The former chairman of Anglo Irish Bank, Seán FitzPatrick, failed to disclose loans of up to €100m to Anglo's auditors or to the public in general, Dublin Circuit Criminal Court has been told.

After a month of legal argument, prosecuting lawyers outlined their case against Mr FitzPatrick to a jury of 13 people.

He has denied 27 charges under companies' legislation.

The jury will return tomorrow morning when the first witness will be called.

Mr FitzPatrick, who is 68, and from Whitshed Road in Greystones, has pleaded not guilty to 21 charges of making misleading, false or deceptive statements to the bank's auditors, Ernst & Young (now known as EY).

He has also denied six charges of furnishing false information between 2002 and 2007.

Prosecuting Senior Counsel, Dominic McGinn told the eight women and five men on the jury that what they were dealing with was allegations that between 2002 and 2007, the amount of money loaned by Anglo to Mr FitzPatrick and people connected with him was artificially reduced at the bank's year end.

He said Mr FitzPatrick was a director of Anglo and had a number of loans taken out for various reasons.

They were loans to him, his wife and other family members as well as loans to partnerships of which he was a member.

They grew from around €10m in 2002, the court heard, to around €100m in 2007 and were used for property development, including financing hotels and shopping centres.

Although Mr McGinn said the case was not about what the loans were for but about Mr FitzPatrick's alleged failure to notify the auditors about the extent of the loans and to reveal them in financial statements issued publicly.

He said the bank was required under company law to make declarations about the level of loans made to its directors.

At the bank's year-end, statements had to be made about those loans, generally and to the bank's auditors.

The prosecution case was that temporary arrangements were put in place in relation to these loans - reducing their amount.

He said the loans were refinanced temporarily for a period of around two weeks or so around the bank's year end to reduce the amount of money loaned by Anglo.

Mr McGinn said the way the loans were reduced was mainly through short term refinancing with Irish Nationwide Building Society.

He said Mr FitzPatrick would also transfer funds temporarily from deposit and savings accounts.

And on some occasions the short term loans would be repaid into "matching" or "parallel accounts" in Anglo.

He said the prosecution case was that Seán FitzPatrick authorised all this and did it to make sure his loans at year end would be artificially reduced.

Mr McGinn said the prosecution case was that the statements that had to be made under company law reflected only the reduced loans and did not take into account the fact that they had been temporarily reduced.

Mr McGinn said that during 2002 to 2007, legislation required banks to publish financial statements every year at their year end.

Mr FitzPatrick at the time was chief executive of Anglo Irish Bank and then chairman of the board.

Anglo's year end was on 30 September every year.

Mr McGinn said loans involving a bank's directors had to be disclosed and a bank's financial statements had to be audited by professional auditors.

The auditors had to look at the financial statements and certify they were a true reflection of what was going on in the bank at that point.

Mr McGinn said EY required, as part of the auditing process, certain formal representations from the bank's management called letters of representation.

These were representations made by and on behalf of the board of Anglo, essentially saying what they had told the auditors was correct and there was nothing else significant the auditors needed to know.

Mr McGinn said the prosecution contention was that it was not enough for those letters of representation to be a "snapshot" of the position at year end.

He said it was the bank's duty to furnish full information about the real picture.

If there was an artificial procedure where amounts of money were removed from the loan portfolio and replaced after year end, then the declarations were false and did not give a real, true and honest picture of the actual loan situation.

Mr McGinn said between 2002 to 2004, Mr FitzPatrick was one of two signatories on the letters of representation.

Between 2005 and 2007, the letters were signed by other directors.

But the prosecution contended that Mr FitzPatrick was still responsible for making sure the content of the letters was accurate because he was a prominent director of the bank.

He said the first 21 charges against Mr FitzPatrick alleged that the letters of representation were false, misleading and deceptive.

The final six charges alleged that the information in Anglo's accounts at year end was false, deceptive and misleading.



