Chairman of Anglo Irish Bank Sean Fitzpatrick has stepped down tonight in a controversy surrounding directors' loans.
In a statement Mr Fitzpatrick he said he had made his decision “in the best interests of the bank and all its stakeholders”. He said his decision related to loans he had with the bank totalling €87 million “which will be included in the annual report for 2008 in the note relating to Directors’ Loans.”
“This balance is substantially higher than in the 2007 report because in prior years I had temporarily transferred my loans to another bank before each year end. I had done this on my own initiative over an eight year period,” the statement said.
He said the transfer of the loans between banks did not breach banking or legal regulations. “However it is clear to me, on reflection, that it was inappropriate and unacceptable from a transparency point of view,” he added.
He said he was “fully responsible for my own decisions and actions” and said he regretted he had “adopted this approach”.
The Board of Directors of Anglo said in a statement it accepted Mr Fitzpatrick’s resignation with regret.
"Mr FitzPatrick's decision to resign is based on the fact that, over a period of eight years to 2007 he temporarily transferred loans with Anglo Irish Bank to another bank prior to the Group's year end. This transfer of loans did not breach banking or legal regulations. It was, however, inappropriate from a transparency point of view," the statement said.
Lar Bradshaw, a non-executive Director with Anglo, also tendered his resignation. His decision was based on the fact that a loan, which he held jointly with Mr Fitzpatrick, was temporarily transferred to another bank prior to year end, the Anglo statement added.
Donal O’Connor will replace Mr Fitzpatrick as chairman. Minister for Finance Brian Lenihan said in a statement that Mr O’Connor's appointment was made following consultation with him.
Mr Lenihan said Mr Fitzpatrick's resignation would not interrupt the "substantial progress" which has been made with Anglo Irish Bank in relation to the recapitalisation programme announced on Sunday. Mr Lenihan reiterated his commitment to underwrite the capital needs of Anglo Irish Bank and to ensure its "long term strength and viability as a bank of systemic importance in Ireland."
He expressed his disappointment at the circumstances surrounding the resignation of Mr FitzPatrick but said he believes "strong corporate governance must be upheld by all financial institutions in the Irish financial system."
