The Cedar Lounge Revolution

I wish I could borrow, like the Anglo Irish 10 can borrow… February 21, 2009

Let’s reconsider those ‘heroes’ of the Anglo Irish 10 once more…

Mr O’Connor in his introduction to the [PricewaterhouseCoopers] report revealed that the 10 investors who bought a 10 per cent shareholding in the bank last year, using loans from the bank, were longstanding clients of the bank.

He said they had been given loans totalling €451 million, of which €83 million has been repaid. It was likely that €300 million of the money lent will now be written off as the security on this amount is limited to the shares purchased with the money. Mr O’Connor said “the bank will seek repayments under the borrowers’ recourse obligations as necessary” in relation to the remainder of the money lent.

Quite some ‘loan’ I think we’ll agree where one need only pay back a little under 25%. Quite some loan.

We see other ‘heroic’ actions as described in the PricewaterhouseCoopers report on Anglo Irish Bank released last night:

Major clients of [iconic] Anglo Irish Bank have been mothballing development projects, running up interest bills and trying to sell off assets, according to a report on the now nationalised bank released last night.

And…

…the bank has a number of very large exposures with approximately 15 customers having loans in excess of €500 million each.

…directors of the bank were involved in massive borrowing from the bank in the financial year to the end of September last and that one €8 million loan to a director was secured against the bank’s shares.

…At least some of the loans to directors are now expected to be written off because Anglo shares held by directors have lost their value, executive chairman Donal O’Connor said in his introduction to the bank’s 2008 annual report.

And what of the ‘generals’ who had overseen this situation and are regarded as necessary to fight this ‘war’, at least as Ulick McEvaddy sees it?

The report further shows that a number of senior directors at the bank received huge remuneration payments during a year that saw such a loss of confidence that there was a run on deposits.

Former chief executive of the bank David Drumm was paid €2.1 million in 2008, while the disgraced former chairman Seán FitzPatrick received €539,000. Former head of Irish operations Tom Browne, who retired in November 2007, received a payment of €3.75 million “in recognition of his contribution to the group”.

What a contribution! What a bargain! What heroes!