Drumm trial hears Anglo official McArdle told regulator €7.2bn transaction was 'not a real number'

By Sarah-Jane Murphy

The former head of liquidity at Anglo Irish Bank told the financial regulator that a €7.2bn transaction with ILP “was not a real number, I wouldn't read too much into it.”

In a recorded phone call, on October 1, 2008, Ciaran McArdle referred to the transaction with Irish Life and Permanent (ILP) and said Anglo was “trying to manipulate their balance sheet for their end of year accounts”.

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 that the transaction with ILP “just happened” to fall on the last day of the month.

Ciaran McArdle.

“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.

“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 3, 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 30.

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

Mr McArdle said that he had spoken to UK banks and banks across Ireland, and concluded that 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”.

Mary Rose Gearty SC, prosecuting, took Mr McArdle through his garda statement, and referred him to his understanding of Anglo's transactions with ILP in June 2008.

He agreed with Ms Gearty that it was his understanding that the €7.2 transaction was a “repo deal” similar to the one carried out in June.

Mr Drumm, with an address in Skerries, Co Dublin, has pleaded 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 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.

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