Sunday 24 June 2018

David Drumm said Anglo was 'still f***ed' despite assurances bank would be 'looked after', court hears

Former CEO of Anglo Irish Bank, David Drumm Picture: Collins
Former CEO of Anglo Irish Bank, David Drumm Picture: Collins

Sarah-Jane Murphy

Former Anglo Irish Bank CEO David Drumm said the bank was “still f***ed” despite “Mr F***ing Denis” of Irish Life and Permanent telling him Anglo would be “looked after”, his trial has heard.

He made the remark during a recorded phone call with John Bowe, former Director of Treasury at the bank, on September 22 2008.

Denis Casey was the chief executive of Irish Life and Permanent at the time at which the phonecall took place.

Today Dublin Circuit Criminal Court heard recordings of eight phone calls between employees of Anglo, the Central Bank and McCann Fitzgerald Solicitors, all of which took place on dates in late September 2008.

Six of the eight calls, played for the jury by Detective Sergeant Michael McKenna of the Garda National Economic Crime Unit, were conversations between Mr Drumm (51) and John Bowe.

Paul O'Higgins SC, prosecuting, said the calls were deliberately recorded by the bank for business purposes, to preserve the details of transactions and deals. They were recovered during the Garda investigation at the bank.

In a phone call on September 22 Mr Drumm and Mr Bowe discussed the fact that “€500m went out the doors today.”

Mr Drumm suggested Mr Bowe do “a Ladybird type thing” when he made a presentation at an upcoming meeting and said a simplified version of Anglo's cash flow would be needed.

Mr Drumm said “Mr f***ing Dennis” had confirmed that morning that Anglo will be “well looked after.”

Mr Bowe commented that Anglo was still in a hole, to which Mr Drumm responded that they were “f***ed”, needed to fix the balance sheet by year end and said their liquidity had depleted by €14bn.

“And who was in charge when that was going on,” Mr Drumm asked, to the sound of laughter from the two men.

Mr Drumm asked Mr Bowe if they could bloat the balance sheet, and remarked that “the family photo”, Anglo's end of year financial snapshot, “should it be published on f***ing Bebo” was not going to look good.

The two bankers then discussed the September transactions with ILP, which Mr Bowe said were booked as a “repo” and had “a small amount of haircut.”

“We're going to have to tell board members that we have lit a fuse here that's not going to go away, we'll have a difficult story to tell on December 3,” Mr Drumm said.

The jury then listened to three phone calls that took place on September 29 2008 between Mr Drumm, Mr Bowe and other Anglo executives.

Mr Bowe explained the transactions with ILP to Mr Drumm: “What happens is the money goes around in a circle. The dance here is that we actually get it back in time. It has to go through a lot of different hands.”

Mr Bowe told Mr Drumm that “Permo” wanted collateral for future deals and said that recovering the money lent to ILP within time limits was becoming “very very tough”.

Mr Drumm said “a f***ing journal entry would do it an awful lot quicker.”

Laughter is heard when Mr Drumm said Anglo Finance director Willie McAteer “might be auditing the books. Debit the giver, credit the receiver,” he joked.

In another recorded conversation he referred to the financial regulator as “Freddie f***ing Fly” and said he intended to go to “that f***ing shower of clowns down in Dame Street,” to look for emergency funding for the bank.

Mr Drumm, with an address in Skerries, Co Dublin, has pleaded not guilty to conspiring with former bank officials Denis Casey, William McAteer, John Bowe and others to defraud depositors and investors at Anglo by “dishonestly” creating the impression that deposits in 2008 were €7.2 billion larger than they were.

He has also pleaded not guilty to false accounting on December 3, 2008, by furnishing information to the market that Anglo's 2008 deposits were €7.2 billion larger than they were.

The jury has been told that Mr Drumm accepts the facts of the 2008 transactions between Anglo and ILP but he disputes they were fraudulent or dishonest.

The trial, now in its fourth week, continues before Judge Karen O'Connor and a jury of ten men and four women after losing a juror on day 26.

Online Editors

Editor's Choice

Also in Irish News