# What was wrong with fitzpatricks loans?



## z106 (17 Jan 2009)

Excuse my ignorance here but can someone please explain what the issue was with fitzpatrick taking loans from anglo ?

He took out money - apparently underwritten in line with normal lending practices at anglo.

This was not illegal it seems.

He then felt a need to hide these loans?
WHy did he hide the loans ?
Had ne not hidden the loans then would it all have been ok ?
(Presumably not - but why not?)

How come he is not viewed as just another customer who also happens to be a director?

I don't understand.
Can someone please explain what the big deal is.


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## webtax (17 Jan 2009)

qwertyuiop said:


> He took out money - apparently underwritten in line with normal lending practices at anglo.



This is what was wrong. There was no way they were underwritten in line with normal lending practices. His income was €2/3 million pa and he borrowed €100m (with what security?), which he was free to invest in any hare-bained idea he came up with.

If there was nothing wrong with it, he would have been able to borrow the money from another bank.

One thing we haven't head much about yet is Irish Nationwides role. Who was responsible for aiding & abbetting Fitzpatrick in hiding the loans from the regulator & shareholders and why are they still in their jobs? Surely there would be enough members wanting this answered to call an EGM?


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## z106 (17 Jan 2009)

Ok - i get it.
So the main issue was that he used anglo funds (i.e. other peoples money) as his own piggy bank so to speak ?

Or put another way he temporarily borrowed money from other people without their knowledge/consent presumably with the genuine intention of paying it back but has instead found himself in the situation where it is very unlikely he will be able to pay it back due to the tumbling/extinction of anglo shares?

Fair enough. That was bad form alright i suppose.

This raised more questiosn though.

But what happened the returns from the investmenst he made?
Can he not just sell those to recoup the funds he put in?

Also - has he come out yet and said that he can/cannot repay the loans?
Presumably that was asked at teh EGM yesterday no?

Good question on who helped him irish nationwide by the way.
Funny how no-one seems to have raised that question yet alright.


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## Brendan Burgess (17 Jan 2009)

Folks

Try to make your posts without defaming people. I have had to delete many posts on this topic. We don't want to ban the discussion, but please be very careful.

Brendan


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## Carramore (17 Jan 2009)

qwerty said "He took out money - apparently underwritten in line with normal lending practices at anglo."  How could it be underwritten in line with normal practices?  He was chairman of the credit committee - for much of the time at least - and all the other members of the committee reported to him.  How could the loans be underwritten in line with normal lending practices in those circumstances?  In some ways, it reflects even worse on the other directors and the auditors if the loans went through the pretence of being underwritten in line with normal practices.  Any Board with a bit of cop on would insist that special procedures were introduced for the chairman.  There was no indication that this was the case.  Furthermore, everything would then be above board and visible to the auditors, so how could the loans suddenly disappear at each balance sheet date, to reappear again shortly afterwards?  When they reappeared, did they go through "normal lending practices" again?  The more one learns about these arrangements, the more questions they raise.


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## z106 (17 Jan 2009)

I reaise i have asked this question in an earlier post so apologies for repeating myself but i fear my question may have gotten lost in all teh other content.

Anyway - Has he made a statement yet as to whether he can/cannot repay the loan?


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## z109 (17 Jan 2009)

qwertyuiop said:


> But what happened the returns from the investmenst he made?
> Can he not just sell those to recoup the funds he put in?


Like the Anglo shares he is reported to have bought with them?
Like the Nigerian oil-well he is reported to have a share in (oil has collapsed in price recently...)?
Like the Las Vegas bars he is reported to have bought into? (You think the property market here is bad, you wanna see Vegas).

My guess is that what has been bought under mark-to-market accounting in no way covers the amount that has been borrowed. But it is just a guess.

Given that this has been going on for eight years, my guess is that the original loans were for dot-com shares. But it is just a guess.

Typically in these situations, once the loans had been hidden once, they had to be hidden every year. As each new 'next thing' came up, more loans are taken out in the hope of making it big this time. Sometimes they come off, sometimes they don't.


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## mathepac (18 Jan 2009)

qwertyuiop said:


> ... Has he made a statement yet as to whether he can/cannot repay the loan?


Not that I have seen.

Hopefully some one of the inquiries into Anglo's porfolios of assets and liabilities will report on the realisable value of assets used to secure all loans as well as the abilities of borrowers to repay.


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## Carramore (18 Jan 2009)

Hi qwerty.   I think we're all agreed that the value of the assets acquired will not be sufficient to repay the loans.  This is where his position of power comes into play. Anglo were notorious for demanding personal guarantees from borrowers.  Do you think that the other members of the credit committee would have demanded PGs from their chairman for all his speculative borrowing?  Of course not.  Therefore, we have the prospect of Fitzpatrick swanning away with his millions while the rest of us pick up the tab.


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## Complainer (18 Jan 2009)

qwertyuiop said:


> Excuse my ignorance here but can someone please explain what the issue was with fitzpatrick taking loans from anglo ?
> 
> He took out money - apparently underwritten in line with normal lending practices at anglo.
> 
> This was not illegal it seems.


Just like there was nothing illegal with Rody Molloy and his buddies flying first-class at FAS. And there was nothing illegal with Beverly taking the €41k independents allowance.

It doesn't need to be illegal to be wrong. If there was nothing wrong, why did he hide the loans?


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## camlin90 (18 Jan 2009)

We need to begin discussing how Anglo's loans - OUR loans - are going to be treated.

Suppose there's a director, let's call him Mr F, who got a loan from a taxpayer, let's call him Muggins, to buy diamond mines and oil wells.
Is Mr F servicing the loan as outlined in the contract?
Is there any doubt he will fulfill his obligations?
If not, the loan needs to be called in. In fact, Muggins could do with some liquidity right now, so if there's a clause allowing the loan to be called in early, exercise it.

Liquidate the assets against which Mr F's loan is secured. When they are exhausted, move on to personal assets - cars and houses.

As a nipper I looked out the window of my house and saw the house across the road being repossessed (UK - early 90s). The bailiffs took everything - down to dustpan and brush. Ordinary people struggling to work and pay a mortgage. Not bank directors.
Such a gesture on live television from Greystones could go some way to sate the anger of the people and demonstrate that things are changing.

I have given loans to property developers and speculators. I want back every cent that can possibly be recouped. I want every possible measure taken to that end - including, where necessary, personal financial ruin of the individuals involved. We have a social welfare system to deal with those people. A generous one, too.
The future of the country and our children is more important than preserving the golfing memberships of those who inflated the bubble. 

Government, start taking action. NOW.


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