IRISH LIFE Investment Managers (ILIM) has moved to distance itself from from the debacle over multi-billion-euro deposits made in Anglo Irish Bank by its parent Irish Life Permanent (ILP), deals which cost ILP chief Denis Casey and two of his top lieutenants their jobs.
Although ILIM was named in many media reports as a participant in the controversial circular movements of money between the two institutions, its chief Gerry Keenan has stated in a letter to clients and business partners that the “details of the transaction” in respect of rates and term were agreed between the treasury unit of sister company Permanent TSB and Anglo Irish Bank.
The transactions have been investigated by the financial regulator, which has now referred them to the Garda Bureau of Fraud Investigation.
Mr Keenan said the “only extent” of ILIM’s involvement in the transactions was in respect of “accounting and booking functionality” his business carries for sister company Irish Life Assurance, the ILP unit that placed short-term deposits of €7.45 billion with Anglo last September.
“Media reports speculating that these deposits were agreed or placed on behalf of Irish Life Investment Managers are incorrect,” he said.
Circulated three days after Mr Casey’s resignation one month ago, his letter said the deals fell far below the standards that which Irish Life set for its organisation.
“No client assets, unitised or segregated, were involved in this transaction,” Mr Keenan said. “Due to the collateralised nature of the transaction – with equivalent deposits being received and being made – there was no economic or financial risk within the transaction to any Irish Life client.” ILP and Anglo are in dispute over the nature of the deals, which were executed immediately prior to the end of Anglo’s fiscal year and apparently used to flatter its balance sheet by being categorised as customer deposits instead of routine inter-bank deposits.
ILP claims the deals were, in effect, loans from ILP backed by “collateral” deposits from Anglo, but Anglo claims its own “inter-bank placements” with ILP were “not cash collateral for deposits” from ILP.
