11/02/2009

Govt Knew Of 'Startling' Anglo Deposit

Following revelations of a huge deposit made to the Anglo Irish Bank last year, the Taoiseach has shocked much of the Dáil by admitting the Government was aware of the payment.

It emerged last night that Irish Life & Permanent in Anglo Irish Bank made the controversial deposit before the Government decided to nationalise the institution in January.

According to reports today, the deposit placed by IL&P was on September 30th, the day the bank's financial year ended.

The payment has been described as "startling" by a Labour TD.

Labour's Joan Burton said: "These startling new revelations imply that Anglo Irish Bank may have sought to misrepresent its financial strength through the deposit of billions of euro by Irish Life & Permanent into Anglo before the end of its financial year.

"We need nothing short of a full, forensic investigation. This type of Enron-style accounting is simply unacceptable. Ireland's international reputation continues to be severely undermined as a result."

Brian Cowen has told the house the matter is under investigation. The Taoiseach said the new board of the bank had provided information about the deposits, and that the Director of Corporate Enforcement was also investigating the bank.

The deposit, which boosted Anglo's balance sheet, was made just hours after the Government announced its wide-ranging bank guarantee, leading to wide speculation of further underhanded practice by the bank.

Chairman Sean FitzPatrick, CEO David Drumm, and board member Lars Bradshaw resigned in December from the Anglo Irish in December, following the revelation of a loan scandal.

Both men were found to have borrowed €150 million from the bank in order to buy shares in their own company. The loans were then transferred to another bank prior to year-end audits, thereby causing the loans to be understated and appearing to only be worth €40 million.

(DW/JM)

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