The trial of three former Anglo Irish Bank executives has been hearing about an angry conference call between businessman Sean Quinn and former Anglo CEO David Drumm in July 2008.
Liam McCaffrey, the former CEO of the Quinn Group, has given evidence that his boss was reluctant to give in to pressure from Anglo to dispose of his large stake in the bank.
The jury has heard Sean Quinn admired Anglo Irish Bank and secretly started building up a stake in the bank in 2006 through Contracts for Differences (CFDs).
By September 2007 he had a 24% interest in the bank - a significant holding that former Quinn Group CEO Liam McCaffrey said concerned and surprised Anglo Chairman Sean FitzPatrick.
Mr. McCaffrey said at a meeting in Buswells on Easter Monday in 2008, Sean Quinn initially refused to dilute his stake believing that Anglo's tumbling share price would recover.
But he had to borrow hundreds of millions from Anglo to meet his losses. He was eventually convinced to dilute his CFD holdings but there were no buyers.
Mr. McCaffrey described an angry conference call on July 14th, where either Anglo CEO David Drumm walked out or Sean Quinn hung up.
Former Anglo executives Sean FitzPatrick, Pat Whelan and Willie McAteer deny providing unlawful financial assistance to the Maple 10 and Sean Quinn's family to purchase bank shares.
The first few witnesses gave evidence to a packed court room at the trial of three former Anglo Irish Bank executives.
'Dubious honour' of being first witness
Pat Whelan (51), the former head of lending in Ireland at Anglo Irish Bank along with his former colleagues Sean FitzPatrick (65), the bank's chairman, and Willie McAteer (63), Anglo’s former finance director, deny providing unlawful financial assistance to the Maple ten and members of Sean Quinn’s family to purchase shares in the bank in July 2008.
The prosecution claims the loans were issued to give the appearance of stability in relation to the share price.
Una ni Raieartaigh SC for the prosecution, told Claire Pyke from the Companies Office she had the 'dubious honour' of being the first witness in the trial.
Since then the jury has been getting a crash course in the financial markets, specifically derivatives known as Contract for Differences.
UCC economics lecturer Seamus Coffey has likened CFDs to putting a bet on a racehorse rather than having a stake in the horse itself.
"The key word in CFD is the final word - difference. Using the horse bet analogy, if the horse won by a certain distance you would gain more" he has said.
If the share price rises there are substantial gains to be made but equally losses, known as margin calls, can be heavy.
Downward share price: 2007-2008
Earlier Pat Whelan's barrister Brendan Grehan quoted American business magnate Warren Buffett who described CFDs as 'weapons of mass destruction'.
Mr. Coffey specialises in macroeconomics and banking. He has been called by the prosecution in the context of evidence that Cavan businessman Sean Quinn invested heavily in Anglo Irish Bank using CFDs.
The jury has heard there will be evidence this exposure was a matter of concern to the board of Anglo and that as the bank stock tumbled in 2008, money was lent to Mr. Quinn to meet his CFD margin calls.
Barrister Paul O'Higgins SC previously said the businessman's borrowings topped €2 billion.
Earlier today the jury was shown graphs charting the steady decline in Anglo's fortunes - from its peak share price of €17.53 in June 2007, to just over €4 in July 2008.
Former Anglo company secretary Natasha Mercer has also given evidence that the board of directors would normally hold eight to ten scheduled meetings a year. But in 2008, the board met 33 times.
