'€7.2bn interbank loans were shock to me' - ex-Anglo chair
A former Anglo Irish Bank senior official has said it was a "shock" to him when he found out the details of the €7.2bn interbank loans that are now at the centre of an alleged conspiracy to defraud.
Donal O'Connor, who was a director of Anglo at the time the cash transfers were happening, told a jury he only became aware of their "round the houses" nature after he took over as chairman.
Mr O'Connor denied that he received documents outlining the transactions with Irish Life and Permanent (ILP) a month before his appointment.
He was giving evidence at Dublin Circuit Criminal Court in the fraud trial of Anglo's former CEO David Drumm.
Mr Drumm (51) is pleading not guilty to conspiring to defraud Anglo investors by dishonestly creating the impression that the bank's customer deposits were €7.2bn larger than they were.
He is alleged to have conspired with Anglo's former finance director Willie McAteer and head of capital markets John Bowe, as well as then-CEO of ILP Denis Casey, and others.
The case centres on a series of interbank loans which circulated between Anglo and ILP in September 2008.
Mr Drumm also denies false accounting, by providing misleading information to the market.
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The jury heard that, in 2008, Mr O'Connor was a non executive director and a member of the audit committee at Anglo before becoming chairman on December 18, following the resignation of Sean FitzPatrick.
He told Mary Rose Gearty SC, prosecuting, he made a conference call from Sydney, Australia, to a November 18, 2008, audit committee meeting.
He remembered he had the agenda "but I didn't have any other papers and when the meeting started there was a reference to papers being distributed".
Mr O'Connor said his attention was later drawn to emails sent with these papers attached "but I didn't have them or receive them".
They were sent to a PWC administrative assistant who printed out the agenda and gave it to him, but did not give him any additional papers, he said.
He recalled near the end of the meeting Colin Golden [head of group finance] started to talk and made reference to Irish Life.
"As is my wont, I interrupted, butted in, when I heard him talk and said 'Is that window dressing?'"
He recalled Mr Golden mentioning a figure of €7.2bn, and that he "said enough to pique my concern".
Willie McAteer then "immediately stepped in" and said it was "normal balance sheet management", Mr O'Connor said.
The financial regulator and auditor were mentioned.
"I got the impression that this had been cleared, that they had been taken through, there was no issue," Mr O'Connor said.
"My mind was immediately put at ease," he said and he did not think any more about it until "after I became chairman and things began to unfold".
He said he became aware of what he called the "round the houses issue" at a meeting on January 13, 2009.
Mr O'Connor was shown emails between a member of the company secretary's department and Bonnie Cunningham, a meetings planner.
Ms Cunningham was asked if she received the documents emailed to her for Mr O'Connor in advance of the November 18, 2008, audit committee meeting.
Ms Cunningham replied: "Yes, all set. Donal received all. Thank you."
"As I said, I didn't receive them," Mr O'Connor told the jury.
"You were happy to proceed without them," Mr Grehan said.
"Well, I did proceed without them," Mr O'Connor replied.
"I certainly didn't know the detail of the transaction because when I found out on January 13 it was a shock," he said.
The trial continues.