David Diggins' superiors were not qualified to assess his work because they were not qualified in the area of international lending, a lawyer said yesterday.

But a former Bank of Butterfield chief executive officer, denied this suggestion when it was put to him.

John Michael Collier, former president and chief executive officer at the bank, said that he was "reasonably familiar'' with Diggins' performance because he was satisfied that the reporting lines were working effectively.

Diggins was a senior manager responsible for all foreign and international loans at the Bank of Butterfield.

But he was arrested in March 1996 after questions were raised about his handling of a loan for 1,875,000 pounds to a Gibraltar based company called Neway Properties Ltd.

The company then used the money to purchase a property in London's west end called the Moulin Complex around August 1995.

Since that time, the money has been repaid and the bank has made more than 90,000 pounds from the deal.

Meanwhile, Diggins lawyer Julian Hall asserted that neither fellow loan officer Hal Masters, or Diggins' immediate supervisor Daniel Outerbridge, or Colin Furr who reported directly to Mr. Collier were sufficiently expert to supervise Diggins.

Each of Diggins' supervisors have testified that they deferred to Diggins on matters of international lending because he had much more experience in this area.

On that basis, Mr. Hall asked Mr. Collier how reliable the reporting process could have been if each of his superiors did not have comparable expertise.

But Mr. Collier defended his executives and said that he had no reason to disbelieve their evaluations of Diggins' work.

And he confirmed that Mr. Outerbridge, even though he was Diggins' immediate supervisor, was mainly involved in domestic banking throughout his career and relied on Diggins to run the international loans side of the bank's credit department.

The nub of the Crown's case is an allegation that Diggins falsified the information contained in a loan application when he arranged the Neway Properties Ltd. loan back in 1995.

Moreover, the Crown also allege that he did not follow proper procedures and that money was advanced improperly.

Diggins' trial is now in its third week. At the beginning he was charged with stealing $2,812,500 and obtaining the money under false pretences and with intent to defraud, inducing Mary Faries to deliver the money to Neway Property Ltd. without proper authorisation on August 29, 1995.

But those charges were dropped when Solicitor General Barrie Meade issued a Nolle Prosequi which meant that he was no longer prepared to proceed on either the stealing or the obtaining money by false pretences charges as they first appeared on the indictment.

Diggins now stands accused of fraudulent false accounting. It is alleged that on August 25, 1995 he falsified a report and its supporting documents.

Secondly, it is alleged that he obtained a valuable security by false pretences on August 28 and with intent to defraud caused Mary Faries to send $2,812,500 (1,504,991.93 pounds) to the National Westminister Bank in London.

Pusine Judge Richard Ground is presiding.