Monday 19 March 2018

Anglo trial told Finance chief intervened in bankers' 'spat'

Kevin Cardiff: intervention. Photo: Tom Burke
Kevin Cardiff: intervention. Photo: Tom Burke

Declan Brennan

Former Secretary General of the Department of Finance Kevin Cardiff contacted Irish Life and Permanent in 2009 about the way the bank was treating an allegedly circular transaction of €7.2bn in their accounts, the trial of four bankers has heard.

Denis Casey (56), the former CEO of Irish Life and Permanent (ILP), told gardaí the intervention from Mr Cardiff came in the wake of efforts by bankers at Anglo Irish Bank to have ILP treat the transaction differently in their accounts.

He said Mr Cardiff concluded the matter was a "spat" which should be sorted out between ILP and Anglo.

Mr Casey and three other former banking executives are on trial at Dublin Circuit Criminal Court accused of conspiring to mislead investors by using interbank loans to manipulate Anglo Irish Bank's balance sheets in 2008.

At the start of week 10 in the trial Matt Moran, Anglo's chief financial officer at the time, came under cross-examination from lawyers for Mr Casey and ILP's former director of finance Peter Fitzpatrick (63).

Mr Casey from Raheny, Dublin; Mr Fitzpatrick of Convent Lane, Portmarnock, Dublin; and former Anglo bankers John Bowe (52) from Glasnevin, Dublin, and Willie McAteer (65) of Greenrath, Tipperary town, Co Tipperary, have all pleaded not guilty to conspiring together and with others to mislead investors through financial transactions between March 1 and September 30, 2008.

The interbank loans allegedly involved a circular transfer of billions of euro by Anglo to ILP and back to Anglo via ILP's life assurance division.

The deposits would appear as a corporate deposit on Anglo's balance sheet, allegedly bolstering their corporate funding figure for the end of year accounts.

Michael O'Higgins SC, defending Mr Casey, showed the jury an excerpt from his client's garda interviews in which he told investigators that Anglo had misrepresented the €7.2bn transactions. He said he had insisted the placements from Irish Life would be "collateralised", meaning they would be secured against the cash deposits placed by Anglo with ILP.

He told gardaí: "Their objective was to bolster their deposits. My insistence...[was] that any transaction with Anglo be fully collateralised. Anglo did this by misrepresenting the transactions entered into with ILP as a non-collateralised transaction."

He said that after he resigned his position in February 2009, three phone-calls were made to change the accounting treatment of the transactions in ILP records to show it as a non-collateralised transaction.

The first of these, he said, came from Mr Moran. Another call was made from Donal O'Connor, who was chairman of the bank at that point.

He said these requests were rejected and following that, Mr Cardiff contacted ILP "enquiring about the accounting treatment for the transaction and concluding that it was a 'spat' which should be sorted out between ILP and Anglo".

Irish Independent

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