Ex-senior PTSB official denies lender turned a blind eye to Lynn’s loan terms


A former senior bank official has denied that Permanent TSB ‘turned a blind eye’ to a condition that Michael Lynn repay a €1.9million loan, heard his trial for theft of millions of euros.

Former barrister Mr Lynn (53) is on trial in Dublin Circuit Criminal Court, charged with the theft of around €27million from seven financial institutions.

Mr Lynn, of Millbrook Court, Red Cross, Co Wicklow, pleaded not guilty to 21 counts of theft in Dublin between October 23, 2006 and April 20, 2007.

The prosecution alleges Mr Lynn obtained multiple mortgages on the same properties in a situation where the banks were unaware that other institutions were also providing financing.


The financial institutions involved are Bank of Ireland Mortgages Bank Ltd, Danske Bank, Irish Life and Permanent, Ulster Bank, ACC Bank PLC, Bank of Scotland Ireland Ltd and Irish Nationwide Building Society.

Sean Alger, former head of Permanent TSB’s business division, testified on Friday.

Asked by defense barrister Feargal Kavanagh SC, he said the bank had ‘robust’ procedures in place to analyze credit and borrowing and there was a ‘clear basis on which loans were made’ .

In April 2007, Mr Lynn had borrowed €1.9m from the bank when he applied for a €4.9m loan to buy eight residential investment properties in various locations in Dublin , according to the lawsuit.

The court heard that one of the conditions was that Mr Lynn was supposed to have repaid that €1.9million loan, but that fell behind schedule.

Mr Kavanagh told Mr Alger the bank was “happy to have the €1.9 million rollover, happy to let it go 18 months or two years without being repaid”.

Mr. Alger replied that if it was a condition of the loan that the money be repaid, then he would expect it to be met.

Asked if this was something the bank would “turn a blind eye to”, Mr. Alger replied: “No, we wouldn’t turn a blind eye to something like that.”

He agreed that such a delay would normally raise a red flag for the bank, but that he was “not close enough to the details” of the case. He said it was possible there was an error or oversight on the part of the bank, but repeated that he was unaware of such an error.


“There was no culture in the bank of people ignoring the conditions,” he said. “Errors can happen in any organization. I’m not saying an error happened, but they can happen.

Mr Kavanagh told Mr Alger that the bank had granted Mr Lynn the additional loan of 4.9 million euros “to straighten him out” and to “repair the unfulfilled condition”.

“I can’t answer that,” replied Mr. Alger.

Mr. Kavanagh also explained to Mr. Alger that “all senior managers [in the bank] were reluctant to come to court,” leading the prosecution to object that it was “totally inappropriate” and an “unsubstantiated allegation.”

Judge Martin Nolan reminded Mr Kavanagh that this was an adversarial court. “If you want to bring someone to justice, you can,” the judge said.

When asked by Judge Nolan if he disputed that the loan was authorized by the bank, Mr Kavanagh said no. “I dispute the circumstances under which the loan was granted,” he said.

Under re-examination by Karl Finnegan, prosecuting, Mr. Alger stated that the primary responsibility for meeting the terms of a loan rests with the borrower. “The borrower must first meet the conditions,” Alger said.

He said the bank was then responsible for ensuring that the conditions were met. “There was no culture in the bank where anyone turned a blind eye to the conditions,” he said.

Mr. Finnegan brought in Mr. Alger through an email between bank officials that the court has already seen.


In it, Ciaran Farrell, then manager of the Blanchardstown branch, told a commercial loans officer that Mr Lynn had told him that the delay in repaying the 1.9 million euro loan was due to a “confusion” in his office and that Mr. Lynn was “embarrassed and annoyed” about it.

Mr Alger said the email showed the bank was “absolutely not turning a blind eye” to the repayment of the loan. “It has been explained and the bank is happy to accept the borrower’s explanation as to why he failed to comply with the conditions,” he said.

The trial continues next week before Judge Nolan and a jury.


About Author

Comments are closed.