A lot of people I've been speaking to would love to know what Fitzpatrick was spending his 87 or is it 94 million on. It got me thinking that perhaps this type of pulling the wool over shareholders eyes must go on elsewhere in the the corporate world. Surely this is not the only company where directors have taken out huge loans and if Fitzpatrick figured that moving it once a year kept the auditors off his back and the shareholders from asking too many pesky questions then its not a far stretch to assume that other execs could be at the same thing.
Also it brings up the question of Golden handshakes and severance packages over the last number of years. Lets say you have a CEO or director who has resigned or been replaced and the company realises that the same CEO or Director has taken loans from the company, perhaps the CEO Director wouldn't be ever in a position to pay back , could it be possible that as part of a severance package the company decides to give options or shares as a golden handshake and then the loan is called in?
Hypothetical Example:
CEO steps down after 4 years at the helm , profits are down, board decide a shake up and the CEO gets his P45. CEO says ok but I've a company loan for €20million and now you are making me redundant, how will I pay it back, and worse how will shareholders react when they find out that you guys sanctioned a loan from company money and it mightn't get paid back?
Board says " Well Mr CEO, on top of your €2million cash compensation package we can offer you €20million in backdated share options or some other form of collateral (which you can use to pay back your loans).
I know this sounds fairly mad and wouldn't or couldn't happen in the real world? but so does a Financial Regulator knowing for most of the year about a $87 million loan that was being hidden from shareholders - now thats mad.
Shareholders should ask questions at AGMs directly to directors in relation to loans - " Did you at any stage of this year or previous years take a loan from this company?" If the answer is yes but it doesn't show on the books , then WTF, but if the answer is no and the financial regulator knew but sat on it then happy days because nothing untoward or illegal occured.
Legalised fraud is still fraud in my opinion