Banker's ears pricked up at overhearing dealers discussing 'doing several billion with Anglo', trial hears

Peter McCabe, former credit manager at Irish Life & Permanent (ILP), said his initial reaction was to tell his boss, David Gantly, that things were getting dangerous.

He said Mr Gantly, chief dealer at ILP, told him in no uncertain terms that his input was not required.

Mr McCabe was giving evidence on day 64 of David Drumm's conspiracy to defraud trial at Dublin Circuit Criminal Court.

David Drumm (51) of Skerries, Co Dublin, has pleaded not guilty to conspiring with former bank officials Denis Casey, William McAteer, John Bowe and others to defraud depositors and investors at Anglo by “dishonestly” creating the impression that deposits in 2008 were €7.2bn larger than they were.

The former Anglo Irish CEO has also pleaded not guilty to false accounting on December 3, 2008, by furnishing information to the market that Anglo's 2008 deposits were €7.2bn larger than they were.

Mr Drumm (pictured below) accepts that the multi-million euro transactions took place in between Anglo and ILP in 2008 but disputes that they were fraudulent or dishonest.

Today Mr McCabe told Paul O'Higgins SC, prosecuting, that it was by pure chance he was in Mr Gantly's office on September 29, 2008, and overheard a number of dealers chatting.

“My ears pricked up and I brought it to his [Mr Gantly] attention. I said things were getting dangerous because my initial reaction was that it was a problem,” he told the jury.

He said that Mr Gantly told him the deal was triangular in nature, meaning there were three parties involved.

“I was told in no uncertain terms that my input as credit manager was not required. He said all the bosses knew about it,” Mr McCabe told Mr O'Higgins.

The prosecution then played a recorded phone call between Mr McCabe and Ger Knowles of Irish Life Assurance, from March 31, 2008.

During the call Ms Knowles told Mr McCabe that a €1bn transaction between ILP and Anglo had taken place that day. She said this was for his information only, and said there was no need for documentation or credit approval.

“Right. Just. Is it a panic thing or something?” Mr McCabe asked her. Ms Knowles replied it was something the Central Bank was encouraging ILP and other players to do.

“Don't worry, I won't land you in it. I know there's political considerations as well,” Mr McCabe said. Ms Knowles told Mr McCabe that the transaction was “a touchy feely subject”.

The trial has now entered its thirteenth week and continues before Judge Karen O'Connor and a jury of ten men and four women.