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Fraud case hears of 'guarantees' given to AIB by Kallakis

AIB had no reason to doubt the background of a businessman to whom it loaned hundreds of millions of euro for property purchases and who is now accused of fraud, a court has heard.

A former manager with the bank detailed the background to how money was lent to Achilleas Kallakis.

The businessman and his partner, Alexander Williams, each deny 23 charges of fraud and money laundering, amongst others, surrounding €920m worth of loans taken out between 2003 and 2008, allegedly using forged guarantees.

Andy Rogers, who was with AIB for 18 months at the start of the relationship with Mr Kallakis, told Southwark Crown Court Mr Kallakis had a trust set up for his finances, apparently to benefit his children.

The prosecution in the case alleges that he portrayed himself as part of a Greek shipping dynasty as part of his strategy to receive loans from AIB.

Putting money through a trust was not unusual, said Mr Rogers, and there was a Kollakis family prominently involved in shipping, which the bank understood was connected to the businessman.

The two accused men are said to have used forged rent guarantees from a reputable Hong Kong property company -- Sun Hung Kai Properties (SHKP) -- to secure the loans. SHKP told AIB in 2008 that it knew nothing of these guarantees.


Earlier, Michael Cooke, who was also on the lending team to Mr Kallakis, said the guarantees acted to increase the values of the properties and therefore how much the bank would lend.

He had previously questioned claims that AIB made a €70m loss on the sale of the properties when concerns arose over the guarantees.

The remaining sites were sold off to Green Property for €815m (£650m) -- a portfolio which he said would be worth €1.25bn (£1bn) by next year. AIB gets 30pc of profits on the sale.

The trial continues today.

Indo Business