Wednesday 13 December 2017

AIB 'awash with cash' desperate to lend for property

Shane Hickey in London

AIB staff said the bank was "awash with money" and constantly tried to lend cash in an attempt to get into the UK property market, according to a man accused of masterminding a £740m (€888m) fraud.

The lender was said to be "desperate" and "overwhelmingly interested" in financing deals in a bid to expand the bank's business in London, it was claimed yesterday.

The claims were made by Achilleas Kallakis (43) who, along with his business partner Alexander Williams (43), has denied 21 charges including conspiracy to defraud, fraud, forgery, money laundering and obtaining a money transfer by deception.

The two men are accused of using forged guarantees from a reputable Hong Kong property company -- Sun Hung Kai Properties (SHKP) -- to secure loans totalling £740m from AIB between 2003 and 2008 for a series of property deals.

Yesterday, Mr Kallakis said staff at AIB were very anxious to enter the UK property market when his relationship with the bank began in 2003.

"Keen is not the word," he said. "Desperate. Anxious. Overwhelmingly interested."

The trial has previously heard that the bank was eager to capitalise on the boom in the UK commercial property market at the time.

Mr Kallakis said staff were "constantly" offering money for future business deals through phone calls and "friendly little lunches that had no bearing on existing business".

The bank was very eager to impress on him that it was in the market for property deals, was anxious to lend and was "awash with money".

The bank was new to the area and was "very, very anxious" to build up a loan book of properties, the jury heard.

In one instance, an AIB staff member who dealt with Mr Kallakis became "quite upset" when the Greek businessman discussed a residential property deal with him but did not approach him for the financing. The bank eventually took on the financing even though the deal, at some £2m to £3m, was considerably less than the others deals, at between £50m and £60m, that it was handling.

The UK's Serious Fraud Office (SFO), which has brought charges against Mr Kallakis and Mr Williams, alleges that they used a collection of false documents to say they had guaranteed rental incomes even if no tenants were in the buildings that they wanted to buy.

Southwark Crown Court heard how, according to Mr Kallakis, there was no formalised loan-application process with the bank.

Loan book

He claimed that instead he would meet with members of the property team, discuss the deal, the tenants of the property and other details.

"That really was the application," he said.

Mr Kallakis also claimed that SHKP was involved in the deals, even though the Chinese property giant has denied any part.

"I have no question they were involved in those transactions," he said.

After the allegations against the two men emerged, AIB took over their property portfolio and sold the high-end addresses to Green Property, an Irish firm, at a loss of £56m.

During the five-year period when the two accused men were dealing with AIB, staff from the London property-lending team were treated to a series of trips away, including to the World Cup final in Berlin and to the Monaco Grand Prix.

Irish Independent

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