Business Irish

Wednesday 27 August 2014

Fraud accused Kallakis 'thanked AIB staff with luxury junkets'

Shane Hickey London

Published 20/11/2012 | 05:00

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Mike Cooke (left) was relationship manager of the AIB lending team, while David McWilliam was former head of corporate banking for AIB in the UK

ELABORATE junkets provided to AIB staff by a man who is now accused of a €920m fraud against the bank were a way of "thanking" people who were involved in property deals, a court has heard.

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Achilleas Kallakis, who is said to have used fake guarantees to take out property loans, has claimed hospitality for bankers, lawyers and others was a "standard" in the business.

Mr Kallakis and his business partner Alexander Williams have denied a series of fraud charges in relation to property loans taken out between 2003 and 2008 on high-end UK properties.

The trial had previously heard how staff from AIB were brought on junkets including a yacht trip in Monte Carlo, a birthday party in St Petersburg and an excursion to Mauritius during the period when the deals were done.

Yesterday, Mr Kallakis said the hospitality acted as "mechanism for thanking professionals" involved in the deals.

Lawyers, bankers, surveyors and others worked under tight time constraints, he said, and often worked late and at weekends and gave up holidays when on the deals.

At the time, the market was very competitive and bigger institutions could come in and "take" a deal very quickly, he said.

The trips also acted as a way for those involved to meet other professionals who took part, Mr Kallakis said.

Negotiator

The businessman has claimed he was merely a negotiator in the property deals, acting on behalf of the Hermitage Syndicated Trust, a body of which his children were the beneficiaries.

Mr Kallakis said the trust paid for the various trips abroad and said the level of hospitality was decided by Michael Becker, his Swiss-based legal adviser.

Mr Kallakis and Mr Williams are accused of using falsified rent guarantees from a well-known Hong Kong property giant – Sun Hung Kai Properties (SHKP) – to secure the loans from AIB.

One junket – to his 40th birthday party in Mykonos, Greece, in September 2008 – was not attended by AIB staff as it was deemed inappropriate at the time when questions over the loans had arisen.

AIB staff claimed Mr Kallakis had subsequently told them SHKP executives were at the party.

Mr Kallakis denied this yesterday and said he told AIB that various people from Hong Kong would be there at a time when the bank was considering opening an office in Hong Kong or Singapore.

During the period of the loans, he said the bank had an "insatiable appetite" to do deals and was "very, very eager" to lend.

Yesterday was the third day of testimony by Mr Kallakis in the case that began in September.

Both Mr Kallakis and Mr Williams deny conspiracy to defraud, fraud by false representation, money laundering and obtaining a money transfer by deception.

The trial continues today.



From St Petersburg birthday celebrations to yacht trips off the south of France



AIB staff dealing with the Kallakis loans were treated to a series of junkets between 2003 and 2008, including:



Monte Carlo - AIB relationship manager Mike Cooke stayed on board Mr Kallakis's yacht while on his way to a property conference in Cannes.



St Petersburg - Mr Kallakis held a birthday party in the Russian city and chartered a plane for some 200 guests. Mike Cooke, who attended with his wife, said he paid for his own airfares.



Mauritius - David McWilliam, the former managing director of AIB corporate banking in the UK, attended a "thank you" trip along with two other members of the property team over three days. The trip was not properly reported to the bank in line with regulations.

Irish Independent

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