Anglo Irish Bank hidden loans controversy and the bank crisis

The Anglo Irish Bank hidden loans controversy was a major contributor to the bank crisis in Ireland.

In 2008, Anglo Irish Bank was nationalized by the Irish government after it was revealed that the bank had hidden billions of euros in loans to property developers.

The bank's collapse led to a massive bailout of €29.3 billion, which was the largest in Irish history.

This bailout was paid for by the Irish taxpayer, adding to the country's already significant debt burden.

The Anglo Irish Bank crisis was a major scandal that rocked the Irish banking system in 2008. Investors in the bank were left reeling after its top brass quit in a loans scandal.

The bank's chairman, Sean FitzPatrick, used the firm as an 87 million euro piggy bank, loaning himself a total of 87 million over eight years. He shifted the money to another bank to hide the payments.

The scandal came as the Irish Government continued its 10 billion recapitalisation of the country's banking system with Anglo seen as the most in need of fresh capital. The bank's shares fell more than 40% to a record low of 19 eurocents.

The Irish Government's 10 billion recapitalisation plan aimed to stabilise the country's banking system, but the Anglo Irish Bank crisis threatened to undermine the effort. The analyst speculated it could lead to nationalisation of the bank.

Four Anglo-Irish executives stepped down due to the scandal, including chairman Sean FitzPatrick and chief executive David Drumm. Drumm said it was "appropriate" for him to leave given FitzPatrick's resignation.

The scandal also claimed the scalp of Financial Regulator Patrick Neary, who was kept in the dark on the controversy for almost a year. Neary's failure to detect the hidden loans was criticized.

The bank's new chairman, Donal O'Connor, apologized for the scandal and promised to cooperate with external probes. O'Connor encouraged customers to continue depositing money into the bank.

Anglo Irish Bank's accounts for 2007 showed that FitzPatrick had loans worth 129 million euros, but only disclosed 7 million euros to shareholders. The bank is carrying out a governance review into the scandal.

The scandal has sparked six official inquiries, including one by the Financial Regulator and another by the Director of Corporate Enforcement. The Irish Stock Exchange is also investigating the matter.

The crisis has had a significant impact on the bank's shareholders, including billionaire entrepreneur Sean Quinn and property magnate Sean Dunne. The value of their shares has been severely affected by the scandal.

The crisis has also raised questions about the role of auditors in detecting the hidden loans. Ernst and Young, the bank's auditor, said it was unaware of the refinancing transactions undertaken by FitzPatrick until late 2008.

Sean FitzPatrick, the former CEO of Anglo Irish Bank, made massive undisclosed personal loans to himself and other directors totaling over €150 million from 2000-2008. This is a clear case of corporate governance failure.

The loans were used to buy shares, fund property deals, and invest in pensions and film projects. It's shocking to think that these loans were not closely monitored.

FitzPatrick and other directors were later charged with fraud for their role in Anglo Irish's downfall through unethical practices and intentional deception. This is a stark reminder of the importance of proper corporate governance.

The bank's non-executive director Lar Bradshaw quit along with FitzPatrick after the pair took out a joint loan. This highlights the lack of oversight and accountability within the bank's leadership.

Investors in Anglo Irish Bank were left reeling after the top brass quit in a loans scandal in which chairman Sean FitzPatrick used the firm as an 87 million (£81 million) piggy bank. This scandal led to the dramatic resignations of FitzPatrick and chief executive David Drumm.

The scandal came as the Irish Government continued its 10 billion recapitalisation of the country's banking system with Anglo seen as the most in need of fresh capital. This further emphasizes the severity of the situation.

FitzPatrick built Anglo from a tiny operation in the 1980s to a multi-billion euro lender and was chief executive for 18 years before becoming chairman in 2005. He admitted taking 87 million of loans, on normal commercial terms, from Anglo Irish between 1999 and 2007.

The accounts for 2007 show he had loans worth €129m but only disclosed €7m to shareholders at the time. This is a clear case of hiding the truth from investors.

The chairman of Anglo Irish, Donal O'Connor, apologized on behalf of the board and acknowledged that the directors' loans were not closely monitored. He also encouraged customers to continue to deposit money into the bank.

The bank is carrying out a governance review into the scandal alongside external probes by the Financial Regulator, the Irish Stock Exchange, and the Director of Corporate Enforcement. This is a positive step towards addressing the issues.

Auditors at Ernst and Young have been criticized for not spotting the money moves and hidden loans. However, they stated that they were unaware of the refinancing transactions undertaken by the former chairman until late 2008.

Sean FitzPatrick, the former chairman of Anglo Irish Bank, secretly borrowed €129m from the lender to buy shares, fund property deals, and invest in pensions and film projects. This was revealed at an emergency meeting in Dublin.

FitzPatrick had a €320,000 salary in 2006 and a €533,000 bonus, making him one of the highest-paid bank executives. He is also standing down as chairman of Smurfit Kappa and director of Aer Lingus, Experian, Greencore, and Gartmore Irish Growth Fund.

The loans scandal has seen four Anglo-Irish executives step down, including FitzPatrick and chief executive David Drumm. Drumm said it was "appropriate" for him to leave given FitzPatrick's resignation and the continued support of the Irish Government.

FitzPatrick admitted taking €87m of loans from Anglo Irish between 1999 and 2007, but only disclosed €7m to shareholders at the time. He transferred the loans to another bank before each year end, which he claims was not a breach of banking or legal regulations.

The bank's non-executive director Lar Bradshaw quit along with FitzPatrick after the pair took out a joint loan. FitzPatrick insisted Bradshaw knew nothing of the transfer of the loan.

The loans scandal has sparked outrage among investors, with 900 demanding the sacking of the board at an emergency meeting in Dublin. The Government has since taken full state control of the bank, and six official inquiries have been ordered into the loans fiasco.