Anglo directors at DDDA meeting on €412m deal

SEÁN FITZPATRICK and Lar Bradshaw sat in on the board meeting of the Dublin Docklands Development Authority (DDDA) that approved its investment in the €412 million Irish Glass Bottle site deal in 2006, despite the involvement of Anglo Irish Bank.

Mr FitzPatrick was at the time chairman of the bank and a non-executive director of the DDDA, while Mr Bradshaw was chairman of the authority and a non-executive director of the bank, which financed the deal.

The conference-call meeting was held at 8am on October 24th, 2006. The only item on the agenda was the joint deal with developer Bernard McNamara.

Mr Bradshaw said at the outset he had been told by Mr McNamara the previous evening that he was “in discussions with the Bank of Ireland and Anglo Irish Bank in order to secure the acquisition funding”.

Mr Bradshaw advised the board of his non-executive role with Anglo, as did Mr FitzPatrick. They said they would not be involved in executive decisions in the bank.

Another director, Declan McCourt, said he was a non-executive director of Bank of Ireland and was not involved in any credit decisions.

“The board concluded that no material conflict of interest existed in respect of the participation by the directors in the discussion and decision on the proposed acquisition,” say the minutes of the board meeting.

The minutes have been sourced by Phil Hogan, Fine Gael’s spokesman on the environment, heritage and local government, using the Freedom of Information Act.

“Members were concerned that to some people there might be a perception of conflict, but following further discussion, it was agreed that such perceived conflict, if it was ever alleged, would have to be dealt with by declaring the facts of the situation,” said the minutes.

The then chief executive of the authority, Paul Maloney, confirmed that all of the negotiation had been “virtually completed” by the executive before the issue arose. He had only learned which banks were involved at the meeting with Mr McNamara he attended with Mr Bradshaw, he said.

The board was told the valuation of the site had been discussed with Mr McNamara, who had suggested he would fund a higher bid himself, while leaving the authority’s shareholding in the joint venture at 26 per cent.

Mr McNamara this week had a case entered in the Commercial Court where he is seeking to have the authority indemnify him against a potential claim from Anglo, as well as from investors organised by Davy Stockbrokers who put more than €60 million into the deal.

Mr McNamara’s potential exposure exceeds €140 million.

The investors have taken a case seeking the return of their investment, which carries an interest rate of 17 per cent.

The joint venture, Becbay, involving Mr McNamara, the DDDA, and property financier Derek Quinlan, bought the Ringsend site for €412 million. A recent survey for the authority has valued the site at €60 million.

When funding of the venture came up for discussion at a subsequent board meeting in November 2006, both Mr Bradshaw and Mr FitzPatrick left the meeting.

They did so again at a December 7th meeting.

Mr Bradshaw and Mr FitzPatrick resigned from Anglo in December 2008. It emerged that a joint loan they had was transferred to Irish Nationwide at year’s end, so it would not appear in the bank’s published accounts.