Saturday 20th January 2016
ANGLO Bank bosses discussed the disguising the loan of €750m in smaller amounts
A trial hears
Anglo Irish Bank management discussed disguising short-terms loans of €750m from Irish Life and Permanent (ILP) and keeping them “tight as a duck’s backside”
A trial of former banking executives has heard.
The four men (pictured above right), including former ILP CEO Denis Casey and former Anglo Head of Finance Willie McAteer, are accused of conspiring to mislead investors by using interbank loans to make Anglo appear €7.2bn more valuable than it was.
Mr McAteer (65), of Greenrath, Tipperary Town, Co Tipperary, and Mr Casey (56), from Raheny, Dublin, are on trial alongside Peter Fitzpatrick (63), from Malahide, Dublin, who had been IL&P’s former director of finance, and John Bowe (52), from Glasnevin in Dublin, who had been Anglo’s head of capital markets.
They have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors through financial transactions to make the bank appear €7.2bn more valuable that it was between March 1 and September 30, 2008 in Dublin.
On day eight of the trial, the jury heard recordings of telephone calls made between staff at Anglo and ILP in 2008.
The interbank loans allegedly involved money being transferred by Anglo to ILP and then being put back on deposit with Anglo by their life insurance division, Irish Life Assurance. This would make it look as if Anglo had received large corporate deposits by the time it had to report its year-end figures on September 30, 2008.
The jury heard Mr Bowe told a conference call with Anglo executives in March 2008, when a similar type of transaction was being discussed in relation to the bank’s half-year figures, that the only issue they had to think about was from a regulatory point of view. He said: “And the regulator is more or less saying, ‘Look, I’m not looking’.”
In another call on March 27, Matt Cullen, a former director of treasury at Anglo, and his counterpart in ILP, David Gantly, discussed the details of the March transactions. Mr Bowe was also on this call.
Mr Gantly told Mr Cullen: “You put the stuff into us and we put it straight back through our other boys. You just need an overnight transaction through month-end, correct”.
The court heard “the other boys” referred to Irish Life Assurance.
Mr Gantly said he was purposely not using names because, he said “the walls have ears in this climate”. He later suggested it would be better to break the €750m figure into smaller transactions because “it might look better to disguise it somewhat, you know?”.
Mr Cullen, who is still giving evidence in the trial, told the court if details of the transaction got out it would affect confidence in the market so the idea was to “keep it tight inside in their own bank”.
Mr Gantly added later on the same call: “I can vouch for my own people, I know because of them, you have to be tight as a duck’s a*** here”.
In a phone call in September 2008, Mr Bowe told Mr Cullen the bank’s expectations for the year end accounts, that month, were very negative.
He said the bank’s figure for customer deposits was “about four billion less” than it needed to be.
The trial before Judge Martin Nolan and a jury will continue next week.
Raising Ireland’s would derail investment here, A study finds
A 15% corporate tax rate could reduce foreign firms investing here by 22%, An ESRI study suggests
An increase in Ireland’s corporate tax receipts last year has been linked to a move by Apple to shift some of its intellectual property rights here in wake of global moves to clamp down on multinational tax avoidance under the OECD’s Base Erosion and Profit Shifting initiative.
Even a modest rise in Ireland’s 12.5% corporation tax rate could seriously undermine the flow of foreign direct investment (FDI) here, a study by the Economic and Social Research Institute (ESRI) has revealed.
As a policy experiment, the ESRI simulated how FDI flows into Ireland would have changed under alternative tax rates between 2004 and 2012.
If the rate had been 15% over the period, the number of new foreign firms locating here would have been 22% lower, the study estimated.
A rate of 22.5%, which still undercuts rates in Germany and France, would have reduced the number of multinationals locating here by 50%.
- Further scrutiny on the Irish corporate tax regime.
- EU accused of targeting US firms in fiscal deals crackdown.
The study was conducted on behalf of the Government’s influential Tax Strategy Group, an inter-departmental group that prepares policy options for the Cabinet ahead of the budget each year.
The group’s papers from Budget 2016 were published on Friday by the Department of Finance. A 12-page paper on corporate tax issues said the State’s headline rate was “akin to a brand” for Ireland Inc and essential to securing mobile investment in an increasingly competitive environment.
It noted that while corporation tax, the fourth-largest tax heading, netted the exchequer €4.6 billion in 2014, the lion’s share was paid by a relatively small cohort of foreign-owned companies.
A surge in corporate tax receipts last year has been linked to a move by Appleto shift some of its Intellectual Property (IP) rights here in wake of global moves to clamp down on multinational tax avoidance under the OECD’s Base Erosion and Profit Shifting (Beps) initiative.
The paper said the OECD’s conclusions, which essentially seek to tax corporate profits in the jurisdictions in which they arise, presented a “significant opportunity” for Ireland.
While there is evidence of “spill-over benefits” to domestic firms, foreign-dominated sectors had lower output and employment multipliers relative to domestically dominated sectors, the paper said, underscoring the importance of the indigenous sector for employment growth. Multinationals have a lower employment footprint , accounting for just 8% of the Irish workforce.
Finance Minister Michael Noonan’s plans for the rainy day fund are undermined by the Labour Party.
Is it for a real rainy day? or just for a once only plop drop I ask?
Just hours after Fine Gael’s proposals to set aside €2.5bn from the resources available to the next government were revealed recently, now senior Labour figures claimed Mr Noonan’s figures “don’t add up”.
Labour sources said Mr Noonan will not be in a position to set aside such a significant sum over the next five years, pointing out that Fine Gael’s proposal to axe USC alone will cost €4bn.
“Fine Gael and Noonan have got their maths wrong; their plan simply can’t be delivered,” said a senior Labour strategist.
And speaking ahead of the Labour conference in Mullingar, Public Expenditure Minister Brendan Howlin said available resources over the coming five years should be used to speed up the delivery of capital projects.
While insisting the next government must be “prudent”, Mr Howlin said his party was not in favour of creating a formal ‘rainy day fund’.
“The notion that you could build up in five years something like the pension reserve fund – that can’t be done,” he said, adding the country is facing a lot of “pent up demand”.
Mr Noonan’s plans to put a quarter of the available cash into a “Contingency and Stability Fund” was described as a “positive development” by Fiscal Advisory Council chairman Professor John McHale.
However, Fianna Fáil finance spokesman Michael McGrath questioned if the Fine Gael minister’s sums added up.
Mr Noonan says there is up to €10bn available for extra spending in the next five years, including abolishing the USC and 10,000 extra public sector workers.
But Prof McHale warned that the resources available between 2017 and 2021 may be less than previously estimated. Due to demographic pressure and existing benefits commitments, it could be as low as €3.2bn, he said.
Mr McGrath said Mr Noonan “does not seem to understand” the concept of a proper rainy day fund, which he says is “put beyond the reach of government unless specific conditions are met”.
Meanwhile, Mr Howlin says too many people are “crying wolf” about the dangers of another economic downturn as he unveiled Labour’s plans to abolish the Universal Social Charge.
The party is promising a worker earning €50,000 will be €2,043 better off per year under their tax package, while somebody on €120,000 will benefit to the tune of €2 per annum.
And it was revealed last night the party also plans to reduce Pay Related Social Insurance (PRSI) for low-paid workers.This goes directly against a Fine Gael plan to bring down the entry point at which workers pay PRSI from the current €18,000 per annum down to €13,000.
Fine Gael intends to have more people pay the insurance but will promise to deliver extra dental and paternity benefits in return.
Mr Howlin said Labour would also look at returning benefits if the economic situation allows but most people “see PRSI as a tax”.
Asked whether the country’s tax base is strong enough to withstand such tax cuts, the minister said: “Because the crash was caused last time by everybody taking their eye off the ball and nobody crying wolf, there is now a whole chorus of wolf criers on the basis that if they keep crying one of them will be right.”
Up to 600 Labour Party delegates are due to attend the annual conference in Mullingar today to see Tánaiste Joan Burton deliver her pre-election pitch.
Under its tax plan, the party will abolish the USC for all workers up to €72,000.
A ‘clawback’ mechanism will kick in for workers earning between €100,000 and €120,000 to reduce their benefit.
Communications Minister Alex White said the USC had been the “single biggest whack” working people took during the recession. He confirmed the party was planning to use 75pc of available resources over the next five years to increase expenditure on public services and 25pc to cut taxes.
Mr Howlin said after a “very difficult period” people were now coming up to Labour politicians and telling them they “did a great job” in government.
Policing boss Josephine Feehily hears of morale and facility issues for Gardaí
Lack of resources, poor morale, equipment problems and, in some cases, dire accommodation are issues Gardaí have pressed home to the new police oversight boss.
Policing Authority chairperson Josephine Feehily said Gardaí she had met wanted to know what the new oversight body was going to do about it.
She said the authority’s primary job was to build an effective police organisation and improve public confidence in it.
However, she said the authority also wanted accountability to be seen “other than through a lens of blame” and was eager to be a “shop window” for good policing that was going on.
Speaking the day after the first board meeting of the authority, Ms Feehily said:
- The critical findings of the force made by the Garda Inspectorate were “fairly stark”.
- The authority would later this year take a stance on whether the force was being adequately resourced.
- Garda commissioner Nóirín O’Sullivan was “very impressive” and “knows her brief”.
- The initial stronger powers for the authority — including making the commissioner “accountable” to it — had changed as a result of “concerns about constitutionality”.
The former Revenue Commissioner chief said she had spent some time in a number of Garda stations.
“They told me they didn’t have enough resources. They asked me what would the authority do about that. They did certainly indicate poor morale. They talked a lot about equipment, but that was before the recent spending.
“Some of the accommodation I saw was dire – there’s work in progress on that as well which I think is very important,” she said.
Ms Feehily said the authority was immediately working on three areas: working with gardaí on devising a strategy statement; taking over the appointment of senior officers; and devising a code of ethics.
Regarding some concerns over the authority’s powers, she said they had “significant powers”.
She said that in the week of the third anniversary of the murder of Det Garda Adrian Donohoe it was worth reminding ourselves “the risks they take every day for us”.
The west is very awake as Mayo software company CBE creates 40 mainly new R&D jobs
Local firm CBE from nearby Claremorris is to create 40 new jobs in an expansion fuelled by innovation.
Claremorris-headquartered retail tech firm CBE Software is to create 40 new jobs in an R&D-led expansion that will see the company’s workforce expand to 150 people by the end of 2017.
CBE, which was founded in 1980, CBE designs and sells point of sale (POS) solutions for the retail and hospitality sectors and is the largest indigenous retail IT player in Ireland.
CBE has grown into a serious export player with installations in Canada, Australia, The Isle of Man, and Algeria and following significant market research are preparing to enter the US market.
CBE’s client list includes; James Hall Group (UK), Sewell Retail (UK), Musgrave, SuperValu, Centra, BWG, Spar, Mace, Costcutter, Gala, Spar UK, Louis Fitzgerald Group, Aramark, Elior, Compass, IBM and Bewleys.
‘Innovation through continuous research and development has been the cornerstone of our business’
“Innovation through continuous research and development has been the cornerstone of our business and it is through this that we have increased our market share in Ireland and significantly grown in our export markets year-on-year,” explained CEO Gerard Concannon.
“The CBE solutions enable our clients to manage their business more effectively and streamline their operations. Our latest software solutions have been hugely successful, primarily in the UK, since launched last year. We have also recently formed a strategic partnership with NCR to supply self-checkout solutions to the independent retail sector in Ireland and the UK.”
Through its current expansion and development plan CBE will employ 150 people by the end of 2017.
These roles will be within software development, customer support, sales and service with the majority of the positions to be filled by graduates. The company has developed very strong working relationships with the Institutes of Technology in Galway, Sligo & Letterkenny, DCU, University of Ulster, and with NUI Galway.
R&D a key to export success
“Enterprise Ireland is committed to working with companies like CBE who utilise research and development to help them innovate and internationalise their products for global market expansion,” said Enterprise Ireland chief executive Julie Sinnamon.
“Their growth and success to date in competing in overseas markets clearly demonstrates the calibre of their software solutions and technology with the rebound effect of creating more jobs at home and importantly, in the local region.”
The investment was welcomed by Taoiseach Enda Kenny who said CBE remained loyal to its roots and has brought employment and business to Mayo and the west of Ireland.
“Gerard Concannon and the CBE team deserve enormous credit for what they have created here in Claremorris. Their export-led expansion into markets like the UK ensures that CBE will continue to grow and with plans afoot to enter the US market the future is incredibly bright for CBE which is a great boost to the local and national economy,” Kenny said.
New evidence of a 4.5-Billion-year old impact that formed our Moon
Lead researchers on this study from left to right: Paul Warren, Edward Young and Issaku Kohl. Young is holding a moon fragment used in their study.
A recent study published in Science by Edward Young, a geologist from UCLA, found evidence for a violent collision 4.5 billion years ago that formed our moon . Evidence from lunar rocks in comparison with rocks found here on Earth suggests a giant impact was the source of the moon we know today. This further supports the common theory that the moon was formed by a major planetary collision between Earth and Theia.
The samples used in this study were collected as part of the Apollo 12, 15, and 17 missions to the moon in addition to a lunar meteorite. The study found that rocks from the Earth and Moon both have identical oxygen isotopes. Oxygen isotopic ratios are a useful way to determine origin of certain types of rocks since oxygen isotopes are differentially preferred in many chemical reactions leading to slight variations in isotopic ratios. The fact that both the Earth and Moon have identical isotopic ratios of oxygen lead to a belief that both are from a similar source and from well-mixed material. This supports a giant impact on Earth that would have formed the Moon given the mixing required to have identical isotopic ratios.
Often time’s moons will have different oxygen isotopic ratios given differing origin and size, and internal temperature compared to larger planets. To obtain the required oxygen isotope signature there is evidence that early Earth and Theia 4.5 billion years ago contained significant amounts of water with the oxygen-17 isotope. This water may have been in the form of hydrated minerals or ice. Oxygen on Earth is 99.9% oxygen-16, which is the stable form of oxygen with eight protons and eight neutrons per atom. However, there are very trace amounts of heavier oxygen isotopes such as oxygen-17 that includes one extra neutron as well as oxygen-18 with two extra neutrons.
The figure below is an example of how oxygen isotope ratios are used to determine global temperatures over hundreds of millions of years. Oxygen isotopes differentially evaporate from our oceans and fall as precipitation depending on regional and global temperature. As you can imagine oxygen-18 is slightly harder to evaporate, as it’s heavier and slightly easier to condense into precipitation, as it’s heavier. During warm periods the heat overpowers this difficulty in evaporating oxygen-18 and therefore we see more oxygen-18 in precipitation over glaciers during warmer times. When it is colder there is a larger barrier to evaporating oxygen-18 and thus we see lower oxygen-18 amounts during cold periods. This, in a very generalized sense, is how we determine past temperature variations from glaciers in Antarctica and around the world.
Phanerozoic climate fluctuations as indicated by changes in oxygen isotopic ratios (Credit: Science.com)
Given the required mixing the high-speed impact between Earth and another body had to have been a head-on collision. Previous estimates believed that the Moon was formed from a glancing blow at a high angle, swiping the side of the Earth rather than a full on impact. If Theia had merely glanced the Earth then you would expect that the Moon and Earth would have different isotopic signatures.
Indications are that Theia impacted Earth 100 million years following the birth of Earth, approximately 4.5 billion years ago . At this point the Earth would still be largely molten with a veneer or thin crust and a tremendous amount of volcanic activity. During the collision Theia was incorporated and mixed into parts of the Earth and moon. It is unclear the size of Theia during the impact, the current range of theories puts the planet between the size of Mars and the size of Earth.
The research for this study was funded by NASA , as well as the Deep Carbon Observatory and a European Research Council grant. This study was possible using state-of-the-art technology in mass spectrometry to determine very precise and extremely small measurements of oxygen isotopes.