Deal done in haste is now a millstone around developer

Green_Bear · February 25, 2009, 6:19am

Deal done in haste is now a millstone around neck of ‘Anglo 10’ developer
Wednesday February 25 2009
independent.ie/national-news … 51932.html

He has been expecting to answer his front door to gardai since the ‘golden circle’ scandal first broke nearly a fortnight ago.
So for one of the 10 long-standing Anglo customers – dubbed the ‘golden circle’ after they were loaned a total of €451m to buy stock in the bank last summer – news that the Fraud Squad had begun searching the bank’s headquarters yesterday brought no comfort.
But he has had no query from detectives, not a raised eyebrow from the Financial Regulator.

According to sources, a meeting must have been called when they believed Sean Quinn’s overhang would bring down the company if his shares were released on to the market.
Each executive who had a close relationship with a wealthy customer agreed to target their client and put the sweetheart share deal to them.
“Some of these customers had a more intimate relationship with their bankers than their wives,” said a source. “And some of them felt they owed the bank a favour and others might have been deeply in debt to the bank and felt they had no choice.”
Individual members of the ‘golden circle’ were not identified to each other and some of those approached said ‘no’, according to the developer.
“The so-called ‘golden circle’ were developers, with a specific knowledge of property, and they would not have known much about the stock market,” said a source.
The developer told the go-between that the bank told him about the unwinding of Sean Quinn’s CFD position and how he could help the country and Anglo by buying some of the shares he (Mr Quinn) couldn’t take up.
The bank executive was asked the same questions as the Financial Regulator asked of Anglo: was the share deal legal and were the brokers satisfied no stock exchange rules were breached?
The Anglo executive assured him the bank’s solicitors had signed off on the proposal and that a major international broking company, Morgan Stanley, would handle the deal.
The developer says he was given some comfort when he heard Morgan Stanley was involved but he was still very reluctant to go ahead, that he was never motivated by any potential profit and that the whole deal made him very uncomfortable.
He was just one of the 10 long-standing Anglo customers who were loaned a total of €451m to buy a whopping 10pc of the bank’s stock through nominee companies last July.
It should have been a so-called sweetheart deal: 75pc of the loans were secured against the shares and the remaining 25pc against personal assets.
But, as the recession bites deeper and the property market slumps, it is not clear how many of the 10 have any substantial wealth left.

Ivor_Lot · February 25, 2009, 8:45am

It would bring a tear to a glass eye!

spqr64 · February 25, 2009, 9:09am

Its more like a kick in the crystal balls or was sold to these guys with a particular slant, I also find it hard to believe that they did this for the love of Ireland as we all know over the last ten years charity begins at home and with some people it stays there as well.

ewd3 · February 25, 2009, 10:13am

Billionnaire Moron cries himself to sleep

sounds about right.
Do not underestimate the fact that the people who were supposedly the richest because they borrowed the most were in fact the biggest idiots

sharper · February 25, 2009, 10:18am

Like the folks who bought second and third houses with the expectation of making a killing renting them out and are now in severe difficulty.

Libero · February 25, 2009, 11:47am

A millstone? But the debt has been declared irrecoverable by the lending bank.

Apart from that, we are being asked to swallow the line that the “developer” was of a class that knew little about financial markets (according to an unnamed source with a perfectly quotable “better than his wife” anecdote) and were lead astray, under duress, by big bad relationship managers and Morgan Stanley. Yet, the developer was astute enough to cover his ass and ask if any stock exchange regulations were breached. And lo, the bank told him no and he believed it (without, presumably, asking for copies of counsel’s opinion).

If you swallow that incongruence, you’ll swallow anything.

And the whole stinking piece of spin finishes with the risible claim that the poor unfortunates may not have any money left anyhow.

This PR spin is adding insult to injury.

quackquack · February 25, 2009, 3:35pm

LAGOS, NIGERIA.

Dear Anglo Investor/Patriot/Green Jersey Wearer

CONFIDENTIAL BUSINESS PROPOSAL

HAVING CONSULTED WITH MY COLLEAGUES AND BASED ON THE INFORMATION GATHERED FROM THE NIGERIAN CHAMBERS OF COMMERCE AND INDUSTRY, I HAVE THE PRIVILEGE TO REQUEST FOR YOUR ASSISTANCE TO TRANSFER THE SUM OF $47,500,000.00 (FORTY SEVEN MILLION, FIVE HUNDRED THOUSAND UNITED STATES DOLLARS) INTO YOUR ACCOUNTS. THE ABOVE SUM RESULTED FROM AN OVER-INVOICED CONTRACT, EXECUTED COMMISSIONED AND PAID FOR ABOUT FIVE YEARS (5) AGO BY A FOREIGN CONTRACTOR. THIS ACTION WAS HOWEVER INTENTIONAL AND SINCE THEN THE FUND HAS BEEN IN A SUSPENSE ACCOUNT AT THE CENTRAL BANK OF NIGERIA APEX BANK.

WE ARE NOW READY TO TRANSFER THE FUND OVERSEAS AND THAT IS WHERE YOU COME IN. IT IS IMPORTANT TO INFORM YOU THAT AS CIVIL SERVANTS, WE ARE FORBIDDEN TO OPERATE A FOREIGN ACCOUNT; THAT IS WHY WE REQUIRE YOUR ASSISTANCE. THE TOTAL SUM WILL BE SHARED AS FOLLOWS: 70% FOR US, 25% FOR YOU AND 5% FOR LOCAL AND INTERNATIONAL EXPENSES INCIDENT TO THE TRANSFER.

THE TRANSFER IS RISK FREE ON BOTH SIDES. I AM AN ACCOUNTANT WITH THE NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC). IF YOU FIND THIS PROPOSAL ACCEPTABLE, WE SHALL REQUIRE THE FOLLOWING DOCUMENTS:

(A) YOUR BANKER’S NAME, TELEPHONE, ACCOUNT AND FAX NUMBERS.

(B) YOUR PRIVATE TELEPHONE AND FAX NUMBERS – FOR CONFIDENTIALITY AND EASY COMMUNICATION.

(C) YOUR LETTER-HEADED PAPER STAMPED AND SIGNED.

ALTERNATIVELY WE WILL FURNISH YOU WITH THE TEXT OF WHAT TO TYPE INTO YOUR LETTER-HEADED PAPER, ALONG WITH A BREAKDOWN EXPLAINING, COMPREHENSIVELY WHAT WE REQUIRE OF YOU. THE BUSINESS WILL TAKE US THIRTY (30) WORKING DAYS TO ACCOMPLISH.

PLEASE REPLY URGENTLY.

BEST REGARDS

Anglo Board.

ewd3 · February 25, 2009, 3:55pm

class

Ivor_Lot · February 25, 2009, 5:19pm

Well the piece is written by Sam Smyth! That beacon of journalistic integrity and “journalist” of choice for leaked PD and FF stories. McDowell in particular was fond of feeding him info. to aid the persecution of another journo!
A class act!

High_Noon · February 26, 2009, 12:17am

Not only is this article spin, it’s blatant spin. When I read it I can’t help but think of that line from Hamlet “The lady doth protest too much, methinks”.

The clumsy attempt to shift all blame to Anglo’s senior executives is done with absurd contradictions. The claim that amazed me the most: one of the country’s most successful businessmen and entrepreneurs doesn’t understand shares and blindly follows the advice of salaried advisors. Waaaa??? If you believe that…

Check out the pathetic attempts to paint him a patriot, a hero putting the wellbeing of the Irish financial system ahead of any personal gain. Yeah, right!

And how about the attempt to deny collusion? It’s so clumsy its true nature obvious. It’s like his lawyer has just read “A Paint By Numbers Approach To Defending An Alleged Market Manipulator: Chapter 3 – No Matter What, Say You Acted Alone”.

Coles2 · February 26, 2009, 1:21am

Indeed. Worth keeping track of Sam Smyth’s roll in ‘media management’ throughout this scandal.

xman · February 26, 2009, 3:19am

Well, that’s grand so. Nothing to see here folks.

Wealthy developer borrows money to invest in shares. Shares now worthless. Developer repays loan including interest and can claim CGT capital loss from taxman.