David Drumm, the former chief executive of Anglo Irish Bank, believed Seán Quinn was trying to “scare” the bank into lending him more money as the financial crisis deepened in June 2008.
Tape recordings of conversations between bankers inside Anglo reveal the bank believed Mr Quinn was threatening it to keep funding his position in Anglo, which was held using contracts for difference (CFDs), or risk his international bondholders seizing control of his empire.
This would destroy any chance Anglo had of recovering its loans to Quinn which by June 20th, 2008, were more than €1 billion.
“He is trying to scare us into thinking these bondholders are going to come in, open the whole kimono on his personal stuff – the CFDs – and it’s all going to get out. He’s actually trying to scare us into lending him money which I’m just not going to do,” Mr Drumm says on the tapes.
Anglo later that month continued to lend to Mr Quinn. The Co Fermanagh businessman has since claimed it was Anglo that was putting pressure on him to keep punting on its shares in order to prevent the bank collapsing.
Mr Drumm also complains that reporting by The Irish Times of Anglo's financial difficulties was causing a run on the bank.
He blames an article by reporters David Labanyi and Simon Carswell on June 19th, 2008 for causing €80 million to leave the bank in one day.
Drumm calls the journalism in question “sloppy and highly expensive to us” adding “that is appalling – these guys are unbelievable”.
Capital inquiry
Following the article, the financial regulator called Anglo to inquire about their Tier 1 capital, the most important measure of the bank’s ability to keep going, which they surmise only happened because of the article. Drumm then says the regulator “is now regulating through the good offices of
The Irish Times
”.
“For f**k’s sake that’s appalling,” he adds.
Clearly exasperated at the the behaviour of the regulator in relation to the The Irish Times article, Mr Drumm says: "We're in f**kin' silly land now. We're gone beyond the silly land now, we're in whatever is beyond silly land."
Mr Drumm also reveals the stress he is under by shouting out repeatedly: “Show me the money, show me the money.”
The tapes were recorded in 2008 but their existence first emerged last year.
