AIB executives demanded £314m Kallakis payment, court told
Senior staff from Allied Irish Banks stormed into the Mayfair offices of an alleged fraudster and demanded £314 million within 24 hours, a court heard yesterday.
The AIB executives demanded the payment from Achilleas Kallakis after discovering guarantees he had used to obtain £740 million in property loans were fake, it was said.
Mr Kallakis, and his co-defendant Alexander Williams, both 44, are accused of defrauding AIB of £740 million in property loans.
Yesterday Mr Kallakis told jurors he was “stunned” to discover that the guarantees, made in the name of Chinese estate agent Sun Hun Kai Properties (SHKP), were not real.
He told Southwark Crown Court that the sum demanded was more than the £300 million market value of the ailing bank at the time and accused AIB of “legalised blackmail”.
He also launched a blistering attack on AIB’s “highly aggressive” and “uncompromising” attitude during the crisis meeting in September 2008.
Mr Kallakis claimed AIB’s loans on Irish assets were “crap”, insisting the prestigious property portfolio, held in a trust whose beneficiaries were his kids, was “the jewel in crown”.
George Carter-Stephenson QC, representing Mr Kallakis, asked his client what he understood AIB’s financial position to be around the time of the meeting. He replied: “The position of the bank was that they were in such dire straits they had to go to the Irish government to bail them out. They were two to three hours away from having to close their doors.
“We noticed that at one point the capital value of the entire bank was about £300 million.”
Revealing the demands then made by AIB and their solicitor Duncan Aldred, Mr Kallakis said: “We understood it would be £314 million that AIB requested to be sent to them within 24 hours. That was more than the bank was worth at that time so that was highly unrealistic.”
Mr Kallakis also told jurors he found it “inconceivable” that the guarantees were fake, given they had been examined by up to seven sets of lawyers, including four working for AIB.
Asked about the attitude of AIB and their solicitor Duncan Aldred during the meeting, Mr Kallakis said: “They came in with a very aggressive attitude. They came in with a very non-co-operative, non-conciliatory attitude. They came into our office and demanded £314 million the next day. I would like to see the Bank of England provide that the next day.”
Mr Kallakis told jurors how AIB then sent in accountancy firm Deloitte and several months later got in touch to say the property portfolio had been sold.
Mr Kallakis and Mr Williams both deny conspiracy to defraud, forgery, fraud by false representation, money laundering and obtaining a money transfer by deception.
The trial continues.