Saturday 10 December 2016

Kallakis 'dumbstruck' when AIB confronted him on fraud claims

courts

Shane Hickey , in London

Published 29/10/2011 | 05:00

A BUSINESSMAN accused of masterminding a £740m (€850m) fraud against AIB was "dumbstruck" when presented with allegations that paperwork used for a series of loans had been falsified.

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A court in London heard yesterday how Achilleas Kallakis (43) initially said nothing when a solicitor acting for the bank raised the issue with him, while his business partner Alexander Williams became "more nervous" than the lawyer had "ever seen anyone in any meeting".

Mr Kallakis, who portrayed himself as a Greek shipping tycoon when taking out loans for 16 different landmark properties over five years, is accused of using forged guarantees from a reputable Hong Kong property company to secure the monies between 2003 and 2008.

The two men have pleaded not guilty to 23 charges of fraud, forgery and money-laundering, amongst others.

They are accused of falsely claiming Sun Hung Kai Properties (SHKP) as their guarantor for the loans. This was a crucial part of the financing deal from the bank, which in turn raised the value of the lands and buildings in question.

AIB was told in the middle of 2008 by SHKP that the company did not know anything of the guarantees.

Duncan Aldred, of the legal firm CMS Cameron McKenna, told the court that Mr Kallakis said he was "dumbstruck" after being told of the development in September of that year, while Mr Williams, he said, was "visibly shaken".

Nervous

"Alexander Williams was more nervous than I have ever seen anyone in any meeting," Mr Aldred added.

Mr Aldred and senior members of AIB held a series of meetings with Mr Kallakis following the revelation from SHKP.

German bank Helaba had initially raised the alarm after there were concerns about reports of a previous conviction that Mr Kallakis had for fraud. This prompted AIB to contact the Chinese company.

Lawyers for the businessman subsequently told the AIB team that the problems with the guarantee had come as a surprise and that both they and the bank had lost out as a result. They rejected any indication they were responsible for what had happened, the court heard.

Figures from the bank have previously said that the news was devastating as the guarantees had been an extremely important part of the structure of the loans. Without them, millions of pounds were written off the value of the properties.

Staff from the London property-lending team of AIB were treated by Mr Kallakis to a series of trips away over the period of the loans, the court has heard, including to the World Cup final in Berlin and to the Monaco Grand Prix.

AIB seized the properties after the issue came to light and subsequently sold them to an Irish property company, Green Property.

The bank made a loss of £56m (€64m) on the deal.

Irish Independent

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