Tuesday 17 July 2018

Drumm: watchdogs knew what bosses were doing

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

Andrew Phelan

Anglo Irish Bank's former CEO David Drumm said after the bailout that the Financial Regulator and Central Bank were "fully aware of what we were doing" and he would "go public if they deny it to try to protect themselves," a court heard.

In an e-mail to another senior banker, Mr Drumm also said Anglo had been "encouraged" to engage with other banks to create liquidity during the financial crisis.

The e-mail was shown to the jury during the trial of Mr Drumm, who is accused of taking part in a €7.2bn conspiracy to defraud.

Mr Drumm (51) is pleading not guilty to conspiring to defraud Anglo investors in 2008 by dishonestly creating the impression that the bank's customer deposits were larger than they were.

He is alleged to have conspired with former Anglo officials Willie McAteer and John Bowe, as well as then-CEO of Irish Life and Permanent (ILP) Denis Casey and others.

Mr Drumm also denies false accounting, by providing misleading information to the market.

The email was shown to the jury as Gary McGann, a former non-executive director of the bank and chair of the audit committee, was giving evidence in Dublin.

The Circuit Criminal Court heard it was sent to Matt Moran, Anglo's former chief financial officer on January 14, 2009, after Mr Drumm had left Anglo. The subject of the mail was "Balance Sheet Management."

The court also heard about meetings with the Irish Financial Services Regulatory Authority (IFSRA) and Central Bank.

"Willie (McAteer) informed Con (Horan, IFSRA) that we would be doing some balance sheet management over the year end," Mr Drumm said. "He mentioned taking in some short-term deposits."

Mr Drumm said he "told them the two big boys wouldn't help us" but that they had an "excellent relationship with ILP and they were helping us out."

He added: "I would relish the opportunity to sit in front of Con and ask him to tell me to my face that he didn't know about this."

IFSRA and the Central Bank were "fully aware of what we doing to protect ourselves."

"I'll go public if they deny it and try to protect themselves," he added.

In cross-examination, Mr McGann told Locan Staines BL, defending, that it was "difficult to conjure up" how fraught the time was.

It had felt like "the world was never going to be the same again," he said.

The trial continues.

Irish Independent

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