AIB CREDIT officers who approved loans of £740 million to two fraudsters would not have done so had they known the men were using bogus guarantees from a Hong Kong property company, a London court heard yesterday.
AIB lost £56 million by the time bosses realised they were being conned by Achilleas Kallakis and Alexander Williams, it is alleged.
The pair falsely claimed that Chinese property giant SHKP was willing to act as guarantor to the loans and forged documents that were then stamped by unwitting solicitors.
These fake guarantees even increased the value of the properties that Kallakis and Williams purchased, meaning they were loaned almost £100 million more than they paid for them.
The loan applications were approved by a number of committees, before finally being signed off at the top of the chain.
Giving evidence at Southwark Crown Court, Joseph O’Connor, group chief credit officer for capital marketing at AIB, said he approved several of the 16 loans before they went to a “higher” board.
Mr O’Connor chaired a panel that approved a loan for £18.8 million to buy an office block in London’s Euston Road.
He said: “SHKP was absolutely crucial in this property. Without them we certainly wouldn’t have approved £18.8 million on a property that cost £16.9 million – no bank would consider doing that.”
The statements of three other AIB credit officers, who chaired panels that approved several of the loans, were read out to the jury. They all said loan increases would not have been approved had it not been for the SHKP lease.
Former employee Elizabeth Beaty said: “Had the loan been sought without the benefit of the SHKP lease, or had it been known SHKP had not been paying the loans, the increase of the loan sought could not have been sanctioned.
“All three of the loan applications relied on an over-riding lease from SHKP.”
Yesterday the court heard how supposed Greek shipping tycoon Kallakis lavished treats on AIB staff including a trip to the 2006 World Cup final, the Monaco Grand Prix, excursions on private yachts and holidays in Russia and Mauritius.
Both men deny two counts of conspiracy to defraud, 13 counts of forgery, five counts of fraud by false representation, two counts of money laundering and one count of obtaining a money transfer by deception.
The trial continues.
