AIB linked to €60m property scam
AIB: linked to property scam in UK. Photo: Getty Images
UK prosecutors are investigating a possible loan fraud against the corporate banking unit of Allied Irish Banks that may have cost the lender €60 million.
Searches were carried out at a business and two residential addresses in London yesterday, the Serious Fraud Office said today in a statement. Allied Irish provided loans between 2003 and 2007 for the purchase of UK investment properties to companies controlled by an individual who’s now the main suspect in the investigation.
“During the course of 2008 AIB identified problems with one element of its security interests over this portfolio of UK investment properties,” the SFO said. After an internal review by the Dublin-based bank “it became apparent that the guarantees of certain lease payments on these properties by an investment grade counterparty” were fraudulent.
Allied Irish took control of the properties and later sold them, taking a €60 million writedown. A spokeswoman for the bank said the writedown was accounted for in its 2008 results. The bank couldn’t comment further as the investigation is ongoing.
Allied Irish fell 5 cents, or 7.7 percent, to 60 cents at 10:26 a.m. in Dublin trading. (Bloomberg)
- Louisa Nesbitt and Ian Guider
