A JURY HAS heard that senior bankers in Irish Life and Permanent were “scared shitless” as transactions were carried out with Anglo Irish Bank in September 2008.

Former Head of liquidity at ILP, Paul Kane, told a colleague “the boys are scared stiff”, adding: “It’s not the way to do business. You scratch my back and I scratch yours.”

Today, Mr Kane continued his evidence on day 54 of David Drumm’s conspiracy to defraud trial at Dublin Circuit Criminal Court.

Mr Drumm (51), former CEO of Anglo, accepts that multi-million euro transactions took place in between Anglo and Irish Life & Permanent (ILP) in 2008, but disputes they were fraudulent or dishonest.

Mr Kane told the jury that he had personally carried out and supervised the €7.2bn transactions between the two banks from beginning to end.

The jury listened to phone calls recorded on Mr Kane’s line between him and David Gantley, former head of treasury at ILP.

Mr Gantley told Mr Kane about a meeting with Denis Casey and Peter Fitzpatrick, who the jury have heard were number one and number two in command at ILP.

“I just had a session with Denis and Peter. The boys are scared shitless…Actually more Denis to be honest with you,” Mr Gantly said.

Mr Kane replied that Mr Casey and Mr Fitzpatrick weren’t scared shitless last week when “we borrowed €820m”.

“I fucking pointed the same fucking thing out,” Mr Gantley said.

“It’s not the way to do business. You scratch my back and I’ll scratch your back,” Mr Kane replied.

“Boss man”

Mr Gantley said he believed, “These guys are getting scared stiff, in the scale of things” adding, “It needs to be boss man to boss man.”

Paul O’Higgins SC, prosecuting, asked Mr Kane what the two men were discussing during the phone call.

The witness said that on the day in question, Anglo were disappointed they hadn’t been granted a credit limit by ILP.

He said that days previously, Anglo had increased ILP’s limit to €820m and said there was disappointment that the favour couldn’t be returned.

During cross-examination, the witness agreed with Lorcan Staines BL, defending, that though each individual transaction between Anglo and ILP in 2008 may have only benefitted one side, the reality was that both benefitted from the reciprocal arrangement.

“Absolutely, this was the green jersey agenda,” Mr Kane said.

Mr Drumm (51) of Skerries, 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 bank’s former 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 €7.2 billion larger than they were.

The trial has now entered its eleventh week and continues before Judge Karen O’Connor and a jury.