Drumm points finger at Quinn ahead of sentencing
AHEAD of his sentencing today over illegal lending to business people known as the Maple Ten, disgraced banker David Drumm has pointed the finger at Cavan businessman Seán Quinn.
Lawyers for former Anglo Irish Bank executive Drumm, 51, said he came up with the fraudulent scheme in July 2008 in a bid to resolve a problem entirely created by former insurance boss Mr Quinn.
Drumm is due to be sentenced, for a second time in a month, at 2pm today at Dublin Circuit Criminal Court for his fraudulent dealings as an Anglo boss.
He pleaded guilty last month to ten counts of authorising or permitting Anglo to give unlawful financial assistance for the purchase of bank shares to the so-called Maple Ten group of Already jailed: David Drumm developers and businessmen between July 10 and 17, 2008.
The loans were part of a scheme designed to unwind a secret 28% stake that insurance chief Seán Quinn had built up in the bank.
Yesterday morning, Drumm was transferred to court from Mountjoy Blamed for crisis: Seán Quinn Prison, where he is serving a six-year sentence after he was convicted last month of conspiring to carry out a separate €7.2billion fraudulent scheme to prop up Anglo’s lodgement figures.
He appeared in court yesterday wearing a polo T-shirt and jeans. Judge Karen O’Connor adjourned the case to today for sentencing.
In his plea, Brendan Grehan SC, defending, asked the court to consider that the offences arose as a result of the growing financial speculation by Ireland’s then richest man, Mr Quinn, on Anglo shares. The bank’s share price peaked in May 2007 and after this, it gradually began to fall, resulting in Mr Quinn having to pay out each month on his losses.
Outlining how, instead of pulling out, Mr Quinn bought more positions on Anglo, Mr Grehan said: ‘He kept hoping if he bought more, he’d recover on losses he made.’
This led to Mr Quinn having a position, by mid-2008, of 28% of the bank’s shareholdings, a situation that put the bank in danger of collapse, Mr Grehan said.
Drumm and the bank’s former chairman, Seán Fitz Patrick, met Mr Quinn in September 2007 and tried to persuade him to reduce his position. The court heard that instead of doing this, Mr Quinn tried to ‘double down’ on his losses by buying more shares.
Counsel said that the Financial Regulator was also very worried about the Quinn strategy and how it might destabilise the bank, and potentially other Irish banks.
Mr Grehan said that from late 2007, Drumm ‘moved heaven and earth’ to try to resolve the problem ‘in conventional terms’, and it was only when all other options had fallen through that he devised the Maple Ten plan. This scheme allowed ten ‘high-net-worth’ individuals to purchase 1% each of the Quinn shares. This purchasing of the shares would be facilitated by short-term loans from the bank.
It was envisaged €60million in loans would be needed, but by the time the scheme was executed, the share price fell further, and the final cost was around €450million.
He ‘moved heaven and earth’