Banker says ears ‘pricked up’ at conversation over Anglo billions

A banker at Irish Life and Permanent said his ears pricked up on overhearing dealers discussing "doing several billion with Anglo" in September 2008.

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 Irish Bank by "dishonestly" creating the impression that deposits in 2008 were €7.2 billion larger than they were.

The former Anglo chief executive has also pleaded not guilty to false accounting on December 3rd, 2008, by furnishing information to the market that Anglo’s 2008 deposits were €7.2 billion larger than they were.

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

On Friday, Mr McCabe told Paul O’Higgins SC, prosecuting, that it was by pure chance he was in Mr Gantly’s office on September 29th, 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.

Triangular in nature

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 31st, 2008.

During the call, Ms Knowles told Mr McCabe a €1 billion 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 continues before Judge Karen O’Connor and a jury of 10 men and four women.