I was anxious to help Anglo, says property developer
One of the so-called Maple 10 group has told a court Anglo Irish Bank was very good to him in business - and that he was anxious to help when approached to buy its shares in July 2008.
Property developer John McCabe was giving evidence in the trial of former Anglo executives Pat Whelan, Willie McAteer and Sean FitzPatrick who deny providing unlawful financial assistance to 16 individuals to buy the bank's shares.
John McCabe said he dealt with Anglo from the 1980s and drew down around €500m in loans from them over the years for development purposes.
These loans were typically at interest rates of between 1.5% and 3%.
He knew Pat Whelan as Anglo’s head lender in Ireland and had dealt with him for the previous 15 years.
On July 9, 2008 he got a call from Mr Whelan who said he had a proposition for him. The next day Mr McCabe met Mr Whelan and Anglo CEO David Drumm.
The Anglo men told him that a major investor controlled 25% of Anglo shares and was only willing to redeem 15%. He was later told the identity of this investor.
He was told that the bank was looking for four or five long term clients to buy the remaining 10% of the stock. They wanted Mr McCabe to buy a 1% stake.
Mr McCabe said he asked if it was legal and was told it was “totally legal”.
He said he was also told the Central Bank and the Financial Regulator were aware of the plan and that the Regulator was anxious to proceed with it.
They discussed him borrowing about €60m to buy the shares, with 25% recourse to him.
“I made all the inquiries I could and was happy with what I heard from those two gentlemen,” he told counsel.
Mr McCabe said he had nearly no experience in stocks and shares. He “wasn’t into them” and “didn’t want to get into them”.
He said his main reason for getting involved was that he wanted to co-operate with the bank and to keep doing business with him.
“I was anxious to help when I was asked,” he said. “The bank had been very good to me.”
After a meeting that he thinks may have lasted around an hour, he agreed to the proposal and signed a facility letter.
Mr McCabe agreed with Mr Whelan’s defence counsel Brendan Grehan SC that his memory of details was “absolutely” hazy.
He agreed that he made his garda statement over three years after these events occurred and had to rely on documents for a lot of the details.