I asked: 'Is this transaction legal?' - Developer gives evidence at Anglo trial

A Maple 10 investor has said he was on holiday in France when approached by two Anglo Irish Bank executives trying stop a run on the bank's shares.

Property developer Gerry Maguire is giving evidence at the trial of Pat Whelan, Willie McAteer and Sean FitzPatrick, who deny providing unlawful financial assistance to members of the Quinn family and the Maple 10 to buy shares in the bank in July 2008.

Gerry Maguire says he was on holiday when former Anglo CEO David Drumm and former lending director Pat Whelan flew out to meet him in Nice July 2008.

Mr Whelan had already told the developer on the phone a day earlier that his assistance was being sought because the bank's shares were under pressure from hedge funds' short selling.

He told the jury Mr Whelan said they had looked for investment from financial institutions without success and were now looking for individuals to invest in the bank short term “to inspire a bit of confidence and to fight off the attack”.

Mr Maguire said he was aware the shares were in trouble as he had invested in Anglo previously.

He said over a matter of months the share price had fallen from €13.50 to €6.50.

Mr Maguire asked Mr Whelan if he wanted him to return to Ireland. Mr Whelan said no, that he and David Drumm would fly to meet him in Nice a few days later.

The deal was presented to Mr Maguire over a two-hour meeting. He would buy shares in Anglo and be allowed sell them in an “orderly fashion” when the share price went back up to €6.

He said he agreed to the proposal, which involved a loan facility to cover the cost, but immediately asked at the Nice meeting: "Is this transaction legal?".

“They said they wouldn’t be approaching me with it if it wasn’t legal,” he replied. “They said they had sought legal advice and the legal advice was that it was in order.”

Secondly he said he asked them if the Central Bank was aware of the deal.

The Anglo executives responded that the Financial Regulator was aware of it and approved.

He signed a letter of acceptance and the shares were bought on July 16, 2008 at a price of €4.40.

Anglo loaned him about €45m to buy 10.2 million shares.

Mr Maguire told prosecuting counsel Paul O’Higgins SC that he had “limited” knowledge of share deals of this size.

“If everything went well there was a strong probability of a profit,” he said. “The bank’s position took priority and well and good if we made a profit and we expected to make a profit.”

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