanced millions of euro to him in late 2007 to buy its shares when it and various State authorities all knew Anglo had loaned substantial sums of money to Mr Quinn in November 2007 to fund Mr Quinn’s liabilities concerning Contracts for Difference (CFD) transactions to fund the purchase of shares in Anglo.
The Bank failed to tell him about matters which, if known to the financial markets, would have had “a devastating effect” on Anglo’s stability, Mr Browne claims. He claims he would not have executed his share options in late 2007 if he was aware of these matters and consequently would not have suffered losses when the bank’s share price collapsed.
Discovery issues in the case were before Mr Justice Peter Kelly today who heard, in addition to the Quinn loan documents, Mr Browne is also seeking a wide range of internal documents aimed at ascertaining the state of knowledge from 2007 within the bank about the fall in its share price.
He also wants documents related to the reasons for the movement of €7.3 billion in loans from Anglo to Irish Life & Permanent. All documents related to consideration by Anglo senior management of Mr Browne’s indebtedness over the duration of the loan facilities are also sought.
Anglo said it will discover a range of documents but contended the discovery being sought by Mr Browne in support of his claims of fraudulent misrepresentation is too extensive. Many of the documents being sought are irrelevant, it argued.
After hearing arguments from John Rogers SC, for Mr Browne, and Paul Gardiner SC, for Anglo, Mr Justice Kelly said Mr Browne’s discovery application was very wide-ranging in its scope and possibly very deep in its thrust and he wanted some time to consider the matter. He hoped to rule next week.
The judge also suggested some of the information being sought by Mr Browne’s side, including about the Quinn loans, might be secured more effectively by serving interrogatories (questions requiring sworn answers) on Anglo.
Earlier, the judge upheld arguments by Anglo that Mr Browne should discover a range of documents related to his purchase of shares in Anglo and purchase of properties and other investments, including all documents related to purchase of CFDs in Anglo, Bank of Ireland and Allied Irish Banks.
Mr Browne had contended the discovery sought was too extensive and not required for the proper determination of the proceedings.
Last December, Mr Justice Kelly ruled that Mr Browne, “Managing Director Lending Ireland” with Anglo between early 2005 and 2007, may defend the bank’s €50 million claim against him on grounds including the bank was guilty of fraudulent misrepresentation in allegedly failing to tell him in 2007 about the purchase of 28 per cent of its shares by Sean Quinn.
The case against Mr Browne, Ferney Hill, Brighton Road, Foxrock, Dublin, arises from various loans of Stg 31.6 million and Stg 1.91 million; €11.6 million and $765,976 to Mr Browne, including a loan of February 2008 to buy property at Bishopsgate in London.
Mr Browne received a total of €8.19 million in salary and benefits from Anglo while head of lending between 2005 and 2007, the court previously heard. He was paid €4.43 million in salary and benefits and an ex gratia payment of some €3.75 million on his departure.
