Former liquidity manager with Irish Life and Permanent 'not told the purpose of circular transactions between ILP, Irish Life Assurance and Anglo Irish Bank', Anglo trial hears
Published 02/03/2016 | 18:10
A former liquidity manager with Irish Life and Permanent has said he was not told the purpose of circular transactions between ILP, Irish Life Assurance and Anglo Irish Bank in March 2008, the trial of four senior bankers has heard.
Paul Kane told Una Ni Raifeartaigh SC, prosecuting, that he had been instructed to transfer money from Anglo to Irish Life Assurance (ILA), which would in turn be placed back with Anglo.
Mr Kane said given that the transactions were occurring at Anglo's year end, he thought it was to “shore up any ratio or balance sheet”.
Four men, including Anglo's former Head of Finance, Willie McAteer (65) and John Bowe (52), who had been Anglo's head of capital markets are accused of conspiring to mislead investors by using interbank loans to make Anglo appear €7.2 billion more valuable than it was.
Peter Fitzpatrick (63), former director of finance at ILP of Convent Lane, Portmarnock; Dublin ILP's former CEO Denis Casey (56) from Raheny, Dublin; Mr McAteer of Greenrath, Tipperary Town, Co. Tipperary and Mr Bowe, from Glasnevin, Dublin have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors through financial transactions between March 1st and September 30th, 2008.
Today Ms Ni Raifeartaigh played recorded phone calls made to Mr Kane in March 2008 and asked him to comment on them.
Mr Kane said in the first call Anglo financial dealer Ciaran McArdle, a previous witness in the trial, was asking for the transfer of “a yard”, or €1 billion.
He told Ms Ni Raifeartaigh this was the first he had heard about the proposal and that he had never come across such a transaction structure before.
Mr Kane said Mr Fitzpatrick had approved of the transaction through an email, which was shown to the jury, and that his own boss had requested he keep information about it “tight”.
Another witness told the court that Anglo had made transactions in 2008 to show larger customer funding in its end of year reports.
Giving evidence via video link from London, former Anglo banker Stephen Fox said: “We were using our own money and receiving it back.”
He said the rationale for this was “to report larger customer funding at end of year”.
Mr Fox added that at the time he had been aware of transactions between Anglo and ILP but he didn't know any of the details and had assumed they were wholesale customer deposits.
He told Paul O'Higgins SC, prosecuting, that his role was to report actual customer funding to Anglo executives and officials, including Mr Whelan and Mr Bowe.
He explained that this was the actual corporate and retail deposits received from clients.
He told Mr O'Higgins that in March 2008 he would have noticed customer figures going “up and down” by clients leaving money and taking it out the next day.
The witness agreed with Diarmaid McGuinness SC, defending Mr Bowe, that “overnight money”, or money deposited for short periods, was common in banks.
He further agreed that he knew some of these overnight deposits had come in and gone out of Anglo after year's end.
The trial continues before Judge Martin Nolan and a jury.