Page last updated at 11:02 GMT, Thursday, 26 November 2009

Bank sues ex-boss over 7m loan

Anglo Irish Bank branch
Anglo Irish Bank was nationalised in January

The Dublin-based bank Anglo Irish is suing its former chief executive David Drumm in an attempt to recover £8m euros (£7.2m) it lent to him.

Mr Drumm resigned last December when it emerged the bank had been keeping directors' loans secret from shareholders.

The bank was nationalised in January and has become a symbol for the decline of Ireland's "Celtic Tiger" economy.

Legal papers laying out claims against Mr Drumm were filed on Wednesday.

The bank has also issued joint proceedings against Mr Drumm and his wife Lorraine.

That legal action relates to a recent move by the couple to transfer property out of their joint names into Lorraine Drumm's alone.

That would put the property, which was used as a security on a loan to Mr Drumm, out of reach of the bank. The bank's proceedings are seeking to overturn that transfer.

The development comes after Ireland's Finance Minister Brian Lenihan said earlier this week that the bank would take legal proceedings against former directors over their borrowings.

Anglo reported the biggest loss in Irish corporate history this year when it made a loss of 4.1bn euros in the six months to March on the back of large impairments on its property loans to developers.

The bank has UK offices in Belfast, London, Birmingham, Leeds, Edinburgh, Glasgow and Newcastle.

The bank's current chief executive Mike Aynsley has asked consultants from KPMG to look at all options for the bank's future, including the winding down of the company.

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