Financial Services

Expert witness in Anglo trial denies confusion

Accounting expert holds to Anglo trial evidence that €7.2bn transaction was not covered by accounting standard

Former chief executive Irish Life & Permanent Denis Casey (54) leaving court where he is appearing on charges relating to financial transfers involving Irish Life Assurance, Irish Life & Permanent and Anglo Irish Bank, between March and September 2008. Photograph: Collins Courts.

Isabel Hayes
Declan Brennan
Mon Apr 18 2016 - 18:08

An accounting expert has denied being confused about “labyrinthine” accounting standards while giving evidence at the trial of four former bankers accused of conspiring to mislead investors.

Former senior bankers from Anglo Irish Bank and Irish Life and Permanent (ILP) are on trial for allegedly conspiring to mislead investors by setting up a €7.2 billion circular transaction scheme to bolster Anglo's 2008 balance sheet.

John Bowe (52) from Glasnevin, Dublin; Willie McAteer (65) of Greenrath, Tipperary Town, Co Tipperary; Denis Casey (56), from Raheny, Dublin; and Peter Fitzpatrick (63) of Convent Lane, Portmarnock, Dublin have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors through financial transactions between March 1st and September 30th, 2008.

On day 55 of the trial in Dublin Circuit Criminal Court Monday, Michael O'Higgins SC, defending former Irish Life & Permanent chief executive Denis Casey, cross-examined Mark Hunt, an expert witness for the State.

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Last week, Mr Hunt, a chartered accountant who has worked for the Bank of England and the UK's Financial Conduct Authority, told the jury the €7.2bn deal had no commercial or economic substance, both of which are technical accounting terms.

Mr Hunt told the court the series of transactions was designed to “move a number on a balance sheet”. He said the “series of transactions in its entirety” was not covered by an accounting standard known as IAS32.

Mr O’Higgins suggested Mr Hunt was “confused and made a mistake”.

“I disagree,” Mr Hunt replied.

Mr O’Higgins put it to Mr Hunt that: “These accounting standards are labyrinthine and complex.”

“It’s complicated,” Mr Hunt replied. “There’s no getting away from the fact it’s complicated.”

Earlier, Mr O’Higgins suggested to Mr Hunt that “banks all around the world were falling on their backsides” in September 2008. “The world had fallen apart,” the barrister said.

“No it hadn’t,” Mr Hunt replied. “It’s a mischaracterisation to say the world had fallen apart in September 2008.”

The trial continues before Judge Martin Nolan and a jury.

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