The story goes that Sean Quinn borrowed €100 to set up a gravel business in the 1979s; he then went on to become the poster boy for capitalism in Ireland and the Celtic Tiger.
He amassed a property portfolio, new businesses and a fortune of nearly €5bn at his most wealthy.
The business behemoth was a strong believer in Anglo Irish Bank and believed its shares were undervalued. Anglo was heralded as Best Bank in the World 2006 by a consultant in financial services strategy.
When Sean Quinn invested in Anglo he was sure it was a solid investment and the value of the shares would increase, so it’s not a surprise he was “furious” after taking “a right beating” when the stock crashed.
The crash
Ireland’s former richest man, by his own figures lost €3.2bn in two years through investments in Anglo Irish Bank. Mr Quinn had started to build up shares in the bank and indirectly owned a stake in Anglo of nearly 30 per cent in the form of investments called contract for difference (CFD) and shares.
Now here’s the tricky part, these CFD allow a person to make a wager on the way a share price will change over time. Buyers of CFDs have no obligation to disclose their holding, are not liable to stamp duty and the gains can be substantially more lucrative than buying shares.
The main drawback of these investments is that the gambler can lose many times their investment; if they had purchased a share they could only ever lose 100 per cent of their investment.
When the share price of Anglo tanked in 2008 following the economic crisis Mr Quinn was in a precarious position.
Bank chiefs at Anglo were surprised at the large stake Mr Quinn had built up in the bank.
The trial
Yesterday was day 13 of the long running trial of three former Anglo executives Sean FitzPatrick, Patrick Whelan and William McAteer.
Each has pleaded not guilty to 16 charges of unlawfully providing financial assistance to individuals for the purpose of buying shares in Anglo Irish Bank in 2008.
Mr Whelan has also been charged with being privy to the fraudulent alteration of a loan facility letter, which he also denies.
It is alleged that the three had a hand in providing a group of developers, referred to as the ‘Maple 10’, and members of Sean Quinn's family hundreds of millions of Euro in loans to buy shares in Anglo Irish Bank to stabilise its price and reduce Mr Quinn’s stake.
The Maple 10 deal allegedly involved each of the businessmen borrowing €45 million from Anglo to then subsequently purchase a 1 per cent share in the bank.
It is illegal for a company to use its own money to support its share price, save in certain limited circumstances. The alleged attempt to avert crisis was unsuccessful and the price of the bank's shares collapsed.
Listen to a recap on week three of the Anglo trial below.
