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Was It Just The Common Folk, I Mean Equity Investors Who Got Hosed By The Bank of Ireland - Preferred Stock, & I Mean It!

Reggie Middleton's picture




 

Last week I shocked many with several revelations in the post What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors? Well, there's more to the Bank of Ireland story than evades the eye.

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 In relation to BoI; the CEO Richie Boucher in the Irish High Court on 5th of October 2012 swore on affidavit that BoI had assets of €155 billion. 

BoI Boucher1-1BoI Boucher1-1

His statement appears to ignore the existence of the charges that were clearly delineated and illustrated in my previous post - What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors?
Below is a sworn copy of the affidavit for Richie Boucher, the CEO of Bank of Ireland. This relates to reducing the Banks Regulatory capital by almost 4 Billion Euro which was shared amongst its preferential shareholders – at the expense of the common shareholders.

You will see he states that the bank has assets of almost 155 Billion Euro. The bank reported losses of 2.1 Billion euro last week.

BoI Boucher2BoI Boucher2

Although he states that the bank has assets of almost 155 Billion Euro, it recently reported losses of 2.1 Billion euro, which of course materially reduces capital. This loss had to be visible from within the bank for Citibank (amongst other analysts) had bearish views on the company. I doubt Citi knew something that the bank management didn't!

This bid to raise capital for dividend distribution in the face of apparent and expected losses (Citibank had a bearish outlook on the bank’s operations, as did the CEO himself) appears to fly in the face of prudent operation designed to keep the bank as an ongoing concern. Further investigation supports reason to question this action.

Citi analyst on BoI-144Citi analyst on BoI-144

The institutional bank investor Wilbur Ross bought preferred shares of BoI, and benefitted from a windfall payout as BoI successfully petitioned to reduce its regulatory share capital amongst current and impending losses that it was confident it would be taking.

 Wibur ross butphoto-145Wibur ross butphoto-145

Wilbur Ross, et. al. made off like bandits, with the Bank of Ireland common people shareholders left holding the bag with millions in losses. We calculate Mr. Ross pocketed over $600 million dollars for this 5 month or so trade - and with relatively very little out of pocket expense or risk. He still owns the preference shares, after all - and still got the cash as well! Touche' mister Ross, Touche'. As for the common shareholders nursing that 2.1 billion euro (roughly 4.5B dollar) losse, I say the same to you that the big US bankers said to their clients during the 2008 debacle - Muppets! See Goldman's take on Muppetology to get a firmer grasp on what I mean and how the US banks consider nearly all taxpayers muppets.

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I calculate the Bank of Ireland taking even more aggressive losses in the future. Why? Failure to mark to market means Irish banks are carrying loans whose true saleable value are roughly 27% of book value. This literally means insolvency for many – and that’s without the recognition of the various charge issues illustrated within. I have documentation to back this up as well and will delve into it in a future post. In the meantime, review my previous posts on the topic or subscribe to download some of the speficic charge documents contained in the posts herein.

 Other hard hitting pieces on the resurgent EU banking crisis

 

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Fri, 04/26/2013 - 06:29 | 3501547 Shevva
Shevva's picture

I had a dream last night of a world economy without bankers, it was bliss.

Fri, 04/26/2013 - 06:28 | 3501552 Bearwagon
Bearwagon's picture

"I have a dream!" ...

Thu, 04/25/2013 - 20:48 | 3500633 slightlyskeptical
slightlyskeptical's picture

So the common shareholders got screwed in order to make the preferred shareholders whole.

Not sure what I am missing here as isn't that the way it is suppose to be? Or did secured holders get the shaft from the from the preferreds as well.

I have no doubt these entities are fraudulent, but wouldn't the shares be worthless either way?

Thu, 04/25/2013 - 19:18 | 3500242 Whiner
Whiner's picture

Yes, the blessed Irish will starve again. Who will plead their cause? Bankers? No. Politicians. No. God in Heaven Above? Aye! A horrible judgment to be visited on the others.

Thu, 04/25/2013 - 19:15 | 3500231 kenny500c
kenny500c's picture

"...2.1 billion euro (roughly 4.5B dollar) losse..."

Huh? Guess it depends what you mean by "roughly."


Thu, 04/25/2013 - 18:49 | 3500133 W T F II
W T F II's picture

We'll pay 'em in Malarkey...it's as good as gold...

ps. Reggie, you'll know you've gotten somewhere with this when CNBC cites your expose as the reason the S+P tanked

Thu, 04/25/2013 - 17:57 | 3499879 LuchadorChumba
LuchadorChumba's picture

Oye Reggie and oooooh so innocent 'common folk', many of the ZH luchadors and luchadettes are biting their nails over concerns about how your well intentioned, but nonetheless stolen booty will be divied up, now that there’s new reflections of mas fuerte luchadors climbing into the ring. You think that you can ride the capes of major luchadors and not eventually become a victim yourself? There can be only one top goat! Let us for a moment contemplate how you convince yourselves you have not been parasites!

What the ‘aware’ have been calling ‘reality’ in the luchadors temporal realm is NOT reality. Perception es todos, and your attention, which is controlled by my language and media, instruct you how to think. I create the ring which limits los palabras (the words) that your thoughts are constructed. The ‘fundamentality’ of su ‘Fundamentals’ are nada but alleged subroutines swirling in su cabesas, embedded y unquestioned as ‘real’. That’s why ‘nothing’ happens, and nothing will happen until the ‘Wills’ that you have given your power to decide it’s time to change your perception uno mas vez. I make the rules of the ring, and you never questioned until now? I print the money, I made gold a pseudo-spiritual tool which has no more intrinsic value than fiat$. Aye aye aye…I can purchase your soul with fiat AND gold! Look at you scrambling! Only a few of me fav luchadors can sit at my right hand, for if you wondering where all the gold went, you need to look no further than my wonderous gold belt pendejos.  

But don’t worry amigos, this ‘part’ of the game is almost over. I promise the pain will be exquisite.

I've got a big trick up my chonies for you.

Viva El Luchador!

www.askchumba.com

Thu, 04/25/2013 - 17:44 | 3499821 neutrinoman
neutrinoman's picture

How do you say "muppet" in Irish?

Thu, 04/25/2013 - 20:57 | 3500664 HeavyShadow
HeavyShadow's picture

Moopet

Thu, 04/25/2013 - 17:44 | 3499819 RMolineaux
RMolineaux's picture

Reggie  -  Can you tell us something about the effect of these events on the credit default swap market?

Thu, 04/25/2013 - 17:22 | 3499713 sunstreaker
sunstreaker's picture

The Financial Stability Board (FSB) develops the policy makers’ strategic response to the banking crisis and directs its implementation: http://www.financialstabilityboard.org/

 

The FSB Plenary is comprised of the most senior representatives from Central Banks, Finance Ministries as well as from the main international bodies governing finance (FSB’s current chairman is Mark Carney, his predecessor Mario Draghi):

http://www.financialstabilityboard.org/about/plenary.pdf

 

The FSB developed the so-called Bail-In. The main working paper is “Key Attributes of Effective Resolution Regimes for Financial Institutions.” It is candid and succinct:

http://www.financialstabilityboard.org/publications/r_111104cc.pdf

 

Equally to the point is the progress report, “Resolution of Systemically Important Financial Institutions,” from November 1st, 2012; it leaves no doubt that the Bail-In is indeed a template for many jurisdictions, amongst others those of the US and the EU:

http://www.financialstabilityboard.org/publications/r_121031aa.pdf

 

Please take a moment to browse the files contained in the links. Please spread the news.

 

I urge Zerohedge to write its own report.

 

 

Thu, 04/25/2013 - 16:42 | 3499545 Vegetius
Vegetius's picture

Good to see you are deconstructing the great EU success story. According to the EU elite Ireland is a poster boy Reggie and its wrong of you to say the King has no clothes on, of course they also said that the banks were and are stress tested so no worries.

As I post on an earlier one of your Irish bank collapse articles its -

"Chickens coming home to Roost"

- Malcom X

 

And I think that you are on the money on this one as well Reggie proving that

"In the kingdom of the blind, the one-eyed man is king"

Erasmus

Thu, 04/25/2013 - 16:41 | 3499509 THE DORK OF CORK
THE DORK OF CORK's picture

 

Now that Europe seems to be in real trouble they will bring out those pro Euro left wing liberal leprechauns to give the dark project a veneer of intellectual respectability amongst the left and thus take the harsh Christian democrat light off this demonic construct.

A real president of Ireland would ignore this false forum.
Higgens was / is very much inside this new club.

http://www.youtube.com/watch?v=-PFu1Vj2_GY  (no need to watch all of this video if you value your time on this Earth)

As Beppe Grillo said about this horrible elite.
They meet over quiet weekends of vomit.

All politicians which brought us inside this dastardly trap have no credit now.

 

Thu, 04/25/2013 - 16:13 | 3499427 shovelhead
shovelhead's picture

Lucky Charms... now with 73% more turds in every box.

Free Muppet mask on back.

Thu, 04/25/2013 - 15:43 | 3499294 jeffgroove102
jeffgroove102's picture

Time to sell gold now! Remember, in the current finance world, up is down, down is up, 2 + 2 = 5, and ur banker does not want to miss his bonus.

Thu, 04/25/2013 - 15:12 | 3499149 beastie
beastie's picture

Ireland perfected the nod and the wink in politics and it seems to serve well in banking. Most Irish people have in the past had a grudging admiration for rebels and schemers. Usually becasue they were indirectly effected by it or not effected at all.

Most Irish politicians can be forgiven almost anything from outright theft (google Charlie Haughey) to worse using political pressure tring to get their boyfriends off the hook on charges of Paedophilia (  the senator wrote to the Israeli authorities on senate notepaper appealing for clemency over the conviction of his former lover, Ezra Yizhak, for having sex with a 15-year-old boy.) "After his holiday and his stunning re-entry into the race – made possible when he gained the support of four local councils, one hurdle a candidate must leap before being allowed on the ballot paper – the scandals started again. It has been reported that Norris drank too much, that his eyesight was deteriorating and that he claimed disability benefit for 16 years while working in the senate." Christ on a crutch the guy would not last five minutes in American politics.

However, most are feeling the pain now of banking lies and theft and there is not so much of the "good on ya" or the "accch, I'd do the same meself" or the run amok political correctness associated with the article linked above which allowed that scumbag to almost become the president of Ireland with "ah, God love him the poor fecker is gay" or the I'm so progessive I'm still voting for him crowd.

 

Times are a changin' becasue EVERYONE bar the bankers and politicians are feeling the pain. 

Keep it up Reggie becasue once the Irish get pissed off enough it won't be "Ah, god love him" or "feck it" it'll be "wheres the feckin' pressure cooker". BTW there was some bullshit in the the Irish Times last week saying deposits were up. Nothing to see here folks

Thu, 04/25/2013 - 21:05 | 3500684 HeavyShadow
HeavyShadow's picture

Living in dublin for 8 yrs now. Waiting for the apathy to wear off. And if and when it does, I'm imagining something very much other than the keeping face I'm seeing now. 

Thu, 04/25/2013 - 23:40 | 3501192 Unique Snowflake
Unique Snowflake's picture

Spread the word brother. Teach them to grow a ball or two. To stand up(requires a spine) to their gutless politicians and throw the bankers out.

Thu, 04/25/2013 - 16:36 | 3499524 Abrick
Abrick's picture

I guess you never heard of Barney Frank.

Thu, 04/25/2013 - 18:07 | 3499934 beastie
beastie's picture

Yeah but Barney is just gay and a moron. This animal supports paedophiles and claimed disbility for 16 years while he was a senator.

Thu, 04/25/2013 - 14:22 | 3498884 maskone909
maskone909's picture

keep fighting the good fight reggie

Thu, 04/25/2013 - 14:20 | 3498876 Wipewithpaper
Wipewithpaper's picture

Ross got the Meat, the Irish people the Potatoes.

 

Thu, 04/25/2013 - 14:35 | 3498949 Doubleguns
Doubleguns's picture

Even if it was horse meat. 

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