Monday 17 December 2018

'Walls have ears' - Drumm trial hears calls from bankers

Former Anglo CEO David Drumm leaves court. Photo: Collins Courts
Former Anglo CEO David Drumm leaves court. Photo: Collins Courts
Andrew Phelan

Andrew Phelan

Anglo Irish Bank and Irish Life and Permanent executives talked about disguising an inter-bank loan of €750m during the 2008 financial crisis, saying the "walls have ears".

A jury heard one banker said they had to keep the transaction as "tight as a duck's arse" because there were fears of what would happen if it got out to the market.

As the amounts agreed to be transferred between the two banks increased to €6bn, another executive said "you might as well be hung for a sheep as a lamb".

Phone calls between the bankers were being played back to the jury in the trial of Anglo's former CEO David Drumm (51). Mr Drumm is pleading not guilty to conspiring to defraud Anglo investors in 2008 by dishonestly creating the impression that the bank's deposits were €7.2bn 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 case centres on a series of circular billion-euro inter-bank transactions between Anglo and ILP, routed through ILP-owned Irish Life Assurance (ILA). The money was placed back in Anglo and treated as customer deposits, which are considered a better measure of a bank's strength. Mr Drumm admits he authorised the transactions but denies there was anything dishonest or fraudulent in them.

Mr Drumm was not involved in any of the phone calls played back to the jury yesterday. Giving evidence for a second day was Anglo's former treasury director Matt Cullen. Mr Cullen explained what was taking place in the conversations after the recordings were heard.

The first call was on March 25, 2008, between Anglo executives including Peter Fitzgerald, Mr Bowe, Mr Cullen and Ciaran McArdle. The next conversation was on March 27, between Mr McArdle, Paul Flynn from Bank of Ireland (BOI), another unidentified man from BOI and Mr Cullen.

"We want to put out there from everybody's point of view to show the best picture that we have," Mr Cullen said to Mr Flynn. In another call to an unidentified man in BOI on March 27, 2008, Mr Cullen said if "we set up and close that then we will be saying 'look, everything we have said is exactly bang on'". The trial continues.

Irish Independent

Editor's Choice

Also in Irish News