AIB deal ‘gift from heaven’ for property firm

A top London estate agent described AIB’s conduct as “strange” in response to an alleged fraud case.

Achilleas Kallakis and Alexander Williams are accused of more than £60m (€75m) fraud against AIB and Bank of Scotland. Both have pleaded not guilty to 23 counts.

Gary Hersham, MD of residential specialist Beauchamp Estates, which sells some of the most expensive properties in central London, was asked in court about his opinion of AIB’s quick-fire sale in 2008 on a property portfolio it had seized from Kallakis.

The bank had sold the assets it had loaned £740m on, to a subsidiary of Green Property called Kish for £657m. In addition to making a preferential priced loan to Kish, AIB loaned another £100m to cover interest and working capital costs.

Mr Hersham said: “I think Green Property were very lucky. It is a very strange transaction. [Effectively Green Property was getting a] just under £1bn property portfolio with no interest rates and no risks whatsoever.”

He added that some would look at the deal as a “gift from heaven”.

Asked about Mr Kallakis’s skills as an investor, Hersham said he was “shrewd” and “liked to buy a pound for 50p”.

Mr Williams also took the stand and claimed the first time AIB staff met with Hong Kong-based Sun Hung Kai Properties — which was purportedly providing guarantees on the property deals — was Jan 2007.

Mr Williams was at the meeting with two senior members of the bank and a SHKP representative: “I thought the easiest thing to do was to let the bank ask what it wanted. They could discuss whatever they wanted.” The case continues.