Sunday 25 September 2016

Financial regulator 'not looking' at €750m transaction between Anglo and Irish Life - former Anglo head claimed

Eimear Cotter

Published 29/01/2016 | 19:22

Left to right, William McAteer, Denis Casey, John Bowe, and Peter Fitzpatrick
Left to right, William McAteer, Denis Casey, John Bowe, and Peter Fitzpatrick

The financial regulator was "not looking" at a €750 million transaction between Anglo Irish Bank and Irish Life and Permanent which was to be reported in Anglo's half year figures as a corporate deposit, the former Head of Capital Markets at Anglo claimed.

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John Bowe (52) allegedly made the comments during a recorded conversation with Anglo's former Director of Treasury, Matt Cullen, in March 2008.

Mr Cullen was continuing to give evidence in the trial of former Anglo executives John Bowe, from Glasnevin, Dublin, and his Anglo colleague William McAteer (65), of Greenrath, Tipperary town, Co Tipperary; and former IL&P executives Denis Casey (56), of Raheny, and Peter Fitzpatrick (63), of Malahide, both Dublin.

They have denied conspiring to mislead existing and potential investors, lenders and depositors by engaging in transactions between Anglo, IL&P and Irish Life Assurance to make Anglo appear €7.2bn better off than it was.

The jury has begun listening to recordings of telephone conversations in Anglo's treasury department.

In one recording from March 25, 2008, Mr Cullen talks about a proposal to complete a "back to back" transaction with IL&P.

Former Anglo finance director Willie McAteer
Former Anglo finance director Willie McAteer
Former Anglo executive Denis Casey. Pic:Mark Condren
Former Anglo Irish head of capital markets John Bowe
Former director of finance of Irish Life and Permanent Peter Fitzpatrick. Photo: Courtpix

"Look, we will give them half a billion and they will give it back in the name of the asset manager", he said in the conference call which included Mr Bowe, among others.

Mr Cullen also suggests David Drumm should call IL&P and tell them the transaction is appreciated.

Mr Bowe is then recorded as saying: "Only issue we got to think about is from a regulator point of view, and the regulator is more or less, you know, saying I'm not looking".

In a second call between Mr Cullen and David Gantly, IL&P's Head of Corporate Treasury, on March 27, 2008, the jury heard Mr Gantly tell Mr Cullen "You put the stuff into us" and "we'll just put it straight back, through our other boys".

Mr Gantly, who was speaking prior to boarding a plane at London City Airport, tells Mr Cullen "I'm purposely not using names, the walls have ears in this climate".

The court also heard that the bank started calling "skittish" customers after the bank had "15 significant withdrawals in three days" following the so-called St Patrick's Day massacre when the bank's share price fell significantly.

The phone calls were to be made by the Irish bank's corporate funding desk in late March 2008, just days before Anglo was due to post its half-year results, and were revealed in a conference call played to the jury.

Mr Cullen spent Friday morning going through emails and other documents relating to a task team set up to explore funding initiatives for the bank's year end in September.

Between July and September 2008, a number of initiatives were being explored and this was to show "a strong customer number" at the end of the year, said Mr Cullen.

He was dealing with transactions between Anglo and IL&P, and originally, it was hoped to do a deal worth €3bn, which would be reported in Anglo's year end figures as a corporate deposit.

However, by September 16, there were only three potential funding initiatives remaining, €500 million from Merrill, €200 from 'repo' and the figure from IL&P had increased to €6bn. This figure had increased to €7bn by September 30.

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