|Seán FitzPatrick, a chartered accountant, joined Anglo Irish Bank in 1980 and served as Chief Executive Officer from 1986 to January 2005. He resigned as Chairman of the bank on Dec 18, 2008. FitzPatrick has also resigned from the boards of Smurfit Kappa, Aer Lingus, food group Greencore and investor, Gartmore Irish Growth Fund.
Seán FitzPatrick who transformed Anglo Irish Bank into Europe's most
successful bank in results terms, as it recklessly lent with the tacit support of the
Irish Government during the property bubble, was today declared a bankrupt by
the High Court in Dublin.
FitzPatrick’s barrister, Mark Sanfey SC, told the court that a
scheme drawn up to settle with his creditors had not been
supported by the management at Anglo Irish Bank. “In the
circumstances, Mr Fitzpatrick considered he should bow to the
inevitable and not force a vote that he could not possibly win,”
FitzPatrick has debts of almost €150 million, including €110 million owing to
Anglo Irish Bank, and a deficit of €80 million. His shareholdings in the bank
were wiped out when it was nationalised in January 2009. All assets owned by FitzPatrick,
including a stake in a Nigerian oil well, have come
under the control of the official assignee, a court officer
who monitors the financial affairs of bankrupt individuals. Any
salary, income or pension will also go to the official assignee.
According to current Irish law, individuals can only be discharged as a bankrupt
once their debts and the costs of their bankruptcy is covered,
or after 12 years have elapsed.
Seán FitzPatrick resigned as
chairman of Anglo Irish Bank, following an investigation of directors' loans at
the bank in early 2008. FitzPatrick had concealed director loans to himself of
up to €122
million each year end over an eight-year period, through an arrangement with Irish Nationwide Building
Society. It is unclear if auditors Ernst & Young had ever spotted the
transactions. Tens months after the discovery by his staff, the chief executive of the Financial Regulator
was told about the loans, FitzPatrick and the bank's
chief executive David Drumm resigned.
In June 2007, Fitzpatrick said in a speech
at a business lunch, that Ireland’s then economic success was almost entirely
due to the country’s entrepreneurs and had little to do with politicians.
"You can’t keep good people down forever", he said. "Look around the
world and you’ll find Irish emigrant stock at the very top of social, civic,
commercial and political life. What happened over the past ten years or so was
that this potential was unleashed at home here in Ireland rather than overseas.
The Irish economy began to benefit from the innate business sense and
entrepreneurship of its people.
"All the politicians did was stand aside and let it
happen", Fitzpatrick added. "After years of meddling they finally stood
aside and allowed the people to get on with it. Taxes were cut and the economy
was allowed to open up and the effect was like putting a flower out in the sun.
The economy blossomed."
Anglo Irish Bank's Annual Report 2006
However, he warned that politicians and regulation were about to stifle growth once more. "Having developed this marvellous
entrepreneurial culture which is delivering so many benefits in terms of
employment and wealth to the country we must ask ourselves if there is now a
danger that our regulatory environment has gone too far?", he asked. "Are
we starting to shackle instead of encourage the entrepreneurs who in turn
generate more wealth not just for themselves, but for the country as a whole."
Stating that we may have reached a situation where the
weight of compliance with the various financial reporting standards and other
corporate regulations had become so heavy that entrepreneurs were no longer
willing to bear it, Fitzpatrick said: "Among the more insidious and I believe
iniquitous aspects of the current regulatory environment is its apparent
presumption of guilt on the part of entrepreneurs and businesspeople generally.
The whole structure seems to be geared towards an annual proof of innocence
statement. This is corporate McCarthyism and we shouldn’t tolerate it."
He said that we should have been proud of our successful
business people and not pillory them. "It is time to shout stop. The tide of
regulation has gone far enough. We should be proud of our success, not
suspicious of it. Our wealth creators should be rewarded and admired not
subjected to levels of scrutiny which convicted criminals would rightly find
The biggest joke of all was the lax regulatory system,
which had brought the Irish banking system to its knees.
"We operate to the highest ethical and
governance standards as we aspire to be a model corporate citizen. For
this reason we invest heavily in the development and training of our
staff, as well as maintaining the highest levels of integrity in our
relationships with our stakeholders." - - Anglo Irish Bank Annual Report 2007
Anglo Irish Bank was
founded in 1964 as Dublin City Bank and became a publicly quoted company
in 1971. It had 1,900 employees in December 2007.
In 1986 Seán
FitzPatrick, a chartered accountant,
became Chief Executive; Dublin City Bank merged with Anglo Irish Bank
Ltd and assumed the latter's name.
December 2008/January 2009
- - Chairman Seán FitzPatrick, Chief Executive David Drumm and a number
of board members resigned after it emerged that FitzPatrick had taken
measures over an eight-year period, to conceal details from
shareholders, of an €87 million loan he took from the bank.
In early October 2008, days after a State guarantee saved
his bank from collapse, FitzPatrick called on the Government in another speech, to cut
corporation tax and tackle the sacred cows of universal child benefit, state
pensions and medical cards for the over-70s.
In March 2010, the
former banker was arrested and detectives searched his house in Greystones,
County Wicklow, as part of an investigation into possible breaches of company
law by the Office of Director of Corporate Enforcement.
|Anglo Irish Bank closed at 22 euro cent on
the Irish Stock Exchange, on its last day of trading before becoming a
On February 21, 2007, the ISEQ index rose
to an-all time high of 10,041 and the Financial sub-index rose to
18,098. Bank of Ireland closed at €18.65; Anglo Irish closed at €16.64
and AIB closed unchanged at €23.95.
A year later, on February 21, 2008, AIB
closed at €13.80, Anglo Irish Bank finished at €8.84, while Irish Life &
Permanent closed at €10.20 and Bank of Ireland traded at €9.50.
Seven issues dominate the Irish market
and in recent years, overseas residents, dominated by institutions, have
owned more than 60% of Irish bank shares. Ireland's biggest company CRH,
accounts for about a third of Irish market capitalisation and in
December 2007, foreign holders held 84% of the issued shares.