Wednesday 21 March 2018

Drumm's safe haven in the US could be under threat

PRESSURE: David Drumm
PRESSURE: David Drumm

RONALD QUINLAN Special Correspondent

FORMER Anglo Irish Bank CEO David Drumm's safe haven in the United States could be under threat.

This comes amid a call on Finance Minister Michael Noonan to seek the assistance of powerful US stock market watchdog, the Securities and Exchange Commission (SEC), to probe the bank's activities in the period leading up to the 2008 crash. Anglo Irish Bank sought to raise $10bn in fresh funding off the back of a medium-term bond offering in July 2008.

While the bond itself was not made available for purchase by US citizens, it was offered to qualified institutional investors through an investment prospectus filed with the Washington DC-based SEC on July 17, 2008.

In the course of the prospectus, Anglo Irish Bank provided potential investors in the bond with financial information drawn from both its 2007 annual report and unaudited figures for the period leading up to March 31, 2008.

In a note accompanying the numbers, the bank stated specifically that the information contained in its prospectus was "in accordance with the facts" and did "not omit anything likely to affect the import of such information".

That declaration and the figures provided by the bank are now open to question in light of damning revelations about the bank's activities contained in the notorious Anglo tapes published by the Irish Independent and Sunday Independent in recent weeks.

Fianna Fail finance spokesman Michael McGrath last night called on Mr Noonan to ask the SEC to investigate the bank's activities.

"Looking at it in the light of all the information that has come into the public domain, questions do need to be asked about the quality of the information Anglo provided in the investment prospectus it produced in the summer of 2008 as it tried to shore up its position. It is immaterial whether or not the bank actually managed to raise the funding," Mr McGrath told the Sunday Independent.

And as we now know from last week's revelations in the Irish Independent, by November 2007, two of the bank's most senior officers were already talking about finding an international analyst to try to put a positive spin on Anglo's rapidly declining finances.

Mr McGrath added: "Given that Anglo Irish Bank filed the prospectus for its $10bn bond in the United States in July 2008, I would ask the Finance Minister Michael Noonan to make contact with the SEC to explore the possibility of an investigation now being initiated in the US. If Mr Drumm cannot be compelled to return here, perhaps he can be called to account in his new home. Such an investigation could be facilitated by our own Office of the Director of Corporate Enforcement (ODCE) given the powers it has under the companies acts to work in co-operation with overseas regulatory authorities. The SEC also enjoys this power."

Irish Independent

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