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Saturday 21 July 2018

Jailed Drumm to be sentenced for Maple 10 loans

David Drumm pleaded guilty last month to the 10 charges
David Drumm pleaded guilty last month to the 10 charges

Former Anglo Irish Bank chief executive David Drumm will be sentenced today for providing unlawful loans to a group of businessmen known as the Maple 10.

Judge Karen O'Connor will pronounce sentence at Dublin Circuit Criminal Court having yesterday heard a plea of mitigation from Drumm's defence.

Drumm (51), from Skerries, Co Dublin, is already serving a six-year sentence for false accounting and a €7.2bn conspiracy to defraud.

He pleaded guilty last month to 10 charges of giving unlawful financial assistance to the businessmen to buy shares in the bank during the 2008 financial crisis.

Secret

Judge O'Connor heard evidence that the loans were given to unwind a massive secret stake that Sean Quinn had built up in the bank using financial instruments known as contracts for difference (CFDs).

These allowed Mr Quinn to bet on the performance of the shares without actually owning them, but in reality he effectively had a 25pc stake in the bank.

Under examination from prosecution counsel Paul O'Higgins, Det Sgt Brian Mahon agreed that after Drumm learned of the scale of the CFD position, there was concern within Anglo that it would impact on the stability of the bank's share price.

Drumm made efforts to find buyers for the shares in the Middle East and the US.

However, when none could be found, a scheme was arranged where Anglo issued loans to Quinn family members to buy a 15pc shareholding and to 10 wealthy clients of the bank to buy the remaining 10pc.

Det Sgt Mahon said that although paperwork was handled by Anglo staff, the transactions were instigated by Drumm.

He described Drumm as being "at the helm" of what had happened.

A total of €451m in loans were issued to the so-called Maple 10 to buy the shares. There is no suggestion any of them did anything wrong.

After a previous trial over the loans, two other former Anglo executives were sentenced to 240 hours' community service.

The judge in that case found the financial regulator had "led them into error and illegality".

Defence counsel Brendan Grehan said the court did not have the option of sentencing Drumm to community service, but asked Judge O'Connor to take notice of the sentence in the previous case.

Mr Grehan also asked the judge to give Drumm "full allowance for his plea of guilt".

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