March 2009: Paul Appleby, director of corporate enforcement, ODCE

The ODCE is at the forefront of the State’s attempt to clean-up Irish banking and restore our reputation around the world.

Because

He is at the forefront of the State’s attempt to get to the bottom of the murky world of the goings-on in recently nationalised Anglo Irish Bank and any other issues that happen to surface in Irish banking.

Crucial investigation

Given the damage the whole affair has already done to the reputation of this country around the world, it is absolutely crucial that his investigation succeeds. It must lift the obfuscation and point a finger at the culprits, clearing the way for their proper and just punishment.

Sullied brand

If this does not happen, the brand name of corporate Ireland cannot be rescued and we will continue to be dismissed as the wild west of international finance. Perhaps just as significantly, it will be all the more difficult for the Government to convince the citizens of this country that the tough medicine that is on the way must be swallowed and then some.

The Office of the Director of Corporate Enforcement (ODCE) is carrying out this crucial job to the best of its ability, given the resources at its disposal and the huge culture shift needed in Ireland’s attitude to
such matters.

Indeed, the fact that his office has not received greater resources in recent years only helped to maintain an environment where “soft-touch” regulation veered deep into blind-eye territory.

Iconic raid

The ODCE has been investigating Anglo Irish since the issues surrounding former chairman Sean FitzPatrick’s loans transfers emerged in late December. In early February, Appleby wrote privately to an Oireachtas committee explaining that before he could proceed with a formal investigation, under company law he must form an opinion that “circumstances suggesting prejudice, misconduct and/or illegality are present with respect to the company’s affairs”. “I have formed that opinion in the Anglo case,” he said. Only in hindsight will it be possible to understand just why Appleby waited so long to let the forensic IT officers of the fraud squad loose on Anglo’s headquarters.

Some believe that the initial raid was very much designed for show but only time will tell.

Triple whammy

Appleby’s office is concentrating on a number of distinct issues at Anglo Irish Bank. The issue that awoke the public to the fact that all was not right at the State’s third-biggest back was the revelation of Sean FitzPatrick’s curious loan arrangements that saw him conceal substantial borrowings from his own bank by transferring them in and out of Irish Nationwide.

Another even more serious issue at the bank was the attempt to make its books look better through the movement of €7.45bn in deposits between Anglo Irish and Irish & Life Permanent. The third major issue is the infamous ‘golden circle’ that received €451m in loans from Anglo Irish in order for them to purchase a 10% stake in the bank in a bid to support its share price.

Sorry chapter

If Taoiseach Brian Cowen is really determined to “bring an end to a sorry chapter in Irish life”, as he told the recent Fianna Fáil Ard Fhéis, he will throw the full weight of the State’s resources behind what Paul Appleby is trying to achieve.

Highlights

•  ODCE (Office of the Director of Corporate Enforcement) is established
• Investigation involving NIB and DCC
• Recent Anglo Irish raid carried out by about 22 gardaí and ODCE staff.