Property firm 'did not back' AIB loans to businessmen

Thu, Nov 1, 2012, 00:00

ONE OF the world’s largest property firms did not give guarantees to cover hundreds of millions of pounds of borrowing from AIB by two London-based businessmen facing fraud charges in London, the company’s former chairman has said.

Achilleas Kallakis and Alexander Williams face multiple charges that they forged letters from Sun Hung Kai Properties (SHKP) guaranteeing it would cover any rental losses on properties bought by the two with AIB funds.

Giving evidence by video link from Hong Kong, Walter Ping-sheung Kwok told Southwark Crown Court yesterday that signatures on documents put forward by the two men in their dealings with AIB, purporting to be his, were forged.

AIB lent nearly £800 million to the two businessmen to fund a series of deals before bank executives travelled in 2008 to Hong Kong, where they were told SHKP had never given any backing.

Facing questioning from Victor Temple, prosecuting, Mr Kwok, who was forced to stand down as SHKP’s chairman and chief executive in 2008 after a family row, repeatedly denied that signatures on the guarantee belonged to him.

The Hong Kong businessman, who remains a director of SHKP – the second-largest property firm in the world, according to some estimates – denied that a letter purported to be from him to Mr Williams was genuine.

George Carter-Stephenson, for Mr Kallakis, alleged that one of the reasons for Mr Kwok’s removal as chairman and chief executive was that he had carried out deals “without the board’s consent”.

“That was the complaint, but I don’t agree with that,” Mr Kwok replied. He said his brother Raymond had made property investments in Britain for the Kwok family trust. These included retail, commercial and industrial properties, he said, but they were entirely separate from SHKP, even though the Kwok family has long controlled the company.

The majority of the shareholders in SHKP – which attributes around a quarter of all new property sales in Hong Kong in 2011 - favoured restricting their investments to Hong Kong and mainland China, along with one property in Singapore.

Mr Kwok said he had set up a subsidiary company, SHKP International, fearing the name would be grabbed by Chinese businessmen if he did not. Later renamed as China Luck Holdings Ltd, it was not now listed as a SHKP subsidiary, Mr Carter-Stephenson said.

After AIB had travelled to Hong Kong, SHKP lawyers began an internal investigation, sending a detailed memo to Mr Kwok asking if he knew anything about the existence of guarantees.

* This article was amended on November 10th, 2012 to clarify a factual point.