Court hears former Anglo executive was ‘open and frank’ with regulator

A former Anglo Irish Bank executive accused of conspiracy to defraud was "open and frank" with the Financial Regulator because he didn't believe anything wrong had been done, a court has heard.

The trial of four former executives from Anglo Irish Bank and Irish Life & Permanent (ILP) for allegedly conspiring to mislead investors about the true health Anglo is now in its closing stages.

John Bowe (52) from Glasnevin, Dublin, Willie McAteer (65) of Greenrath, Tipperary Town, Co Tipperary, Denis Casey (56), from Raheny, Dublin, Peter Fitzpatrick (63) of Convent Lane, Portmarnock, Dublin have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors by setting up a €7.2 billion circular transaction scheme between March 1st and September 30th, 2008 to bolster Anglo's balance sheet.

On day 72, Diarmaid McGuinness SC, defending Anglo's former head of capital markets Mr Bowe, said that, in October 2008, his client openly discussed the billion-euro deal with Mary Elizabeth Donoghue in the Financial Regulator's office.

The jury have heard how Ms Donoghue asked Mr Bowe about the bank's end-of-year position on September 30th, 2008 and told him: "There have been some questions...in relation to the arrangement that you got involved with there with ILP. that it would bolster your position".

‘Snapshot’

Mr Bowe agreed with her and said “absolutely”, adding: “We are getting ourselves ready for the photo”.

The jury has heard the end-of-year balance sheet described as the “snapshot” or photo.

The evidence was that Mr Bowe told the financial regulator official: “Call it balance sheet dressing or window dressing or anything...our motive was not about liquidity.”

Ms Donoghue then suggests: “So it’d look like an asset manager had placed money with yourselves” and Mr Bowe replies, “Exactly”.

Ms Donoghue then tells Mr Bowe: “That’s fine, that’s grand”.

Counsel for Mr Bowe asked the jury: “Do you think that’s a confession to a conspiracy? Or is he explaining what the bank did? Because he understood what the bank did. They took in deposits. They had them accounted for.

“Ms Donoghue said, that’s what I thought it to be, let’s not get too excited about that.”

Open and frank

Mr McGuinness said his client was open and frank with the regulator because he didn’t think anything wrong had been done.

“How could you think if he was knowingly involved, and he intended to defraud people, he’d be prepared to go on the phone with the regulator and say this is what the bank did?” counsel said.

The trial continues before Judge Martin Nolan and a jury.