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Was it legal for AngloIrish Bank to lend money to people for buying its own shares?


patslatt

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Apr 11, 2007
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Today's London Times story "Barclay's chief gives up bonus..." (subscription link) says that UK "companies are not allowed to make private loans to investors buying shares in them." Presumably,this is an old law,one obviously needed to prevent the risk that financial institutions under financial pressure might use their financial resources to manipulate their own share prices. Given the Irish habit of copying important UK legislation,did Ireland pass any similar legislation? If not,why was the government so negligent? Was it legal for AngloIrish Bank to lend money to people for buying its own shares?
 

wombat

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I think this should be closed as there may be a law case.
 

Vega1447

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Ehh, no.

It was illegal. That's like legal but with "IL" in front. So no difference really.

Don't hold your breath waiting for the prosecutions to come to Court.

Don't even go for a very long walk and expect any change on return...
 

cobhguy

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From my understanding of company law a company can not normaly give assistance to purchese its own shares ie supervalue could not lend money to someone to buy shares but if its main business is leanding money ie aib then it is ok, but only if you are asking for the money and not the bank offering it to you.

So me asking AIB for 1,000,000 to buy shares is good.

AIB ringing me up and offering me 1,000,000 to buy shares illegal.

So i
 

Boy M5

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Share support operation is illegal. Just look at the Guinness case
 

TiredOfBeingTired

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Illegal
But has anyone ever gone to jail for it?
Doubt it!

Law prevents market manipulation by banning firms from buying own shares - National News - Independent.ie

"ANGLO'S former head of risk and the nationalised bank's former managing director in Ireland will be tried before a jury under section 60 of the Companies Act 1963.
Although largely untested in the criminal courts, Section 60 is one of the key rules in Irish company law designed to prevent asset stripping, market manipulation and reduction in the share capital of a company.
It does so by banning any company from buying its own shares.
Section 60 bans a company from giving direct or indirect financial assistance -- including loans or guarantees -- to buy its own shares unless it goes through a triple-lock procedure to ensure that the share purchase is above board."
 

hiding behind a poster

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Today's London Times story "Barclay's chief gives up bonus..." (subscription link) says that UK "companies are not allowed to make private loans to investors buying shares in them." Presumably,this is an old law,one obviously needed to prevent the risk that financial institutions under financial pressure might use their financial resources to manipulate their own share prices. Given the Irish habit of copying important UK legislation,did Ireland pass any similar legislation? If not,why was the government so negligent? Was it legal for AngloIrish Bank to lend money to people for buying its own shares?
I think you'll find this forms part of the ODCE investigation into Anglo.
 

Grey Area

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As the case(s) are ongoing I agree with wombat that this thread should close as there are huge potential legal difficulties abound about discussing same.
 

Vega1447

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As the case(s) are ongoing I agree with wombat that this thread should close as there are huge potential legal difficulties abound about discussing same.
A very measured judgement.
huge potential legal difficulties abound
What a great steaming pile of s4ite..

The only reason not to discuss a case is if it is before the courts.

None of these cases will *ever* see daylight. So discuss away.
 

Grey Area

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Researchwill

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A very measured judgement.

What a great steaming pile of s4ite..

The only reason not to discuss a case is if it is before the courts.

None of these cases will *ever* see daylight. So discuss away.
You may have missed this,

Former Anglo Irish chief Seán FitzPatrick charged - The Irish Times - Tue, Jul 24, 2012

"Mr FitzPatrick appeared before Dublin District Court this morning where he faced 16 charges of providing unlawful financial assistance in July 2008."

It goes on "The charges relate to loans provided by Anglo to a group of investors – 10 customers known as the “Maple 10” and to the five children of bankrupt businessman Seán Quinn and his wife Patricia to buy shares in the bank. Anglo made the loans to prop up its share price and, in turn, public confidence in the bank."

It takes between 9 and twelve months to a jury trial, so my reading this matter is very much before the courts.
 

Frank Galton

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Credit Suisse --legally -- gave Qatar Holding a loan to buy shares in the bank:

The fully committed capital increase comprises the immediate sale of approximately 93 million treasury shares totaling approximately CHF 3.2 billion; approximately 50 million shares issued through mandatory convertible bonds totaling CHF 1.7 billion and net CHF 5.5 billion of hybrid tier 1 capital. All of these tranches will be settled by October 22, 2008. Together, these measures will increase tier 1 capital by the net proceeds of approximately CHF 10 billion and the tier 1 ratio as of September 30, 2008, on a pro-forma basis, to approximately 13.7%. As of the end of the third quarter, the tier 1 ratio was approximately 10.4%. With this capital increase, Credit Suisse now already exceeds the SFBC's 2013 capital targets and minimum leverage requirements. Credit Suisse is providing financing for an interim period for a portion of these investments.
https://www.credit-suisse.com/news/en/media_release.jsp?ns=40924

The critical thing is that Credit Suisse (a) got regulator permission to do it and (b) disclosed it.

The Barclays case is trickier.

C Suisse gave Qatar loan during crisis - FT.com

But the point is that the loan per se is not illegal, it all depends on disclosure and why it was done.
 
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Researchwill

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Aye right..

Garda Fraud Squad will "probe" all right.. Seanie has not been charged with anything and will never be (not till the statute of limitations applies).
Did you actually read the article,

"Mr FitzPatrick appeared before Dublin District Court this morning where he faced 16 charges of providing unlawful financial assistance in July 2008."

That the first process the they get sent forward for trial which happened in October Ex-Anglo boss Sean FitzPatrick sent for trial - Courts, National News - Independent.ie

In ireland there is not statute of limitations on serious crimes.
 

Radix

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Today's London Times story "Barclay's chief gives up bonus..." (subscription link) says that UK "companies are not allowed to make private loans to investors buying shares in them." Presumably,this is an old law,one obviously needed to prevent the risk that financial institutions under financial pressure might use their financial resources to manipulate their own share prices. Given the Irish habit of copying important UK legislation,did Ireland pass any similar legislation? If not,why was the government so negligent? Was it legal for AngloIrish Bank to lend money to people for buying its own shares?

I suspect that the promulgation of Irish Ponzi schemes were fine, as long as the participants wore green jerseys, protected by establishment trough swillers of all parties come hell or high water, even to passing the cost of same schemes on to the plebian electorate as usual!
 

Vega1447

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Did you actually read the article,

"Mr FitzPatrick appeared before Dublin District Court this morning where he faced 16 charges of providing unlawful financial assistance in July 2008."

That the first process the they get sent forward for trial which happened in October Ex-Anglo boss Sean FitzPatrick sent for trial - Courts, National News - Independent.ie

In ireland there is not statute of limitations on serious crimes.
If S Fitz is tried, convicted, sentenced and serves more than a month in jail I will eat my hat....

Dammit, I will eat S Fitzpatrick's hat - with curry sauce...
 
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kkkkkkkkkk

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so where does that position people like sean quinn
if he was given money to buy shares in a bankrupt bank
 
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