Anglo Irish Bank, Irish Life & Permanent and the magical mystery money-go-round
The farce continues:
Revelations yesterday that the €7 billion deposit by a subsidiary of Irish Life & Permanent, Irish Life Investment Managers, with Anglo Irish Bank shortly before Anglo’s financial year end which was then withdrawn just after the year end in order to make Anglo’s deposit base look healthier had in fact originated in a loan from Anglo to IL&P brought the latest round of scandal within the Irish banking sector to new heights.
This is nothing less than a complete fabrication of the bank’s financial position and is massively misleading to shareholders and potential investors, not to mention highly dubious in terms of the deposit-to-loan ratio guidelines imposed by the Financial Regulator.
Once again this is the sort of activity which external auditors are supposed to expose.
Ernst & Young, Anglo Irish Bank’s auditors, have shown themselves to be guilty of gross incompetence and negligence, and when the fallout of this situation accrues to the people who were in charge (and it must if we are to have any hope of regaining our credibility as a country and as a global business) at Anglo at the time – Sean Fitzpatrick, David Drumm, Donal O’Connor, Lar Bradshaw et al – and the directors at IL&P who are currently in a crisis meeting, some of the blame must pass to Ernst & Young and possibly also to KPMG who are auditors to IL&P.
Edit: In fairness to KPMG, as IL&P’s financial year follows the calendar one, they can’t really be held to blame for this as this event probably wouldn’t have yet come under their scrutiny.
