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Thread: Was it legal for AngloIrish Bank to lend money to people for buying its own shares?

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    Politics.ie Member
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    Default Was it legal for AngloIrish Bank to lend money to people for buying its own shares?

    Today's London Times story "Barclay's chief gives up bonus..." (subscription link) says that UK "companies are not allowed to make private loans to investors buying shares in them." Presumably,this is an old law,one obviously needed to prevent the risk that financial institutions under financial pressure might use their financial resources to manipulate their own share prices. Given the Irish habit of copying important UK legislation,did Ireland pass any similar legislation? If not,why was the government so negligent? Was it legal for AngloIrish Bank to lend money to people for buying its own shares?

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    Politics.ie Member wombat's Avatar
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    I think this should be closed as there may be a law case.

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    Politics.ie Member Vega1447's Avatar
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    Ehh, no.

    It was illegal. That's like legal but with "IL" in front. So no difference really.

    Don't hold your breath waiting for the prosecutions to come to Court.

    Don't even go for a very long walk and expect any change on return...
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    From my understanding of company law a company can not normaly give assistance to purchese its own shares ie supervalue could not lend money to someone to buy shares but if its main business is leanding money ie aib then it is ok, but only if you are asking for the money and not the bank offering it to you.

    So me asking AIB for 1,000,000 to buy shares is good.

    AIB ringing me up and offering me 1,000,000 to buy shares illegal.

    So i

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    Politics.ie Member Boy M5's Avatar
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    Share support operation is illegal. Just look at the Guinness case
    "Keep firing & don't stop until I tell you" General Tom Barry

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    Quote Originally Posted by Boy M5 View Post
    Share support operation is illegal. Just look at the Guinness case
    Wasn't the Guinness case tried in the UK courts?

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    Politics.ie Member diaspora-mick's Avatar
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    Quote Originally Posted by patslatt View Post
    Wasn't the Guinness case tried in the UK courts?
    Sure was.
    Guinness share-trading fraud

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    Politics.ie Member TiredOfBeingTired's Avatar
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    Illegal
    But has anyone ever gone to jail for it?
    Doubt it!

    Law prevents market manipulation by banning firms from buying own shares - National News - Independent.ie

    "ANGLO'S former head of risk and the nationalised bank's former managing director in Ireland will be tried before a jury under section 60 of the Companies Act 1963.
    Although largely untested in the criminal courts, Section 60 is one of the key rules in Irish company law designed to prevent asset stripping, market manipulation and reduction in the share capital of a company.
    It does so by banning any company from buying its own shares.
    Section 60 bans a company from giving direct or indirect financial assistance -- including loans or guarantees -- to buy its own shares unless it goes through a triple-lock procedure to ensure that the share purchase is above board."
    Sometimes there is very little between historical and hysterical. One passes for the other. In time, the former remains forever, the latter is quickly replaced...

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    Quote Originally Posted by patslatt View Post
    Today's London Times story "Barclay's chief gives up bonus..." (subscription link) says that UK "companies are not allowed to make private loans to investors buying shares in them." Presumably,this is an old law,one obviously needed to prevent the risk that financial institutions under financial pressure might use their financial resources to manipulate their own share prices. Given the Irish habit of copying important UK legislation,did Ireland pass any similar legislation? If not,why was the government so negligent? Was it legal for AngloIrish Bank to lend money to people for buying its own shares?
    I think you'll find this forms part of the ODCE investigation into Anglo.
    "So how are things at the Campaign for the Freedom of Information, by the way?" "Sorry, I can't talk about that"

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    As the case(s) are ongoing I agree with wombat that this thread should close as there are huge potential legal difficulties abound about discussing same.
    “That which can be asserted without evidence, can be dismissed without evidence.” - Christopher Hitchens

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