Thursday 13 December 2018

Anglo deals were 'funny stuff' to the bankers, court told

Former CEO of Anglo Irish Bank, David Drumm pictured arriving at the Dublin Circuit Criminal Court. Photo: Collins Courts
Former CEO of Anglo Irish Bank, David Drumm pictured arriving at the Dublin Circuit Criminal Court. Photo: Collins Courts
Andrew Phelan

Andrew Phelan

Anglo Irish Bank officials described transactions being carried out at the height of the financial crisis as "funny stuff", a court heard.

In phone conversations recorded in 2008, bankers also referred to "rinky dink" figures and making the balance sheet looking "aesthetically as well as it can".

The tapes were played yesterday in the trial of Anglo's former CEO David Drumm. Mr Drumm (51) has pleaded 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.

The case centres on a series of interbank loans which circulated between Anglo and ILP in September 2008. The transfers were routed through Irish Life Assurance, returning to Anglo where they were then treated as customer deposits.

Mr Drumm also denies false accounting, by providing misleading information to the market. Anglo's former head of liquidity Ciaran McArdle was giving evidence and the jury was played tapes of phone conversations he had between March and October in 2008. Mr Drumm was not on any of the calls.

On March 26, Anglo's liquidity risk manager Stephen Hiles told Mr McArdle about a meeting in the bank about customer funding.

There was a question of "how do we get it up to €4bn" and Mr Hiles said: "They're looking at more reporting ways of how to get it there."

Mr McArdle called David Fagg in Royal Bank of Scotland in March 2008 and said he was looking to do "a back to back" over March 31 so "aesthetically, the balance sheet looks as well as it can".

The jury heard calls between Mr McArdle and Paul Kane, his counterpart in ILP, on March 28, 2008. "I'm giving you a yard," Mr McArdle said. "I'm giving it back to you," Mr Kane replied.

Mr McArdle told Mary Rose Gearty SC, prosecuting, a "yard" was "terminology for a billion".

On the same day, ILP's David Gantly told Mr McArdle "we are approved to do", adding that "tight as a duck's a**e in this environment is kind of key".

"All focused on corporate numbers, seeing what we can do, seeing what we can't do to get the number as accurate as we can," Mr McArdle told Mr Hiles in another call that day. "I was going to say when did accurate ever come into it," Mr Hiles replied.

"Whether it's total rinky dink or not, they just seem to be more relieved that at least they're discussing what the number should be or not," Mr McArdle told Mr Hiles.

On September 25, Mr McArdle discussed a transaction with Mr Kane. "I know I can't do f***ing six yards' worth of funny stuff," Mr McArdle said.

The trial continues.

Irish Independent

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