Friday, December 19, 2008

The lying liars are lying again

The latest of the banking 'indiscretions' exemplifies the complete lack of progress that Ireland thinks it achieved towards creating a meritocracy.

Last night the Chairman of Anglo-Irish bank, Seán Fitzpatrick, resigned. His resignation prompted by the reality that a story was about to leak about an eight year long sleight of hand he had been playing with a huge loan he took out from the bank during his tenure as CEO and then Chairman.

Now lets go back a little - to September 2008 - at the end of that month the stock price of Anglo Irish was hurtling down. The bank bailout/guarantee was triggered by the fear that Anglo Irish wouldn't last a few more hours trading. The Bank share price is now some 98% less than its peak 16 months ago and its worth only about €200 million. This figure puts into scale the size of Fitzpatrick's €87 million loan.

Whats so revealing about this story is the scale and extent of the deception. To ensure that the loan did not make it into the Anglo Irish's annual accounts, Fitzpatrick had to transfer the loan into Irish Nationwide. So the following people must have known about this huge loan;

Board of Anglo Irish Bank.
Loan Committee of Anglo Irish Bank
Audit Committee of Anglo Irish Bank
Anglo Irish Banks Auditors
Ernest and Young, the Banks Auditors
Irish Nationwide CEO
Irish Nationwide Board
and so on...

The point is that possibly hundreds of people, mostly based in Dublin, were complicit or at the least knew that the head of one of big four banks in Ireland was involved in deceiving the shareholders.

And all stayed schtumm.

I believe that Ireland operates, by and large, through a series of social platforms, the platform you occupy determined by; where you grew up, who your father is and what school you went to. Our society appears to me to be still largely tribal based. Irrespective of the rights and wrong of the tribes behaviour the rules dictate that your loyalty, co-operation and complicity is the only qualification demanded. By playing ball, rewards will be conferred on you.

Our political system is littered with examples of this.

Anglo Irish has only days left to live - its seems quite absurd that the guarantee introduced in September, primarily due to the performance of Anglo Irish, is likely to be called upon because of the indecent behaviour of those on the very top of the Irish financial community.

It appears nothing much has really changed.

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