Frankly a good old fashioned scandal would be a welcome break from the dismal
news about the economy that emerges each day and
Anglo Irish Bank
has happily obliged with a furore over undisclosed loans to its chairman.
Both chairman and chief executive resigned over the affair in December but
last week saw the turn of William McAteer, the bank’s finance director and chief
risk officer, to fall on his sword, leaving his second in command, Matt Moran,
as the FD designate.
Moran finds himself with a sudden promotion after it emerged late last year
that Anglo Irish’s former chairman, Sean Fitzpatrick, had taken loans from the
bank to the tune of e80m (£72m), but they were never disclosed to shareholders.
It’s not illegal, but has not been seen as best practice on transparency from
the company’s most senior board member.
Fitzpatrick resigned and so did CEO David Drumm. The bank had already gone
through the ignominy of being recapitalised by the Irish government, but the
scandal has undermined its reputation still further.
What will happen?
Moran will be working all the hours that God sends, not only to help manage
the recapitalisation but restore some trust in the tarnished image of Anglo
Irish. He will have to take extra care because the Irish government, which has
already publicly admonished the departed directors for ‘unacceptable behaviour’,
is buying into the bank with e1.5bn. For that they get a controlling share, 75%,
and the satisfaction of knowing that they eased jitters in the Irish market that
the bank was near collapse.
But with the whiff of scandal around the place Moran’s job will be to present
a break with the past and convince analysts that all is now out in the open at
Anglo Irish. The first part of that will come with an overhaul of corporate
governance at the bank, but Moran will have to be seen to be the very epitomy of
good corporate governance. Moran is well and truly in the spotlight.
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