Ex Anglo exec says he was 'not aware €7.2bn ILP transactions were cash exchange with no security' until after the fact

Colin Golden at court today. Picture: Courtpix

By Sarah-Jane Murphy

The former head of group finance at Anglo Irish Bank said he was not aware that €7.2bn transactions with Irish Life and Permanent were “a straight exchange of cash with no underlying security” until after they had taken place.

Colin Golden told the jury he first became aware of the scale of the deals and the fact they were non-cash transactions, in the “first few days of October 2008”.

Mr Golden was giving evidence today at David Drumm's conspiracy to defraud trial, at Dublin Circuit Criminal Court.

On day 37 of the trial, he told Paul O'Higgins SC, prosecuting, there had been talk of a transaction of a smaller size, and of a slightly different nature throughout the summer of 2008.

“It went from three to seven, and I had been told it was a collateralised transaction. That's where there's lending on both sides, secured by stocks,” he said.

Mr Golden told the court that Ciaran Cunningham, head of treasury finance at the time, told him about the €7.2bn transaction with ILP that had taken place on September 30, 2008.

The witness said he was a little surprised when Willie McAteer asked him to contact the financial regulator on October 24 to talk her through the transactions.

“I suggested to Mary Burke that we send through the detailed transactions, and she agreed that was a good idea,” he said.

Mr Golden said Mr Cunningham emailed him a list of the deals with ILP, as he wouldn't have been familiar with their level of detail.

He confirmed that this was then forwarded by email to Mary Burke at the Financial Regulator.

Mr O'Higgins asked if the regulator was told at that time that Ernst & Young, Anglo's external auditors, had been “taken through” the transactions by employees at the bank.

“A number of days before my conversation with the regulator we had taken Ernst and Young through them, so yes, I thought it was a pertinent point for the regulator to be aware of,” the witness said.

Mr Golden told the jury that accountancy wasn’t black and white, and said there was always an element of judgement involved.

“Auditors have a level of expertise in order to assist banks in this regard,” he said.

Mr Golden said that in mid-October 2008, Vincent Bergin, head of the EY team who audited Anglo had said the transaction with ILP was “technically sound”.

“Technically sound from an accounting perspective. I can't recall the conversation beyond that,” he said.

Yesterday, a former Anglo executive told the jury that he was shocked at the “hostile and aggressive” reaction of the regulator to the ILP transactions as he believed “the regulator was aware they had taken place”.

Matt Moran, former chief financial controller at Anglo said that during a regular meeting at the financial regulator in January 2009 he was “suddenly being asked questions as if the regulator knew nothing about the transactions”.

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 €7.2bn 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 €7.2bn larger than they were.

The trial, now in its sixth week, continues before Judge Karen O'Connor and a jury.

Added 5.35pm: A former senior accounting executive at Anglo Irish Bank said he did not understand the significance of “who placed the money first” regarding the bank's transactions with Irish Life and Permanent until months after they took place.

Colin Golden, former head of group finance at the bank, told Dublin Circuit Criminal court that even during his time working at Anglo he didn't understand why people were discussing that point.

“I'm going to be completely straight up here – who placed first – I didn't understand why it was a big deal,” he said.

Mr Golden was giving evidence today on day 37 of David Drumm's conspiracy to defraud trial.

He told Paul O'Higgins SC, prosecuting, that the group finance department produced a report for the bank's audit committee meeting on November 18, 2008.

He said senior executives at the bank reviewed the wording of the reference to the ILP transactions, which was labelled “Item 12 – Customer Accounts”, on the document he presented to the meeting.

“I would be guessing if I said who wrote it. But I reviewed it,” he told the jury.

When asked about inaccuracies in the document regarding the description of the transactions, he said it was a surprise when he found out in early 2009 that the deal had “settled net”.

“I was told they were settled gross,” he said.

He said he wasn't sure who had told him this, and added it could have been a misunderstanding “on our side or on someone else's side”.

During cross examination Mr Golden said the head of Ernst and Young audit team, Vincent Bergin, shrugged his shoulders and described the transactions with ILP as “technically sound”.

Mr Golden said that he phoned the financial regulator on October 24 2008 to talk him through the ILP transactions after being asked to do so by Willie McAteer.

He described how he told Ms Burke that he had been lead to believe that the transactions had been approved by the regulator.

“She sniggered, and said she didn't know but led me to believe that someone more senior was knowledgeable about them,” he told the jury.

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