FitzPatrick: arrested

ANGLO Irish Bank fears lifting privilege over documents seized by the Office of the Director of Corporate Enforcement (ODCE) as part of the investigation into the bank's dramatic collapse could be used against it in future legal actions.

The bank is still consulting with its lawyers ahead of a High Court hearing this Thursday on whether to continue to claim legal privilege over the documents. High Court Judge Peter Kelly asked the bank at an earlier hearing to consider at the highest levels in the organisation whether the state-owned bank should claim privilege on information being sought by another arm of the state.

It is understood that Anglo Irish has been keen to co-operate with the inquiry by the Director of Corporate Enforcement, Paul Appleby, and the Garda Bureau of Fraud Investigation, but is concerned that, by lifting legal privilege it and the state could be exposed to future claims for compensation.

The final decision on whether Anglo agrees not to assert privilege, though, is likely to rest with finance minister Brian Lenihan. He has sought the advice of Attorney General Paul Gallagher before making a decision on whether to direct the bank not to assert privilege. As the ultimate shareholder in Anglo Irish Bank, Lenihan could overrule any decision by its management.

Gardaí and staff from Appleby's office raided Anglo's head office in Dublin in February last year and seized a huge volume of information. Senior counsel for Appleby told the High Court that it faces huge difficulties in separating electronic documents relevant to its probe from those claimed by the bank to be privileged.

Appleby's investigation is focusing on the non-disclosure of former chairman Sean FitzPatrick's loans over an eight-year period, the placing of 10% of the bank's shares with its favoured clients, and the back-to-back deposit transactions with Irish Life & Permanent.

At the launch of his annual report last month, Appleby said that a third of his resources were being devoted to the Anglo investigation and that millions of documents were being scrutinised. He wants to wrap up the inquiry by the end of the year. It has so far cost his office in excess of €1m.

FitzPatrick and former Anglo chief financial officer Willie McAteer were arrested and quizzed by gardaí earlier this year.