July 27, 2011 / 3:35 PM / 8 years ago

Ireland extends probe into Anglo Irish collapse

DUBLIN, July 27 (Reuters) - The Irish High Court gave investigators an additional six months on Wednesday to complete their probe into the downfall of Anglo Irish Bank, whose collapse helped destroy the country’s finances.

Anglo Irish Bank is the poster child for the reckless lending at the heart of Ireland’s financial crisis, accounting for over 40 percent of the 70 billion euros bill to save the banking sector from collapse.

The delay in charging the bankers responsible is a major political issue in Ireland and contributed to the collapse in support for the Fianna Fail government, which was cast from power in elections in February.

The High court in May refused a similar request by the Office of the Director of Corporate Enforcement (ODCE) after expressing concern about the lack of progress in the case, which has been running for two years.

In granting the request from the ODCE, Justice Peter Kelly said he had a clearer picture about why it was taking so long.

He said the case was of particular interest because of the “devastating consequences” of the collapse for individuals involved and the blow it dealt to the business reputation of the state.

Once the country’s third-largest lender, Anglo has twice broken its own record for losses by an Irish corporate, clocking up a loss of 17.7 billion euros last year, and is in the process of being wound down.

The ODCE and the police are looking at events leading up to the nationalisation of Anglo Irish Bank in early 2009, including whether deposits were used to mask large withdrawals.

The ODCE has sent an 8,000-page file to the country’s Director of Public Prosecutions relating to Anglo’s provision of loans to various parties to enable them to purchase shares in the bank in 2008. (Reporting by Sarah O’Connor; Writing by Conor Humphries; Editing by Elaine Hardcastle)

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