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Sunday 23 October 2016

Bank bosses discussed 'disguising' loan of €750m in smaller amounts, trial hears

Declan Brennan

Published 30/01/2016 | 02:30

Former Irish Life and Permanent Chief Executive Denis Casey. Photo: Collins Courts
Former Irish Life and Permanent Chief Executive Denis Casey. Photo: Collins Courts
Willie McAteer. Photo: Collins Courts
Peter Fitzpatrick. Photo: Collins Courts.
John Bowe. Photo: Collins Courts

Anglo Irish Bank management discussed disguising short-terms loans of €750m from Irish Life and Permanent (ILP) and keeping them "tight as a duck's a***", the trial of former banking executives has heard.

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The four men, including former ILP CEO Denis Casey and former Anglo Head of Finance Willie McAteer, are accused of conspiring to mislead investors by using interbank loans to make Anglo appear €7.2bn more valuable than it was.

Mr McAteer (65), of Greenrath, Tipperary Town, Co Tipperary, and Mr Casey (56), from Raheny, Dublin, are on trial alongside Peter Fitzpatrick (63), from Malahide, Dublin, who had been IL&P's former director of finance, and John Bowe (52), from Glasnevin in Dublin, who had been Anglo's head of capital markets.

They have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors through financial transactions to make the bank appear €7.2bn more valuable that it was between March 1 and September 30, 2008 in Dublin.

On day eight of the trial, the jury heard recordings of telephone calls made between staff at Anglo and ILP in 2008.

The interbank loans allegedly involved money being transferred by Anglo to ILP and then being put back on deposit with Anglo by their life insurance division, Irish Life Assurance. This would make it look as if Anglo had received large corporate deposits by the time it had to report its year-end figures on September 30, 2008.

The jury heard Mr Bowe told a conference call with Anglo executives in March 2008, when a similar type of transaction was being discussed in relation to the bank's half-year figures, that the only issue they had to think about was from a regulatory point of view. He said: "And the regulator is more or less saying, 'Look, I'm not looking'."

In another call on March 27, Matt Cullen, a former director of treasury at Anglo, and his counterpart in ILP, David Gantly, discussed the details of the March transactions. Mr Bowe was also on this call.

Mr Gantly told Mr Cullen: "You put the stuff into us and we put it straight back through our other boys. You just need an overnight transaction through month-end, correct".

The court heard "the other boys" referred to Irish Life Assurance.

Mr Gantly said he was purposely not using names because, he said "the walls have ears in this climate". He later suggested it would be better to break the €750m figure into smaller transactions because "it might look better to disguise it somewhat, you know?".

Mr Cullen, who is still giving evidence in the trial, told the court if details of the transaction got out it would affect confidence in the market so the idea was to "keep it tight inside in their own bank".

Mr Gantly added later on the same call: "I can vouch for my own people, I know because of them, you have to be tight as a duck's a*** here".

In a phone call in September 2008, Mr Bowe told Mr Cullen the bank's expectations for the year end accounts, that month, were very negative.

He said the bank's figure for customer deposits was "about four billion less" than it needed to be.

The trial before Judge Martin Nolan and a jury will continue next week.

Irish Independent

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