COURT RULING:ANGLO IRISH Bank must provide sworn information about the amount and purpose of loans given by it to businessman Seán Quinn, members of his family and entities under their control in the three years to November 2007, the Commercial Court has ruled.
Mr Justice Peter Kelly has also directed Anglo to provide, in its forthcoming action for €50 million judgment orders against its former head of lending Tom Browne over unpaid loans, sworn information about the amount and purpose of loans allegedly given to 10 persons to acquire the Quinn shareholding in Anglo. Documents evidencing the bank’s consideration of the effects of such loans must also be provided.
Other documents relating to internal review or consideration within Anglo of the fall in its share price from early 2007 to January 7th, 2009 are also to be discovered.
While Anglo had offered to produce relevant board packs and minutes of board meetings during that period, Mr Browne was also entitled to any minutes of meetings conducted at senior management level within the bank where a review of its falling share price was considered, the judge said.
The bank must also specify the amounts of loans given to directors and/or officials to buy its shares and discover documents concerning its consideration of the effects of providing those loans.
There appeared to have been “a lot of such loans” as some 35,000 documents potentially relevant to that category were generated between 2006 and 2008, the judge noted.
The bank is also to provide sworn information about the reasons for the movement of €7.3 billion in loans from Anglo to Irish Life Permanent in autumn 2008.
The bank had agreed to make discovery of a range of documents, including those concerning the knowledge of its board of the nature, extent and/or costs of the shareholdings held or controlled by the Quinn parties, whether under contracts for difference or otherwise. It objected to some other categories on grounds including the extensive nature of the documents sought and irrelevance.
Anglo’s claim against Mr Browne, Ferney Hill, Brighton Road, Foxrock, Dublin, arises from various loans, including 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.
Mr Browne has counterclaimed the €50 million loans are vitiated due to alleged fraudulent misrepresentation of Anglo via its “silence” in the last three months of 2007 over loans to Mr Quinn and other matters relevant to its share price. Various loans were issued to artificially enhance the bank’s share price, he alleges.
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, he claims.
If aware of those matters, he would not have executed his share options in late 2007 and consequently would not have suffered losses when the bank’s share price collapsed, he alleges.
Anglo has denied any of the matters raised by Mr Browne amount to a defence and has denied many of his claims.
Mr Justice Kelly yesterday delivered a judgment dealing with 16 categories in which discovery was sought and adjourned the matter to next month for further directions.
In about half of the categories, he ruled discovery could be made as offered by Anglo, including relating to the terms under which loans were made to Mr Browne, how those loans were considered within the bank and how they were to be repaid.
Certain matters in other categories – including relating to the Quinn loans – would best be addressed by the service on Anglo of interrogatories (questions requiring sworn answers), the judge ruled. He refused discovery in a small number of categories while, in some others, directed there should be discovery as sought by Mr Browne.
