Wednesday 28 September 2016

Massaging of results followed the 'St Patrick's Day massacre', court is told

Published 21/01/2016 | 02:30

Anglo defendant Denis Casey. Photo Courtpix
Anglo defendant Denis Casey. Photo Courtpix
Anglo defendant William McAteer. Photo: Courtpix
Anglo defendant John Bowe. Photo: Collins Courts
Anglo defendant Peter Fitzpatrick

'The banks don't see money the way that we see money," explained lead prosecutor Paul O'Higgins.

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The Senior Counsel made what might seem like a statement of the obvious as he opened the trial of four former bankers accused of conspiring in an artificial and "manifestly dishonest" scheme.

It is a scheme the State says was designed to make the former Anglo Irish Bank appear more valuable than it actually was - to the tune of some €7.2bn - by its year end on September 30, 2008.

The four, including the bank's former group head of finance, Willie McAteer, and the former CEO of Irish Life and Permanent (IL&P), Denis Casey, deny being involved in a scheme described by Mr O'Higgins as "one large candyfloss whose only conceivable purpose was to puff up Anglo's deposits to mislead those looking at its year-end figures and induce people dealing with Anglo not to change their behaviour".

Mr O'Higgins told the jury of 15 that he supposed Anglo Irish Bank was something that "everyone in Ireland has heard of". The name 'Anglo' resonated with two rows of earnest, transition-year schoolgirls, some of whom nodded their heads furiously in agreement. All of them would have been aged seven or eight on the night of the bank guarantee in 2008.

Matt Cullen, a former senior manager in Anglo's treasury department, recalled how it was just a "very busy bank growing at a substantial pace" when he joined it in 2003. By March 24, 2008, days after the "St Patrick's Day Massacre" on Anglo's shares, he said strong pressure came to bear within Anglo to "show a strong corporate number" when it produced its half-year results at the end of March.

That pressure led to a call or series of unrecorded calls on mobile phones between Mr Cullen and David Gantly - then treasurer of IL&P - in which IL&P was asked by Mr Cullen to assist Anglo on the corporate side.

The "back to back" idea came from a "brainstorming session" within Anglo, said Mr Cullen, who added that he was not involved its day-to-day execution.

The idea was that Anglo would place €750m as an interbank loan with IL&P, which then returned the sum to Anglo in the form of a corporate deposit from Irish Life Assurance (ILA), a non-banking subsidiary owned and managed by IL&P.

The jury heard that as funding initiatives fell away, IL&P also took part in "a back-to-back" transaction with Anglo at its half-year end in June 2008.

By September, said Mr Cullen, Anglo was seeking €6bn or €7bn from IL&P, which Mr Cullen says IL&P agreed to - if Anglo did the same for IL&P at its year end that December.

The trial continues.

Irish Independent

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