Regulator told not to ‘read too much’ into €7.2bn transaction, Drumm trial hears

Recorded calls show Anglo Irish Bank wanted to manipulate balance sheet at end of year

The trial of former Anglo Irish Bank chief executive David Drumm on a conspiracy to defraud charge is now  in its sixth week. Photograph: Aidan Crawley

The trial of former Anglo Irish Bank chief executive David Drumm on a conspiracy to defraud charge is now in its sixth week. Photograph: Aidan Crawley

 

A former senior Anglo Irish Bank official told the financial regulator not to “read too much” into a €7.2 billion end-of-month transaction with Irish Life and Permanent

Former head of liquidity Ciarán McArdle said Anglo was “trying to manipulate their balance sheet for their end-of-year accounts” and the sum was “not a real number”.

In a recorded phone call, on October 1st, 2008, Mr McArdle told the regulator the transaction with ILP “just happened” to fall on the last day of the month.

The jury heard extracts of the call between Mr McArdle and Claire Taylor, an officer at the financial regulator, on day 40 of David Drumm’s conspiracy to defraud trial at Dublin Circuit Criminal Court.

Mr McArdle told Ms Taylor “We have boosted our customer funding. It’s not a real number, I wouldn’t read too much into it. It’s just something we did,” he said.

During the call Mr McArdle explained that when the snapshot was produced at the beginning of December, it would now look “as good as possible”.

Anglo’s end of year accounts were published on December 3rd, 2008.

Mr McArdle said there were “still a few question marks” regarding emergency legislation going through the Dáil, as a result of the banking guarantee the previous day, September 30th.

He said a lot of money had matured that day at Anglo, and expectations that the customer funding number would fall by €1.5-2 billion had not been borne out.

Mr McArdle said that he had spoken to Irish and UK banks, and concluded overall reaction to the government scheme was “very, very positive”. “The guys that wanted to get out of Ireland have gotten out,” he said.

He said the momentum had swung and would continue to do so as long as the “paperwork got through the Dáil”.

“We need the State tonight to bring in a little more confidence,” he told the regulator.

Mr McArdle ended the call by telling Ms Taylor that Anglo and the financial regulator “needed to talk to each other more”.

Mr Drumm, with an address in Skerries, Co Dublin, has pleaded not (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 (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 trial, nearing the end of its sixth week, continues before Judge Karen O’Connor and a jury.