Irish ex-tycoon defends Anglo-Irish stake

Ireland's one-time richest man on Monday defended his decision to keep gambling on the success of the now defunct Anglo Irish Bank despite plunging share prices. Billionaire-turned-bankrupt Sean Quinn was speaking at the trial of three former executives of the bank, the collapse of which nearly broke the eurozone nation. Ex-Anglo Irish chairman Sean FitzPatrick and former executives Patrick Whelan and William McAteer deny providing unlawful financial assistance to individuals to buy shares in the bank. Quinn had a huge stake in the bank in the form of complex financial derivatives called contracts for difference, effectively gambles based on future share price changes. By September 2007 his stake was up to 24 percent despite the share price plunging by around a third, and he refused to sell it. "There were brokers left, right and centre talking about Anglo being the best bank in the world. I could see no reason why selling shares in Anglo would be a good idea. It turned out I was wrong," Quinn told the court. "The logic is very clear. The share price had reduced by around 40 percent -- the profits had increased by 46 percent in the year 2007. It was a phenomenal result." Quinn eventually suffered losses of over two billion euros relating to the derivatives. Contracts for difference involve investors taking a bet on whether a particular share price will rise or fall, instead of actually buying the share itself. The investor is paid the difference between the share's current value and its future value at a specified point so long as it moves the direction they predicted. But if it moves the other way then they have to pay the difference, exposing them to big losses. Fitzpatrick, McAteer and Whelan are charged with lending the bank's own money to 16 people -- including Quinn's wife and adult children -- to unwind Quinn's stake in the bank in July 2008, and to thereby keep its own share price up. Quinn, once ranked amongst the richest 200 people in the world by Forbes magazine, built his empire through cement, glass, radiator and manufacturing, and later acquired an insurance company and an extensive property portfolio. He was later declared bankrupt when his empire unravelled due to mounting debts from his Anglo gamble. He spent nine weeks in prison for contempt of court as Anglo Irish Bank attempted to get control of his assets. Anglo Irish lent aggressively to property developers during Ireland’s booming Celtic Tiger years but was left badly exposed when the Irish property market collapsed. In 2008, nearly 30 billion euros ($33.8 billion) of taxpayers money had to be pumped into the bank to prevent it from collapsing and in 2009 Dublin nationalised it. Last February, the bank, which had become known as the Irish Bank Resolution Corporation, was liquidated. The trial will be one of the longest in Irish legal history and is expected to run until May.