On March 31st, I illustrated how the concealment of excessive encumbered items probably contributed greatly to the premise of Anglo Irish bank, not to mention the demise of practically all of that bank's investor's capital as well. On April Fools Day I illustrated how AIB did the same thing, to the dismay and consternation of all of those who believe that Irish banks are the cleanest institutions in the austerity laden west. Now, it appears that the AIB revelation was quite controversial, with politicians reaching out to me from Germany to Mother Ireland herself. I can understand the feelings of consternation, for unlike Anglo Irish, Allied Irish Banks is still an ongoing concern, taking deposits and making loans as one of the largest institutions in Ireland.
The problem with both of these companies is that they have instituted blanket charges over the vast majority (if not practically all) of their assets, yet they failed to accurately and clearly state this in their financial reporting. The misrepresentation/omission as I see it, is gross and very, very material - potentially encompassing tens of billions of euros - per institution! I query: How many important (or worse yet, systemically important) banks can one find that have not disclosed such encumbrances fully and accurately to the public before it becomes evident that the public, regulators and quite likely those that conducted the stress tests for said banks, may not have a accurate picture of the Irish banking system's true condition? And if the Irish banking system is more encumbered than previously believed, and if the Irish banking system was bailed out (2x) by the Irish taxpayer, and the Irish taxpayer was bailed out by the EU taxpayer/Troika, then isn't the Irish taxpayer/EU taxpayer potentially unaware of further bank bailout tax bills coming down the pike? Is Ireland as a sovereign nation in much weaker condition than we have been led to believe since it essentially bought these bailed out banks under the (potentially mistaken) guise of having fixed them? Will the Irish get Cyprus'd when those that run the Troika demand more for a kilo of bailed out flesh?
I will explore this question further over my next few posts, but for now I query...
Who's next in line?
About Irish Life and Permanent Plc
Irish Life and Permanent has charges registered (see documents below) with the Irish Companies Registration Office (CRO). The bank gave a first floating charge in favour of the Central Bank of Ireland (an arm of the European Central Bank) and the Financial Services Authority of Ireland encompassing “all its right, title, interest and benefit, present and future, in and to each of the securities of such a class or description as may from time to time be designated by the European Central Bank as eligible for sale and/or purchase, as the case may be, by the Bank under its standard form for the time being of Master Repurchase Agreement, which specification may be made by reference to particular classes of repurchase transactions, and which are included in the schedule of Eligible Securities provided to the Bank from time to time.”.
These charges were registered with the CRO on 15th February 2008, yet there is no mention whatsoever of these charges in the Banks 2008 Annual Accounts (see attached).
In 2008, Irish Life and Permanent traded ADR’s in the U.S. under the symbol ILPYM. These ADR’s were traded OTC, giving the SEC jurisdiction over this company.
The bank gave a first floating charge in favour of the Central Bank of Ireland (an arm of the European Central Bank) and the Financial Services Authority of Ireland U.S. investors would have had to rely on the contents of Anglo Irish Bank’s 2008 Annual Accounts which, in my opinion and according to my research, concealed the existence of the CRO registered charges above. I have made a copy of the 2008 Annual Accounts for this company available for any and all who wish to discover for themselves whether these charges were properly disclosed. After all, you never know... I may have overlooked them.
These charge documents have also presumably not been included in the recent bank ‘stress testing’ conducted by the European Banking Authority.
If you have believe that the information below actually identifies a gross misrepresentation of fact, omission or outright fraud, simply contact the SEC and let them know that Reggie Middleton suggested they look into it. You can actually use this form to convey my message. For paid subcribers, I've posted another potentially "Cyprus'd" EU bank with shortable US/LSE traded shares/options for subscribers, reference EU Bank Capital Confusion, Part 2 - Malarkey (you may subscribe here). There will be another bank added within 36 hours.
Here's that interest rate calculator from EU Bank Depositors: Your Mattress Is Starting To Look Awfully Attractive - Bank Risk, Reward & Compensation . It shows how much interest you should be getting in return for the banking risk that you are taking.