I made some assumptions, says former Anglo lending manager
A lending manager at the former Anglo Irish Bank has been today telling a court about her concerns about the debts built up by the Quinn Group in 2007.
Elma Kinane was on Team 91 which was responsible for dealing with Sean Quinn and with issuing loans to the Maple 10.
In late 2007 she was dealing with lending the Quinn Group funding for a shopping centre and warehouse when she first heard Mr Quinn had built up a Contracts for Difference (CFD) position in the bank.
In November Team 91 were told that the Quinn Group needed €150m to cover margin calls they had to pay on the CFDs.
In December, she was told Mr Quinn needed an additional €500m to cover new margin calls.
She said that David Drumm “was keen that we accommodate the request” and asked that they find a way to get it done.
Ms Kinane said that in 2008 her team started to have concerns about Sean Quinn’s exposure. In March she put together a memo outlining these concerns.
The witness said the concerns arose because the Quinn Group could not repay even a small amount of money and had failed to honour some commitments requested by the bank.
Ms Kinane said she was also responsible for drafting the loan application for the Maple 10 investors but that there was nothing underhand in the way she prepared the associated documents.
On July 10, 2008 she and her boss were called into Pat Whelan’s office and given a list of names.
This was a list of 10 of the bank’s largest customers.
Ms Kinane was not able to confirm a proposition from the defence that these 10 men were responsible for 23% of Anglo’s loan book.
She said Mr Whelan asked them to draft facility letters offering the ten men €60m each in order to buy 10 million Anglo shares. He also gave them a template to be used for the letter.
A document prepared for one of the Maple 10’s loan application was shown to the court. The jury were told all the applications were exactly the same.
Mr Kinane agreed that she drew up the document including the line that stated: “Given the opportunities (the investor) has approached us seeking a share dealing facility.”
She said she was never told that the investors hadn’t approached the bank and only found out later.
Ms Kinane said she had assumed the investors had approached the bank but that Pat Whelan had given them no background on the deal.
She said that they had to prepare these documents quickly and that she made the assumption that these wealthy individuals saw an opportunity in buying the shares.
“I had limited knowledge, I made some assumptions and assumed they would be reviewed by the right parties,” she said.
Counsel for Mr Whelan, Lorcan Staines BL, asked Ms Kinane: “If there was someone in this room who would say there was something underhand in the way you prepared these memos, what would you say?”
“They would be wrong about that,” Mr Kinane replied.
She said her team had limited knowledge and did what they were instructed.
“If there was any information that was incorrect I would have expected it to be reviewed and removed prior to signing,” she added.
It was a slightly early finish for the jury, who were dismissed by Judge Nolan with the warning that there is to be no “Googling or investigating” over the weekend.
The case will resume at 10.30am on Monday morning when Anglo’s former chief financial officer Matt Moran is due to take the stand.