- During the watch of the honourable Bradshaw and the honourable FitzPatrick the Dirty Dublin Developers Autocracy (DDDA) defined historic sections of Sandymount Strand and Ireland's national heritage as part of their docklands empire, signed off by Dick Roach, thus destroying James Joyce's elated moment on Sandymount Strand with his hand in his own pocket.
- The pair were also co-investors in a number of projects, including Fresh Mortgages, the Irish sub-prime lender that suspended its new loans in November. Most of their investments have not been publicised.
- Seán FitzPatrick and Lar Bradshaw were what is called, interlocking directors - Seán FitzPatrick served on the board of the Dublin Docklands Development Authority where Lar Bradshaw was chairman and vice versa.
In the final analysis, no laws, no rules, no regulations can prevent greedy, self-serving behaviour by company directors. All they can do is make such behaviour harder to engage in. Add to this, that greedy, self-serving people seek each other out. The old Irish phrase "Aithníonn ciaróg ciaróg eile" (one "beetle" recognises another) captures this aspect of corporate life beautifully. More at Irish Times.
Niamh Brennan is Michael MacCormac professor of management at University College Dublin, and is academic director of the Centre for Corporate Governance at UCDhttp://www.irishtimes.com/newspaper/finance/2008/1220/1229725700373.html
Bradshaw quits as joint loan with FitzPatrick revealed
CIARÁN HANCOCK, Business Affairs Correspondent
Sat, Dec 20, 2008
SEÁN FITZPATRICK’S resignation from Anglo Irish Bank on Thursday grabbed all the headlines, but he wasn’t the only director to fall on his sword.
Former McKinsey Ireland chief Lar Bradshaw also took his leave after it emerged that he had taken out a joint loan with Mr FitzPatrick, which was temporarily transferred to Irish Nationwide Building Society before its September 30th year-end.
This had the effect of hiding the loan from shareholders in the bank’s annual report.
The size of this joint loan was not revealed and Mr FitzPatrick said Mr Bradshaw had “no knowledge” of the temporary transfer of the funds.
Born in Dublin in 1960, Bradshaw spent 20 years with the blue chip management consulting firm McKinsey, working overseas and latterly as managing director of its Irish operation, which he founded.
He holds a Master’s in Business Administration degree from IMD in Switzerland.
Records at the Companies Registration Office show that he holds 12 directorships here, although that included Anglo.
He is listed as executive chairman of Cove Capital.
Bradshaw and FitzPatrick not only served together on the board of Anglo, which Bradshaw joined in 2004 – they were also both board members of the Dublin Docklands Development Authority, which had a multi-billion budget to redevelop 1,300 acres in the faded docks area.
The pair were also co-investors in a number of projects, including Fresh Mortgages, the Irish sub-prime lender that suspended its new loans in November. Most of their investments have not been publicised.
It did emerge, however, that Bradshaw invested in the Derek Quinlan-led group that backed the Four Seasons Hotel in Dublin.
On May 3rd, 1997, Bradshaw was appointed as chairman of the fledgling DDDA by John Bruton’s coalition government, a position he held for 10 years. He was said at the time to have no political affiliations.
At the time of his appointment, The Irish Times quoted a source as saying that Bradshaw was chosen to head the DDDA because of his “relative youth, expertise and incredible vision”.
Their dual memberships of the Anglo and DDDA boards drew criticism from various quarters, given the bank’s involvement in funding projects in the area.
In particular, the DDDA was a large investor along with Bernard McNamara and others in a vehicle called Becbay that paid €412 million to buy the former Irish Glass site in Ringsend.
That transaction was funded by Anglo.
Small in stature, Bradshaw was described by one senior financier as a “good man for building relationships and making introductions, but not one for detailed negotiations”.
One source said he successfully built relationships with the existing local communities in the Docklands, who found their daily lives disrupted enormously by the major construction work that has taken place over the past decade.
“He was able to play the role of the ‘real Dub’ even though he was groomed by McKinsey,” said one source. “It was a neat trick.”
Following his resignation from Anglo, and the questions that remain about the circumstances of his joint loan, Bradshaw will need all of his skills of persuasion if he is to rebuild his reputation.
© 2008 The Irish Times
Reputation of Ireland Inc is under spotlight after resignations
- Regulator stumbled on loans during inspection of rival bank's books
- 'Board has accepted resignation with regret'
- Drumm follows chairman in leaving Anglo
- Irish Nationwide denies impropriety in repeated loans to FitzPatrick
- Resignations will not interrupt recapitalisation
- Shock in financial circles at how FitzPatrick could have hidden loans for eight years
OPINION: There are questions about the behaviour of Anglo's board and management, the auditors and the regulators, writes Niamh Brennan
THE REPUTATION of Ireland Inc is again under the spotlight with the resignation of Anglo Irish Bank's chairman Seán FitzPatrick, chief executive David Drumm and non-executive director Lar Bradshaw for their roles in hiding loans to Seán Fitzpatrick from shareholders.
Seán FitzPatrick's loan raises many questions. Will the borrowings be repaid? Were the borrowings used for legitimate purposes? Were the borrowings used to prop up Anglo's share price?
There are also questions about the behaviour of the board, the management of the bank, the auditors and the regulators.
The Stock Exchange's Combined Code on Corporate Governance is not mandatory. Non-compliance is permitted, provided it is explained. The Anglo Irish board availed of this comply-or-explain derogation in a number of ways.
For example, the board deviated from the combined code requirement that a former chief executive should not become chairman of the company. The combined code objective is that no one person in a company should dominate. This requirement is fundamental, and very few companies ignore it. By retaining his power in the company Mr FitzPatrick reduced the risk of his loans being disclosed.
Mr FitzPatrick served on the board since 1985, while another so-called independent director was appointed in 1988. Under the combined code nine years is the maximum period of service permitted for a non-executive director to be described as independent.
Seán FitzPatrick and Lar Bradshaw were what is called, interlocking directors - Seán FitzPatrick served on the board of the Dublin Docklands Development Authority where Lar Bradshaw was chairman and vice versa.
However, the board expressed its "complete satisfaction" that the independence of the directors was not compromised, notwithstanding these three breaches of best practice standards.
Management in the bank must have (or should have) known that the loans were to Mr FitzPatrick. Know-your-customer is a key requirement of money laundering regulations - that is why bank customers have to produce passports and utility bills when opening new bank accounts. Mr FitzPatrick must have had the assistance of one or more executives to move his borrowings to Irish Nationwide and back to Anglo Irish Bank each accounting year-end over an eight-year period.
This is bad for Ireland Inc. Everyone charged with the governance of public and public-interest companies has a duty to protect Ireland's reputation in world markets and confidence in its financial institutions for the good of all its citizens - none more than the financial regulator. It is, therefore, puzzling to learn that "warehousing" of Seán FitzPatricks borrowings in Irish Nationwide was discovered by financial regulator staff in January 2008, yet there was a delay of 11 months before a team of inspectors was sent to Anglo Irish Bank in early December 2008. Is this appropriately responsive to protect Ireland's reputation as a good place to do business?
Given that the office of the financial regulator knew about this transaction as far back as January 2008, why was it not raised during the all-night discussions in the Department of Finance in September prior to the introduction of the State guarantee scheme?
Another aspect I don't understand is why the financial regulator is reported as stating that it does not appear that anything illegal took place. Surely, at the very least, there is evidence of breach of the common law fiduciary duty for directors - that they do not put there own personal interests ahead of the company? Also, is not telling the truth in the financial statements an offence?
Seán Fitzpatrick has referred to Ireland's regulatory regime as "corporate McCarthyism". The New York Times dubbed Ireland "the wild west of European finance". Two very contrasting views!
In the golden days of the Celtic Tiger it was "light-touch regulation" all the way. But, are the risks associated with light-touch regulation justifiable? Does light-touch regulation safeguard the billions of funds invested in Ireland or will these funds be withdrawn to more reputable jurisdictions? Are the thousands of jobs in the financial services sector more secure by virtue of light-touch regulation? Are wealthy investors attracted to countries with a robust regulatory regime or with a light-touch regime?
In the final analysis, no laws, no rules, no regulations can prevent greedy, self-serving behaviour by company directors. All they can do is make such behaviour harder to engage in. Add to this, that greedy, self-serving people seek each other out. The old Irish phrase "Aithníonn ciaróg ciaróg eile" (one "beetle" recognises another) captures this aspect of corporate life beautifully.
Niamh Brennan is Michael MacCormac professor of management at University College Dublin, and is academic director of the Centre for Corporate Governance at UCD
This article appears in the print edition of the Irish Times
Bradshaw and FitzPatrick not only served together on the board of Anglo, which Bradshaw joined in 2004 – they were also both board members of the Dublin Docklands Developers Authority, which had a multi-billion budget to redevelop 1,300 acres in the faded docks area.