Kallakis trial told of checks before AIB £750m loan

Allied Irish Bank did not make anywhere near as many checks before loaning an alleged fraudster £740 million as another bank did which lent him 30 times less cash, a court has heard.

Achilleas Kallakis and co-defendant Alexander Williams are accused of defrauding AIB of £740 million in property loans.

They are also alleged to have defrauded Bank of Scotland, part of the HBOS group, out of €29 million to convert a passenger ferry into a “superyacht”.

That deal fell through owing to a combination of problems obtaining the second instalment of the loan, making interest repayments and unforeseen problems with the boat.

Yesterday Mr Kallakis compared his dealings with AIB and Bank of Scotland, accusing the latter of being “petty” in demanding proof of various claims on a curriculum vitae detailing his background.

George Carter-Stephenson QC, representing Mr Kallakis, asked his client about papers relating to the loan for the boat.

It was taken out as a non-recourse loan on behalf of Mercator Shipping Corporation, meaning that only Mercator was liable for it, jurors heard.

Petty

Mercator was a firm said to have been owned by Oregon Shipping Corporation, which was in turn owned by a trust.

“The loan is for €29 million, and your loans with AIB were for considerably more?” asked Mr Carter-Stephenson.

Mr Kallakis replied: “I only really had the majority of experience dealing with loan documentation from AIB loan documents. AIB did not have anywhere near the amount of conditions present for a £250 million loan, let alone a £20 million loan. had nothing to do with a non-recourse loan to Mercator. It was such a petty and insignificant thing. Picking up the phone to the trust would have resolved it.”

Mr Kallakis also told Southwark Crown Court that he had raised his displeasure with Bank of Scotland transaction manager Paul Stirrat.

“I explained to him that this whole process was trying to knock in a nail with a jackhammer. It was just overdoing things for a €29 million loan.”

Mr Kallakis denied the accusations levelled at him.

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

The trial continues.