David Drumm trial hears of Anglo request for over €1billion in emergency funding

David Drumm

By Sarah-Jane Murphy

The former head of Treasury at Anglo has described hand delivering a letter to the Central Bank requesting more than €1bn in emergency funding on the evening of September 29, 2008.

Matt Cullen was giving evidence at the trial of David Drumm, who it is alleged was involved in a conspiracy to defraud in the amount of €7.2 billion between March and September 2008.

“We were short of funding that day and we saw we didn't have the cash to make payments the following morning,” he told Paul O'Higgins SC, prosecuting.

Mr Drumm (51), 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.

Earlier today Mr Cullen told Dublin Circuit Criminal Court that he and others were told to come up with ideas to generate funding in advance of Anglo's half-year end in March 2008.

He said this followed the "St Patrick's Day Massacre" when the bank's share price had dropped significantly.

Mr Cullen said discussions took place between David Drumm, the Financial Regulator, the Central Bank and executives in other banks in late March 2008, as to how Irish banks would help each other.

He said he was asked to approach people he knew in other banks to see if any assistance could be given in this regard.

Mr Cullen said Bob O'Hara, who was in charge of the money desk at the Central Bank, phoned him on April 28, 2008 to check how fundraising initiatives at Anglo were progressing.

“Bob said we were not to show 'effing reliance on ECB funding',” he said.

Mr Cullen said he received a phone call from David Gantley, Director of Treasury at Irish Life and Permanent, asking if Anglo “would do a repo” for ILP's return date, which was June 30.

A “repo” was explained to the jury as a sale and repurchase deal.

“I asked what size. He said €3bn. I spoke to McAteer, Bowe and Drumm. The answer came back straight away – yes,” Mr Cullen told Mr O'Higgins.

The witness said weekly financial incentive meetings became the norm at Anglo from June 2008 on, as the global financial situation worsened.

He said staff from corporate funding, retail funding, large corporations and interbank attended and reported “how things were out there and in here”.

He said these briefing sessions were a precursor to regular Friday afternoon meetings held in Mr Drumm's office.

Mr Cullen said he was asked to come up with funding initiatives again in July 2008 in preparation for Anglo's year end in September.

The jury were shown a document with several proposed ideas and the corresponding initials of bank executives who were tasked with coordinating each one.

When asked how the mechanics of the circular transaction between Anglo, ILP and Irish Life Assurance, which took place in September 2008, was decided, he said it was done in stages.

“If we tried to do €7.2bn cash in one go and got blocked by the system, the fear was that everyone in other banks would hear you had problems with your payments,” he said.

Last Friday, Mr. Drumm's defence barrister, Tessa White BL, told his trial that there were facts he wished to admit to which would reduce both the length of the trial and the complexity of the evidence.

The trial continues before Judge O'Connor and a jury of ten men and five women.



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