Anglo Irish Bank (Part 1)

The first in a multipart series looking at the companies and subsidiaries of Anglo Irish Bank, now a State-owned entity. Happily the series almost coincides with the first anniversary of the bank guarantee announcement. Onto the details:

First up is Anglo-Irish Bank (Nominees) Ltd.

Second a definition: A nominee company is a company formed by a bank or other organisation for the purpose of holding shares on behalf of the beneficial owner. Nominee company employees carry out all the paperwork and other tasks associated with the documentation of shareholding and arrange for necessary transfers when a share is purchased or sold.

The company has an address at Stephen Court 18/21, St. Stephens Green Dublin 2, like many Anglo Irish companies.

The company was incorporated on the 23rd of October 1973 and is a private limited company with a latest account date of September 30, 2007. The company is a mutual and pension fund/Nominee/Trust/Trustee company registered in Ireland.

Readers will be glad to know that as of its last filing date, the company has a 100% solvency ratio, but no employees. It’s industry/activity is listed as “legal activities” – it is a nominee company after all.

The company has two directors, Patrick Whelan and William McAteer, with Natasha Mercer as secretary. This trio are on most of the company boards related to Anglo.

But here is where it seems to get interesting: shareholders.

Now obviously Anglo Irish Bank Limited has as a shareholder: “Minister of Finance, Ireland”.

But there are other shareholders, too. You see Anglo-Irish Bank (Nominees) Ltd is jointly owned by Anglo Irish Bank Limited (the Minister now) and Sean P FitzPatrick, in a 50/50 split. Seanie has no beneficial interest.

And in November 2008, prior to nationalisation but post bank guarantee, who pops up as a shareholder? NTR Public Limited Company. Remember them? Why oh why? I can only tell that NTR appears to have held a >50.00, or less than a 50% stake in Anglo-Irish Bank (Nominees) Ltd, prior to our good minister ever having a stake in the company. Nominee companies are fun. NTR likely used this nominee company along with Mr Fitzpatrick who was then still working for Anglo, for some transaction or other.

But wait. It doesn’t stop there. Does our humble company have any subsidiaries? Why yes, we do.

Tysan Invesments Ltd, is a wholly owned subsidiary of the nominee company.

And who are the people behind Tysan Investments? Let’s take a look.

Mr Denis O’Brien Director (since 30/05/2005)
Mr Gerard Davis Director (since 18/04/2006)
Mr Gary McGann Director (since 30/05/2005)
Mr John Kerry Keane Director (since 30/05/2005)
Mr Peter Butler Director (since 18/04/2006)
Mr Paul Coulson Director (since 30/05/2005)
Mr Patrick Gunne Director (since 30/05/2005)
Mr Peter Robert Butler Director (since 18/04/2006)
Mr Sean Melly Director (since 30/05/2005)
Mr Peter Butler Company Secretary (since 18/04/2006)
Mr Peter Robert Butler Company Secretary (since 18/04/2006)

Gosh, a veritable who’s who! Mr O’Brien (yes, that one) is listed as a director of a company called Tysan Investments.

Garry McGann is the same name as that chief executive of Smurfit. And is this the same John Kerry Keane?

And is that Peter Butler, the same Anglo employee who owes Anglo Irish Bank €861,000?

Is that Paul Coulson of Ardagh Glass fame?

Is that Pat Gunne, now of Green Property (famously owned by Stephen Vernon?)

Sean Melly, who wants to buy Eircom?

Now if Tysan is wholly owned by Anglo Nominees, then we have a stake in Tysan, right? So what subsidiaries does Tysan have? I’m glad you asked. Tysan has a subsidiary called Balcuik Limited, which itself has two other subsidiaries, Atrium Property Developments Limited (formerly Alert) and Martlet Holdings, all registered in Ireland.

Tysan was incorporated on February 28, 2005. It has an address listed at First Floor 11/12 Warrington Place Dublin 2.

Balcuik subsidiary Martlet has the following directors:

Mr James McKenna Director (since 7/03/1994)
Mr Mark Munro Director (since 26/02/2003)
Mr Paul Culhane Director (since 13/11/2002)
Mr Stephen Vernon Director (since 7/03/1994)
Mr Mark Munro Company Secretary (since 21/06/2005)

Ah, now we have the Green Property connection – Stephen Vernon.

And let’s not forget Balcuik Limited, a shareholder in Martlet. Ah! Balcuik has the same directors as Tysan. But Balcuik had, a shareholder in the form of – Green Property.

And lastly to that subsidiary of Balcuik – Atrium.

Atrium has the same address as Balcuik, and has total assets of almost €10,000,000 (but with current liabilities of €4,457,315). Its last account date was May 30, 2008. And Atrium’s shareholders? The same as Tysan. And who acted as banker for Atrium? Ah yes, Anglo Irish Bank.

Praise be though, for anyone confused by this point. We have an informative document from the Competition Authority.

Proposed acquisition by John Kerry Keane, Paul Coulson, Denis O’Brien, Lindat Limited, Lar Bradshaw, Sean Fitzpatrick, Gary McGann, Paddy Wright, Sean Melly, Pat Gunne, Longstone Estates, and Lochlann Quinn, through Tysan Investments Limited of Balcuik Limited

2. The acquirers are:
• John Kerry Keane: A private individual who is active in the media sector.
• Paul Coulson: Chairman of Ardagh plc and a director of other companies.
• Denis O’Brien: A private individual who is active in the media sector.
• Lindat Limited: The owner of this company is the Chairman of Harcourt Holdings which is active in the property sector in Ireland, Britain and overseas.
• Lar Bradshaw: Chairman of the Dublin Docklands Development Authority and amongst other things, serves as a non-executive director of Anglo Irish Bank Corporation plc.
• Sean Fitzpatrick: A non-executive chairman of Anglo Irish Bank Corporation plc and serves as a non-executive director of the Dublin Docklands Development Authority, Greencore plc, and Aer Lingus.
• Gary McGann: Chief Executive Officer of the Jefferson Smurfit Group. He is Chairman of the Dublin Airport Authority and is President of IBEC. He serves as director for a number of companies including Anglo Irish Bank Corporation plc.
• Paddy Wright: Chairman of the RTE Authority and a non- executive director of Anglo Irish Bank Corporation plc.
• Sean Melly: An entrepreneur who is active in the media sector.
• Pat Gunne: Chief Executive of Gunne Group which is active in the
property sector in Ireland.
• Longstone Estates Limited: A property holding company owned by a family Trust.
• Lochlann Quinn: Deputy Chairman of Glen Dimplex which is active in the manufacture of electric heating and domestic appliances. Additionally, he is a Director of The Merrion Hotel.

And the deal:

Tysan does not generate any turnover in the State and is an acquisition vehicle specifically created for the purposes of acquiring Balcuik. Thus, the Authority regards the named individuals and companies rather than Tysan as the undertakings involved.1
3. Balcuik, the target, is a wholly owned subsidiary of Green Property. Balcuik’s main business activities concern the ownership of the landlord interest in Blocks A and B of the Atrium Building located in the Sandyford Industrial Estate, and the leasing of Block B to Microsoft Corporation, and carrying out ancillary landlord activities. Alert Developments Limited, a wholly owned subsidiary of Balcuik, owns the entire legal interest and [ ] of the beneficial interest in Block A. Balcuik’s turnover of [less than €5m] solely comprises rental income received in connection with its landlord interest in Blocks A and B of the Atrium Building.

The CA found there were no competition concerns.

I have to say I am fascinated. I had never heard of all these guys partnering together to buy some buildings in Sandyford. The Tribune though, did.

Balcuik is owned by another company called Tysan Investments, which is in turn owned by a nominee company from Anglo. However, FitzPatrick and Bradshaw are understood to remain involved in the building.

Tysan made a loss of €2.8m for the year ended 30 May 2007, up from €2.7m the previous year, and the total shareholders’ deficit stood at €5.5m. It had an interest rate swap agreement denominated in euro to convert debt of €76.5m from floating rate to fixed rate. That facility expires on 31 May 2010.

Well there you go. I do wonder now though if Anglo has any charges on those properties, and if, at the end of the day, we own them (with Seanie of course). And all of those Green Property connections would lead me back to that conversation between Brian Lenihan and Stephen Vernon that was listed in Mr Lenihan’s diary for January 30, 2009, at 6.30 in the evening. What did they talk about?

I guess I am just as confused as everyone else… and Tysan is only one of the subsidiaries.

Update: Readers will be glad to know that there are new directors of Anglo-Irish Bank (Nominees) Ltd: Donal O’Connor and Declan Quilligan. Natasha Mercer remains secretary. The company has €3 of share capital (well it is a nominee company).

I’ve uploaded the most recent financial statement of the company.

Interestingly it says the following in a note at the end: William McAteer held 3.4m shares in Anglo at September 30, 2008, 502k shares as options and conditional awards of 80k shares. Pat Whelan had 447k shares, 603k share options and 68k condition share awards. Natasha Mercer had 17k shares, share options of 80k and 6,800 conditional share awards. These have all since been nationalised.

I have also uploaded the company’s most recent B1 Return.

Update 2: And the very helpful Grumpy has further clarified that background. I have corrected as appropriate.

Seanies holding in the company is in a nominee capacity. He has no beneficial interest. The reason for the holding is that the company predated the legislation allowing single member companies which was only introduced in the 90s. You will note the accounts state that the company is a wholly owned subsidiary of Anglo.

As a nominee company, it holds the shares in Tysan Investments but it is not a wholly owned subsidiary as it is acting as a nominee.

Re Balcuik the accounts are linked below. Although the shares in the parent company are held by Anglo Nominees, the accounts disclose the beneficial interests of the directors but this only accounts for 40% of the ownership.

Gunne, Melly, O’Brien, McGann, Keane & Coulson each have 200 shares or 6.66% each. That leaves Lindat Limited (this is a Pat Doherty of Harcourt Developments company),Lar Bradshaw, Sean Fitzpatrick, Paddy Wright, Longstone Estates Limited and Lochlann Quinn divvying up the rest.

Anglo does have a charge over the €106m borrowings that Tysan has from them secured on its assets. It also has a seperate charge on the Balcuik property.

The shareholders in Tysan don’t seem to have invested anything in the company apart from €3k share capital. The liabilities of the company are pretty much all bank loans. The charge, below, indicates there is no personal recourse to the borrowers. So, what happened? Anglo funded €70m of the purchase in 2005 and the 2006 accounts for Balcuik show a “ultimate shareholders loan” of €30m (probably lent by Anglo). The property was then revalued to €137m, handy that, and Anglo increased the borrowings and repaid the €30m to the shareholders. So there is no equity there. Anglo get arrangement fees of around €2m and as much interest as possible and probably all of the risk.

Company documents:

Tysan Accounts
Tysan B1
Balcuik charge
Balcuik accounts
Lindat B1
Lindat accounts