David Drumm: ‘There is a witch hunt ... I convince myself that this will pass’
An Irish Central exclusive interview with the former Anglo Irish Bank boss now in US
NOD: You are being pursued in earnest by the bank now, What’s your feeling about that?
DD: I borrowed money from the bank at the end of 2007, to invest in the bank at the request of the bank because we had the start of the financial crisis then with Northern Rock going bust in the UK.
The board made a decision at the time that we all had these options, share options. With a share option you can just sit and wait for it to come into value, you don’t have to exercise it. It’s a one-way bet. But the board decided, really under Sean’s direction that executives should exercise shares and your non-executives should buy shares and the markets should know about that. You had to tell the market when you bought shares and that was the purpose of it. They’re investing shares, showing confidence in the bank and I really had no issue with investing in the bank in that time.
So I borrowed the money, but there is a conception that I borrowed money and bought houses in America, the houses in America were bought after the after-tax money I earned. The money I borrowed from the bank, went into the bank and went to the taxman. So I had this loan, when I left the bank at the end of 2008, the loan had matured and the bank offered me a one-year extension and I agreed to the one-year extension on the basis that, at the end of that one year which would have been 2009, that they would sit down with me and agree a long-term repayment plan.
The shares were gone, my job was gone, I did not have eight million or seven-and-a-half million or whatever it was waiting in the bank to repay the loan and I knew that we would have to do a deal, as I had done with many clients over many years, spread it out over time and figure out a way to sell assets and figure out a payment plan. They agreed to that.
Then Brian Lenihan agreed the relationship framework document in the mid 09s, June or July 2009, that transferred the authority and power over directors loans at Anglo to the Government, to the Minister of Finance, which took the authority away from the bank. Then they appointed a new CEO (Mike Aynsley) and the first thing he did was call in my loans. They were demand loans, he was legally entitled to do that , but it was outrageous to call it in because first of all a bank operating properly would never do that and B they had a contract with me, not to do that in the long term plan.
It resulted in a lawsuit in Ireland which I ended up having to defend and I didn’t want to be in lawsuit, I couldn’t afford to run a lawsuit so I tried desperately, over a period from January 10 to October 10 when I ended up filing for bankruptcy, to settle.
And what settling meant was offering the bank all of my assets, which they would get anyway in a bankruptcy if you like, and my pension. To give you perspective on that, the assets were probably worth four million, my pension was worth six. So 10 million. They couldn’t possible settle, it took me a while to accept that.
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