Former treasury director says nothing improper about transactions between Anglo and IL & PTuesday 09 February 2016 23.27
A former director of treasury at Anglo Irish Bank has told the trial of four former bankers that he did not see anything improper about transactions carried out between Anglo and Irish Life and Permanent in March 2008.
Matt Cullen was giving evidence at the trial of former Anglo executives John Bowe and William McAteer and former IL & P executives Denis Casey and Peter Fitzpatrick, who have all pleaded not guilty to a conspiracy to defraud.
The four are accused of conspiring to mislead depositors, investors and lenders by making Anglo's deposits look more than €7bn larger than they actually were.
The court has heard money was placed with Irish Life and Permanent by Anglo and then deposited back into Anglo by Irish Life Assurance so it would look like a corporate deposit.
It was then returned to IL & P.
The trial has heard transactions were carried out between Anglo and IL & P to make Anglo's deposits look larger than they were at Anglo's half year end in March 2008.
The transactions were to the value of around €750m.
Under cross examination by lawyers for Mr Bowe, Mr Cullen gave evidence about his involvement in the March transactions.
He said he did not see anything improper about placing money withIL & P or taking a deposit from Irish Life Assurance.
He said he was present at a discussion with Anglo's then chief executive David Drumm who said he had no issue with how the transactions would work.
He said he had received no instructions in Anglo to conceal the transactions in any way or to conceal them from the Financial Regulator.
Mr Cullen said they had approached other banks about helping each other out but AIB and Bank of Ireland refused to do the transactions.
In June that year Anglo and IL & P carried out transactions in what was called a sale and repurchase or "repo" agreement to the value of €3bn.
The court heard this was to help IL & P at that institution's year end as the Central Bank was concerned IL & P's reliance on funding from the European Central Bank was too high.
This involved Anglo buying €3bn worth of stock from IL & P, which IL & P then bought back.
Asked if the transaction was unusual, Mr Cullen said everything in the market was unusual at that time.
The size of the transaction, the fact that he had never done it before and who the request came from all made it unusual.
But, he said, no one raised any suggestions that there was anything improper. He said no issue was raised - it was accepted and understood.
Mr Cullen said he did not see anything wrong with a bank trying to "look its best" when reporting its figures at the half year and full year end. "Why should it not?" he asked.
Mr Cullen said Mr Drumm had asked him in September as Anglo's year end approached to go to IL & P and see would they do transactions to a value of €6bn or €7bn.
He said he phoned IL & P under Mr Drumm's direction. He said IL & P said they would do €6bn or €7bn as long as Anglo helped them out in December.
He said Mr Drumm told him to go back and tell IL & P Anglo would do the same for them in December.
Mr Cullen said Anglo ran out of money on 29 September and had to go to the Central Bank for emergency funding.
The government guarantee was brought in overnight and he said funds began flowing into the bank again on 30 September.