Anglo Chairman resigns

445279.ie

http://www.rte.ie/business/2008/1218/fitzpatrick.html

mike65

87 million loan? Was he buying yaughts?

Much more to come on this tomorrow no doubt

MementoMori

Doesn't say much for the financial regulator or auditors, if this was going on for a number of years.

Expect a further drop in their market value tomorrow.

MementoMori

Quick search turned up the following

Hmm I wonder why he didn't agree with tough regulation of business?

Something to hide perchance?

FitzPatrick rails against ‘corporate McCarthyism’
Sunday, July 01, 2007 -
Anglo Irish Bank chairman Sean FitzPatrick raised eyebrows recently with his diatribe against the ‘corporate McCarthyism’ of what he saw as over-zealous regulation of businesses, but the specific target of his ire remains unclear, writes Ian Kehoe.

Having run the boardrooms of some of Ireland’s most prominent public companies, Sean FitzPatrick knows the value of picking his battles - and his words - carefully.

So when the chairman of Anglo Irish Bank and Smurfit Kappa launched into a tirade against what he called ‘‘corporate McCarthyism’’, he knew the sort of reaction he was likely to elicit.

Addressing a recent gathering of businesspeople, FitzPatrick said that the tide of regulation had gone too far. He said the increasing burden of regulation and compliance was threatening the entrepreneurial zeal that had made the Irish economy the envy of the world.

‘‘It is time to shout stop,” FitzPatrick told the Experian business lunch.’ ‘In my humble opinion, our wealth-creators should be rewarded and admired, not subjected to the levels of scrutiny which known criminals would rightly find offensive. We should be proud of our success, not suspicious of it.”

FitzPatrick, who is also on the board of Aer Lingus, did not say who his criticisms were specifically directed at. However, most people in the gathering assumed that he was taking a pot-shot at the Office of the Director of Corporate Enforcement (ODCE),the state body charged with tackling corporate crime.

Within 24 hours of the speech, the director of corporate enforcement, Paul Appleby, took the unusual step of writing to FitzPatrick, asking him if he had any particular problems with his office or his methods.

On Monday last, FitzPatrick picked up the phone and called Appleby. The banker told the corporate enforcer that his criticisms were not directed at Appleby or his office, and that had not been the intention of his speech.

‘‘We had a good conversation, and he outlined his position to me,” said Appleby. ‘‘He said he did not intend his comments to be taken as a criticism of this office at all.”

Appleby said he rejected any suggestion that his office was ‘‘anti-business’’ or ‘‘heavy-handed’’. He said the ODCE had actually put forward numerous proposals that would decrease the regulatory burden for Irish companies.

So if the ODCE was not FitzPatrick’s intended target, who was? In truth, the businessman could have been taking aim at any one of a dozen state bodies. Whatever, the industry or the profession, there is a state-funded watchdog keeping an eye on it.

From the Competition Authority to the Health and Safety Authority, companies are being issued with new guidelines on an almost weekly basis.

A company employing fewer than five people, for example, is forced to comply with regulations from the ODCE, the Companies Registration Office, the Labour Inspectorate, the Department of Enterprise, Trade and Employment, the Revenue Commissioners and the International Accounting Standards Association.

The bigger the company, the more regulators there are to be obeyed. TheFinancial Regulator now has significant authority, while Europe is constantly issuing new regulations governing business.

Many of these bodies are actually covering the same areas. In human resources, for example, there are currently 25 Acts and eight bodies regulating the area. A recent government report found that red tape and over-regulation were costing Irish businesses more than half a billion euro a year.

‘‘We are not saying that there should not be regulation,” said John Dunne, chief executive of Chambers Ireland, the business lobby group.

‘‘But the worry is that a lot of it is not relevant, or is far too burdensome.

‘‘Directors are now constantly looking over their shoulders, erring on the side of caution. The stated objective of someone like the ODCE is to take the risk out of business. But business and entrepreneurship is about taking risks.”

Dunne, whose body represents 12,000 businesses, said it was not simply a case of lightening the regulatory burden, but rather changing how it was implemented.

‘‘At present, the implementation is dangerously bigoted,” he said.

‘‘The onus is on you to prove that you are innocent. You have to prove it to people who simply do not have a clue, or do not apply the same rules to themselves. Look at the public sector and the unions - they operate by different rules than the rest of us.”

Dunne said that most business leaders shared FitzPatrick’s views, but were apprehensive about going public with them. He said it was telling that FitzPatrick made the comments only after he had stood down as chief executive of Anglo Irish Bank.

‘‘There is a lot of fear out there. I think he was right with the McCarthyism comparison. The general idea of regulation is right, but it is the implementation. They are implementing the regulations with an excessive zealotry,” he said.

The thrust of FitzPatrick’s and Dunne’s criticisms is that the state has created a climate that is not suitable for encouraging entrepreneurs. For example, an increasing number of Irish directors now find themselves sanctioned by the High Court for their activities in failed businesses.

The litmus test for restriction proceedings - to determine if a director should be barred from company directorships - centres around the phrase ‘‘honestly and responsibly’’.

A director who is found to have acted entirely honestly but made a few business mistakes can, under this test, be restricted as a director.

Last year, more than 100 directors were restricted for their roles in collapsed companies. Before the creation of the ODCE, less than a dozen directors a year were restricted by the High Court.

The financial services sector has been targeted more than most. The Financial Regulator recently ran into conflict with the banking industry over plans to force bank directors to sign compliance statements, attesting to their suitability to serve as directors. The move is meeting widespread opposition within the industry.

‘‘The last five years have seen enormous changes in the regulatory framework for the financial services industry, and this has placed severe strain on the industry’s ability to compete and innovate,” said Brendan Kelly, regulatory affairs executive of Financial Services Ireland.

‘‘However, the amount of regulation as highlighted by Sean FitzPatrick is only one part of the problem - the quality of it and its effectiveness is also extremely important.”

The government has already acknowledged that the level of red tape and regulation needs to be cut significantly.

A report by the government’s Business Regulation Forum, published earlier this year, found that the burden on firms from filling out forms and making returns was stifling enterprise and hurting Irish growth.

T he report recommended that a burden-reduction programme should focus on five areas: tax; health and safety environmental regulation; requests for statistical information; employment law; and company law.

The report also recommended more collaboration between government departments and agencies. A new interagency working group has since been established.

Last March, the European Commission set a target to reduce the administrative burden arising from EU legislation by 25 per cent by 2012.It urged member states to do likewise.

‘‘The real problem is that executives don’t generally contribute to the regulation or compliance debate until a regulation is about to come into effect,” said Peter Oakes, director of Compliance Ireland.

‘‘Likewise, we don’t seem to focus on the benefits some regulations give Ireland. For example, MiFID and mutual funds regulations have actually created employment.”

For FitzPatrick, though, reducing the regulatory burden is just part of the overall solution. In his speech, he said that business success could only be created in an environment of adequate regulation.

‘‘Have we reached a situation where the weight of compliance with the various financial reporting standards and other corporate regulations is now so heavy that entrepreneurs are no longer willing to bear it?” he asked.

‘‘Among the more insidious aspects of the current regulatory environment is its apparent presumption of guilt on the part of entrepreneurs and businesspeople generally. T he whole structure seems to be akin to an annual ‘proof of innocence’ statement.”

http://archives.tcm.ie/businesspost/2007/07/01/story24795.asp

VO

Another pillar of business society bites the dust. It is an absolute shame. Mr Fitzpatrick only broke the rules of corporate governance. All he did was hide the fact that he had an €87 milion loan from his own bank. Sure everyone knows that all it took was a single phone call to have the loan switched to one of his buddies institutions and then switched back when the auditors had done their duty. It happens all the time.

Once again we see a "great" man being villified and suffering terribly because of a misdimeanour. This happens all to often in this country to Politicians and business people whose love of democracy and the free market are paramount in their beliefs

When are people in Ireland going to learn that rules and regulations are only there for "little" people. People of Mr Fitzpatrick's pedigree are not bound to observe the rules and regulations that ordinary people like me and you have to observe

mike65

The man should be done for corporate malfeasance as for the regulator...:rolleyes:

VO

Leave the regulator alone he is doing a great job at present. He used to be a kosengas regulator

pipsqueak

What de ye reckon? 26cent per share? worth buying a few?

mike65

Those shares are worthless, the bank won't exist in a few months. It'll get forceibly merged with Irish Life & Permanent I expect and shareholders will get a complimentary Parker pen.

http://www.todayfm.com/Shows/Weekdays/Matt-Cooper/listen.aspx check out the downloads for todays show later (pick the file for 5-6pm) a Sean FitzPatrick interview from last year is replayed in full. Worth hearing.

jo.king

Just bought a few few ... WATCH THIS SPACE!!!!!

Johnny Volume

The Financial Regulator is as about as effective as a chocolate ashtray. Himself and the head of the Central Bank should be shot from a canon as quickly as possible

As for Sean Fitzpatrick, the man is the personification of arrogance. At the time the Govt gave a guarantee to the banks, he was of the opinion that the media were blowing things out of all proportion - he didn't feel the need to apologise or feel greatful for the lifeline they had been thrown. In fact, he felt the need to offer his opinion regarding what the Govt should tackle in the upcoming budget - means testing childrens allowance.

It'll be intersting to see if he's prosecuted for breach of the Companies Act 1993

Show_me_Safety

Companies Act desn't apply to the company if that company is a bank.

thelurch

I bet Sean Quinn is tossing and turning tonight !! SUCKER Jaysus how much has he lost now ?? It was the guts of a billion a few weeks ago

sofireland

Heh, maybe quinn insurance will buy them up now?

rrpc

Show_me_Safety wrote: »

Companies Act desn't apply to the company if that company is a bank.

Really? What Act applies to banks then? Obviously the won't need auditors either.

Read section 31 of the companies act

Johnny Volume

Show_me_Safety wrote: »

Companies Act desn't apply to the company if that company is a bank.

Says who? It most certainly does apply.

Johnny Volume

thelurch wrote: »

I bet Sean Quinn is tossing and turning tonight !! SUCKER Jaysus how much has he lost now ?? It was the guts of a billion a few weeks ago

Apparently, in the region of €1.5 billion at this stage. Ouch!

davidas380

The case where Sean Quinn was fined €3.5 million for his gamble on Anglo Irish using Quinn Insurance premium funds should be reopened now in the context of the Anglo and further investigation must be carried out into the affiars of Quinn with Anglo. Why does the ordinary taxpayer have to bail out the richest man in Ireland just because of his massive gamble going wrong using Quinn Insurance money?
Is the government afraid of tackling Sean Quinn with thorough investigations into his affairs? The taxpayer demands an investigation.