Developer Bailout by Lease and Rental -Tom Browne, Anglo

[C. Flower]

http://www.galwaynews.ie/15800-call-probe-%E2%82%AC2m-rent-payment-ex-bankers

There seem to be a few complaints around the place that there are indirect developer bailouts going on in both housing and commercial property markets with Government overpaying for rents and leases.

This is one case attracting attention - I've opened this thread to keep track of the issue - it it a real one, or just people "digging the dirt" over legitimate deals ?


A Galway TD has called for an inquiry into the relationship between a number of government departments and a former director of Anglo Irish Bank from whom they are leasing offices in Galway for more than €2m a year.

Fine Gael Deputy Ulick Burke said that dealings between the Department of Agriculture, the Revenue Commissioners and a property company owned by two bankers “stinks to high heaven” and demanded that questions are answered.

Both government departments have relocated their Galway offices at considerable expense in recent years to become tenants of former Anglo director Tom Browne and senior manager at AIB John Hughes.

Mr Browne, the former head of Anglo’s Irish lending division, is scheduled to appear before the Commercial Court next Monday as the bank pursues him for loans of around €45m secured on shares and various property investments.

The Department of Agriculture vacated its offices at the Hynes Building and moved just a few hundred yards to the Dockgate Building on Merchants Road, which is owned by Mr Browne and Mr Hughes, at a cost of more than €3m in 2003.

The two bankers, trading as the Ballybrit Partnership, are paid an annual rent of €922,250 for the offices in the Dockgate Building, which is one of the most expensive leases held by a government department outside of Dublin.

A rent increase of 24% was sanctioned earlier this year and backdated to January 2008 when rental yields and property prices around the country were in decline.

It is understood that the department, which employs 52 staff in its Galway offices, is paying €53,646 a year for the use of 65 car parking spaces and around €74,000 in respect of service charges.

“The rent being paid at Dockgate is higher than that of premises on O’Connell Street in Dublin, while there are acres of space available on the Mellows campus. Someone has stopped the move to the benefit of these bankers and it stinks,” said Deputy Burke.

The Offices of the Revenue Commissioners in Galway relocated last April from Hibernian House in Eyre Square to the €18m Fairgreen Building, which is also co-owned by Mr Browne and Mr Hughes.

The Revenue Commissioners are paying an annual rent of more than €1.2m for office space in the new development, which is the highest rate paid for government offices anywhere outside of the capital

“Someone is hiding something and I will be asking for details next week,” added Deputy Burke.

[PaddyJoe]

Report on the Tom Browne Anglo case here:

ANGLO IRISH Bank is seeking summary judgment for more than €50 million against a former director and one-time head of the bank’s Irish lending division, Tom Browne, over loans secured on shares in the bank and various property investments.
http://www.irishtimes.com/newspaper/finance/2010/1102/1224282487100.html

[wickedfairy]

well done Ulick Burke, keep digging.

[PaddyJoe]

A very interesting development in the Tom Browne v. Anglo case today:

The High Court has ordered Anglo Irish Bank to disclose minutes of board and senior management meetings relating to the deterioration of its share price between 2007 and 2009.
The bank's former head of lending, Tom Browne, secured the discovery orders at the Commercial Court as part of his defence to a case taken by the bank to recover €50m in unpaid loans.

Mr Browne will also be given access to information on Anglo's loans to businessman Sean Quinn and his family.

The bank had agreed to release some of the documents, subject to confidentiality obligations, but Mr Justice Peter Kelly said he was entitled to more information.

The court also ruled he was entitled to ask questions about Anglo's loans to directors and about the reasons for the movement of €7.3m in loans between Anglo and Irish Life and Permanent.
I assume the information involved will not become public however.

The judge said this information could be elicited through correspondence or 'interrogatories' and would not require an order for discovery.

Mr Browne alleges Anglo engaged in wrongful and unlawful conduct which undermined the bank's stability and failed to inform him of these activities.
http://www.rte.ie/news/2011/0414/anglo.html?utm_source=twitterfeed&utm_medium=twitter

[PaddyJoe]

Quite apart from the court case I wonder what happened to the Financial Regulator's investigation into these gentlemen:
November 2009

The financial regulator is investigating how two senior managers with Allied Irish Banks (AIB) built up multi-million euro property portfolios while working for the bank.
Tommy Hopkins, AIB’s head of commercial banking, and John Hughes, head of business banking in Galway, have separate business partnerships with Tom Browne, a former director of Anglo Irish Bank.
Trading under the name Ballybrit Partnership, Hughes and Browne are landlords to the Revenue Commissioners in the €18m Fairgreen building near Galway railway station. Last year the state paid them €1.2m in rent. According to the Office of Public Works (OPW), this is the highest rent that it paid outside Dublin.
Hughes and Browne are also landlords to the agriculture department in the 64,000sq ft Dockgate building on Galway’s quays. The OPW paid €744,825 to lease that office.
The financial regulator would not comment on its investigation but said: “We are aware of the matter. All banks must ensure they have the appropriate systems and policies in place to avoid conflicts of interest.”


opkins was the main contact in AIB for property developers working in the Dublin area. He played a central role as AIB increased its exposure to property development in the last two years of the boom. His performance as a lender was already under scrutiny as AIB prepared to shift toxic loans into the National Assets Management Agency (Nama). Hopkins is the director of a company which built more than 200 houses in north Dublin. Hopkins, Browne and Paul Pardy, a developer and former Anglo manager, are all directors of PBH Endow. Hughes, who was one of Hopkins’s top performing managers, is also a business partner with Browne. They have built up a property portfolio that includes the Dockgate and Fairgreen commercial developments in Galway. Fairgreen was originally built by Castlehope, a company owned by Bernard McNamara and Jerry O’Reilly, the developers.
A source close to Hughes and Browne said neither AIB nor Anglo had financed the purchase of the Galway buildings.


Up to Friday morning, under the negotiator’s name Fairgreen Property Management, there were 31 properties belonging to the Ballybrit Partnership for sale or lease on Daft.ie. The properties listed Hughes’s home address in Galway as the point of contact. All properties were removed from the website after the publication of a story that said AIB was investigating Hughes and Hopkins.
Neither Ballybrit Partnership nor Fairgreen Property Management are registered limited companies. Both Browne’s and Hughes’s wives, however, are joint directors in Fairgreen Residential Management and Fairgreen Block Management. Both companies have recorded limited activity and have no registered mortgages.
AIB refused to comment on the case. For the past two weeks the bank insisted to The Sunday Times that there was “no issue” with either managers’ property interests.

http://www.timesonline.co.uk/tol/news/world/ireland/article6927062.ece

[PaddyJoe]

Sean Quinn's lawyers are looking at the Maple 10 transaction and Tom Browne's defense against Anglo's pursuit of 50m of debts against him:

Representatives for the family have, in preparation for their legal action, considered arguments made by former Anglo head of lending Tom Browne in his defence of an action taken by the bank over debts of €50 million.
Mr Browne has claimed that his loans have been invalidated due to Anglo’s alleged fraudulent misrepresentation over its “silence” in relation to the Quinn loans and matters relating to its share price.
He has argued that the Quinn loans were provided to enhance the bank’s share price artificially.
Last month the Commercial Court ordered Anglo to hand over information about the amount and purpose of loans to the Quinns.
It has emerged that Anglo has offered Mr Quinn the opportunity to remain in his Co Cavan home if he co-operates with the bank on a proposal to reduce his borrowings. Anglo has personal guarantees from Mr Quinn, whose family owes the bank €2.88 billion.
http://www.irishtimes.com/newspaper/finance/2011/0503/1224295912502.html

[ang]

I wonder if the Northern Ireland case in which the Golden Circle deal was said to appear "improper and unlawful" by Mr Justice Deeny will be referred to in any action taken by the Quinn family ?

[PaddyJoe]

Tom Browne case grinds on:

Tuesday November 29 2011
ANGLO Irish Bank has been ordered to give a former head of lending any documents relating to "special conditions" attached to loans to businessman Sean Quinn.

Thomas Browne, of Ferney Hill, Brighton Road, Foxrock, Co Dublin, sought the documents for his defence to the bank's claim for €50m judgment orders against him over unpaid loans.

Yesterday, Mr Justice George Birmingham granted an order requiring the bank to produce some of the material sought.


http://www.independent.ie/business/anglo-to-give-over-quinn-loan-material-2947769.html

[C. Flower]

A very interesting development in the Tom Browne v. Anglo case today:

I assume the information involved will not become public however.

http://www.rte.ie/news/2011/0414/anglo.html?utm_source=twitterfeed&utm_medium=twitter

Justice should surely be seen to be done ?


The High Court has ordered Anglo Irish Bank to disclose minutes of board and senior management meetings relating to the deterioration of its share price between 2007 and 2009.
The bank's former head of lending, Tom Browne, secured the discovery orders at the Commercial Court as part of his defence to a case taken by the bank to recover €50m in unpaid loans.

Mr Browne will also be given access to information on Anglo's loans to businessman Sean Quinn and his family.

The bank had agreed to release some of the documents, subject to confidentiality obligations, but Mr Justice Peter Kelly said he was entitled to more information.

The court also ruled he was entitled to ask questions about Anglo's loans to directors and about the reasons for the movement of €7.3m in loans between Anglo and Irish Life and Permanent.

[PaddyJoe]

Almost a year on and Tom Browne is still trying to extract confidential documents from Anglo. He wants to see a two-page document referred to as Appendix 9 which formed part of a January 2009 28-page internal bank report on the bank's relationship with the Quinn Group.
Browne believes that Appendix 9 contains details of a September 2007 dinner of Anglo directors where the revelation of the 24% of Anglo shares held by Quinn in the form of CFDs was discussed.

Some details of the September 2007 Heritage House meeting were set out in the book Anglo Republic by Irish Times journalist Simon Carswell, Ms Cross said. This information, given Mr Carswell’s “unparalleled access” to Anglo records, was particularly useful, and stated that directors had discussed whether to tell Mr Browne, who was resigning from Anglo, about the Seán Quinn stake. It was concluded Mr Browne should not be told.

Mr Browne believed that document was likely to refer to a decision not to tell Mr Browne about the Quinn contracts for difference, Mr O’Higgins said.
http://www.irishtimes.com/newspaper/finance/2012/0315/1224313322046.html

[PaddyJoe]

There's Tom Browne mentioned once again in his role as head of lending with Anglo Irish:

McKillen’s dealings with financiers from across the globe as he sought to raise finance to purchase a further stake in the hotel group was the subject of much of the hearing this week. Among the friends who McKillen said “would have delivered” financially were Bahamas resident investor Joe Lewis, an associate of Dermot Desmond and John Magnier, and Denis O’Brien, “the world’s greatest telecom entrepreneur”, as McKillen described him.

The court heard details of how, throughout 2011, McKillen interacted with some of the world’s wealthiest investors and private equity houses in his bid to secure finance. Among these were Och-Ziff, the US hedge fund which is believed to have been involved in the short-selling of Irish financial stocks in 2008. The court heard that Tom Browne, former head of lending with Anglo Irish Bank introduced McKillen to Och-Ziff. The court had previously heard that Browne had helped arrange the original loan for the redevelopment of the Connaught hotel.

McKillen also held discussions with Singapore tycoon Ong Ben Seng, the owner of the Hilton in Singapore and the Metropolitan Hotel in Park Lane in London.

Other names mentioned during evidence included Walter Kwok, the billionaire owner of the Four Seasons and IFG in Hong Kong.

The court heard Kwok has since been arrested on alleged charges of corruption. Overall, however, it is Paddy McKillen’s relationship with IBRC that is perhaps most interesting. During the hearing on Thursday McKillen repeatedly stressed the strength of this relationship, noting that he is in text contact and speaks once a week to chief executive Mike Aynsley.
http://www.irishtimes.com/newspaper/finance/2012/0512/1224315983434.html

[C. Flower]

http://i.dailymail.co.uk/i/pix/2011/11/13/article-2060905-0EC749B300000578-244_634x793.jpg

The idea that the "head of lending" in Anglo Irish didn't know about the Maple 10 is in itself interesting.

The fact that Anglo Irish "allowed Quinn to keep his family house" is new to me.

Must look for a picture.

Ah.


An indoor golf simulator, a putting green overlooking a 15 metre swimming pool, a sunken hot tub, a Jacuzzi pool, a cinema and a snooker room – welcome to the bankrupt world of Seán Quinn.
He declared himself penniless on Friday but the controversial Cavan businessman who owes Anglo Irish Bank €2.8bn will still be entitled to live in his family home, which cannot be seized. And few bankrupts can claim a family home as impressive as Mr Quinn's 14,700 square foot mansion beside the Quinn Group's Slieve Russell Hotel in Ballyconnell, Co. Cavan.
During bankruptcy proceedings, all assets – bar the family home – are collated and put under the control of a court-appointed bankruptcy official. This means that Anglo Irish Bank will not be able to seize the Quinn home despite the mind-boggling amounts of money it is owed by the family.


Read more: http://www.dailymail.co.uk/news/article-2060905/Sean-Quinns-palatial-bolthole-exposed-He-declared-penniless-wont-going-home-comforts.html#ixzz1ude23lxV

[PaddyJoe]

Tom Browne wants to subpoena Fitzpatrick, Drumm, Sean Quinn and IT journalist Simon Carswell:

THE former head of lending at Anglo Irish Bank is seeking to subpoena some of its former executives, including chairman Sean Fitzpatrick and CEO David Drumm, for his defence of the bank's claim for €50m judgment orders against him

Mr Browne, Ferney Hill, Brighton Road Foxrock, Dublin, head of lending at Anglo between 2005 and 2007, claims he has no liability for some €50m loans on grounds including, when the loans were made, the bank was allegedly aware the interest acquired by Sean Quinn in the bank was such as to undermine its stability and to render his shareholding valueless.

Had he known of such matters, he would never have exercised his share options in late November 2007 or held on to shares which became "worthless", he claims.

The case will address a wide range of issues, including claims by Mr Browne Anglo directors
http://www.independent.ie/business/irish/former-anglo-executive-wants-to-subpoena-sean-fitzpatrick-and-david-drumm-3143696.html

[PaddyJoe]

The saga continues. So David Drumm is '"not amenable to sub poena'. ;)

FORMER Anglo Irish Bank head of lending Thomas Browne intends to sub poena bankrupt businessman Sean Quinn Snr and two former senior executives in the Quinn Group in defending the bank's claim for €50m judgment orders against him, the Commercial Court heard today.

Mr Browne will also sub poena former Anglo Chairman Sean Fitzpatrick and other former or serving directors, non-executive directors and officials of the bank, including Patrick Whelan, Declan Quilligan, Michael O'Sullivan, Lar Bradhsaw, Elma Kinnane, Michael Jacob, Anne Hearty, Garry McCann, Natasha Mercer and Willie McAteer.

While Mr Browne had intended to sub poena former Anglo CEO David Drumm, he has now decided not to, Mr Justice Peter Kelly was told by Micheal P. O'Higgins SC, for Mr Browne. They had been unable to make contact with Mr Drumm who was "not amenable to sub poena".
http://www.independent.ie/business/irish/sean-quinn-to-be-subpoenaed-in-former-anglo-exec-thomas-brownes-case-3155431.html

[Stanley 2]

If David Drumm was helping out Tom Browne with a bit of steerage from afar, this could get very interesting, there will also be a lot of Anglo staff watching closely with their own info, all having lost a bundle.

[The Moth]

The nexus of corruption in Ireland is the commercial lease. The politician gets paid for state leases. The landlord is guaranteed a windfall income by the UORR clause and an easily corrupted rent arbitration system.. Look hard at who are the state landlords. Judge Moriarty spotted it in the Ben Dunne case and the Telecom building. "The word corruption is only used once in the report - and it refers to an attempt made by Mr Lowry to procure an unwarranted rent increase for a property owned by another businessman, Ben Dunne.
Mr Lowry sought to influence the outcome of an arbitration in relation to rent payable by the state owned Telecom Eireann for a building owned by Ben Dunne.
If it had succeeded, the taxpayer would have ended up paying between three and seven million euro extra in rent to Mr Dunne's company.
Justice Moriarty said the matter was "profoundly corrupt to a degree that was nothing short of breathtaking".
There is a new version now where NAMA provides 70% state funding to a lucky investor who has a captive state tenant. Look at no. 1 Warrington Place, here you have the tax payer funding the purchase and the tax payer paying the rent, which is subject to an upward only rent review. BONANZA http://www.irishtimes.com/newspaper/commercialproperty/2012/0425/1224315141410.html

[The Moth]

Another one to watch!
We not only have had to pay 713 million for the B]The National Convention Centre[/B] we are now going to have to pay back the loan that was used to build it, as the Developer treasury is now insolvent.
"Under the public-private partnership agreement, the State pays the company an annual charge of about €47 million a year for the first five years, and just under €24 million for the subsequent 20 years. The building will then revert to the full ownership of the State.

A report by the Comptroller and Auditor General published last September found that O’Donoghue decided to proceed with a national conference centre in 2005 after being told the costs would outweigh the benefits by up to €217 million.

The report also found that the winning consortium’s bid was “the most expensive proposal”, and its selection was based on higher marks for design, construction, operation and maintenance."

http://www.independent.ie/business/irish/state-will-pay-713m-to-nama-developer-for-conference-centre-2252119.html