Anglo dealer claims loan query reply was ‘a joke’

AN ANGLO Irish Bank dealer said to a colleague who queried an interbank loan: “Do you want the answer to tell the auditor, or do you want the answer?”

Mike D’Arcy told a jury his comment on a phone recording about a deal with Irish Life and Permanent during the financial crisis was “a joke”. Mr D’Arcy, who worked in Anglo’s treasury department, was giving evidence in the trial of the bank’s former CEO, David Drumm.

Mr Drumm (51) has pleaded not guilty to conspiring to defraud Anglo investors by dishonestly creating the impression that the bank’s customer deposits were €7.2bn larger than they were. He is alleged to have conspired with Anglo’s former finance director Willie McAteer and head of capital markets John Bowe, as well as then-CEO of Irish Life and Permanent, Denis Casey, and others. The case centres on a series of interbank loans between Anglo and ILP in September 2008.

Mr Drumm also denies false accounting, by providing misleading information to the market. Yesterday, Mr D’Arcy was in the witness box as a series of phone calls was played to the jury.

In one call in 2008, Mr D’Arcy was speaking to Paul Kane of Irish Life and Permanent about a transaction. “So do we agree assets, dates, rates, s**t like that?” Mr D’Arcy asked Mr Kane. The jury was then played a phone call from September 25, 2008 between Mr D’Arcy and Vincent Hibbert, finance manager in Anglo’s Isle of Man division. “I was cc’d in on the request to have our liquidity placement placed with, which one, which one was it?” he asked.

Mr D’Arcy replied that it was Irish Life. “With Irish Life, yeah,” Mr Hibbert said. “Just a quick question of rationale because we will be asked the question… by the auditors. Uh, why the one party rather than the usual sort of, you know, two or three? Is there, is there any reason for that?”

“Do you want the answer to tell the auditor or do you want the answer?” Mr D’Arcy replied, before going through the transaction. “No, that’s fair enough. I mean I can completely filter that down just to, you know, liquidity management,” Mr Hibbert said.

Mr D’Arcy said Irish Life had been on to him “wondering where the money is”. Mary Rose Gearty SC, prosecuting, said gardaí had asked Mr D’Arcy about his comment “do you want the answer to tell the auditor” and he had said it was “more of a joke than anything”. “Absolutely yes,” Mr D’Arcy agreed.

Earlier, Declan Quilligan, former head of Anglo’s UK division, told Paul O’Higgins SC, prosecuting, that the 2008 financial crisis became “about the survival of the bank”.

The trial continues.