Business Irish

Saturday 16 December 2017

Drumm agrees to be quizzed by Anglo in Boston

Shane Phelan Investigative Correspondent

EX-ANGLO Irish Bank boss David Drumm will finally be forced to answer questions under oath about his personal wealth and his role in the bank's downfall, it emerged last night.

Lawyers for Mr Drumm (44) said he had agreed to be quizzed by his former employers as part of bankruptcy proceedings in the US.

The move followed intense negotiations at a courthouse in Boston yesterday.

Mr Drumm, who has refused to return to Ireland to be interviewed by gardai about major irregularities at Anglo, will now face questions from lawyers about his role in the downfall of the bank.

Lawyers for Anglo said Drumm would be asked if he was involved in any "breaches of fiduciary duty", meaning failures to meet his legal or ethical obligations while running the bank.

The development is significant as, until now, the former chief executive has largely escaped efforts to get him to account for his role in the bank's spectacular fall from grace.

He fled Ireland for the US two years ago after the first in a series of scandals surrounding Anglo began to emerge.

Gardai and officials from the Office of the Director of Corporate Enforcement were anxious for Mr Drumm to return home to co-operate with inquiries into the running of the bank, but so far he had refused to do so.

Mr Drumm had also previously opposed efforts by Anglo to force him to answer questions.

Bankruptcy

The bank has raised serious doubts over the accuracy of financial information he supplied to the US courts as part of his bankruptcy petition.

However, Mr Drumm relented following talks yesterday.

The former chief executive did not attend the discussions at the JW McCormack Courthouse in Boston personally and left negotiations to his legal team, led by lawyer Stewart Grossman.

Ken Leonetti, a Boston-based lawyer representing Anglo, said afterwards: "We have a deal."

As part of the agreement, Mr Drumm will be questioned in two sessions.

The first session of questions will be conducted next Tuesday by bankruptcy trustee Kathleen Dwyer, who will ask Mr Drumm about property and assets he still holds.

Lawyers for Anglo will then get an opportunity to quiz him in a second session in the New Year.

As part of the deal Anglo agreed it would drop its attempts to have Ms Dwyer removed as trustee. The bank had sought to have her replaced after she sided with Mr Drumm on a number of legal matters.

Mr Drumm is currently living in a $2m (€1.4m) home on the outskirts of Boston, which was purchased through a trust earlier this year. He also co-owns a $4.6m (€3.28m) mansion in Chatham on Cape Cod.

A €2m house in Malahide, Co Dublin, was placed into his wife's name last year.

The former banker filed for bankruptcy in October, with debts of €10.26m. Anglo is his largest creditor. The bank is owed €8.5m.

The former banker could face serious sanctions if it can be proven he provided false information to the bankruptcy court.

The penalty for making a false bankruptcy statement is a fine of up to $500,000 (€367,000) and/or up to five years in prison.

Irish Independent

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