Allied Irish Bank hired private detectives to investigate Achilleas Kallakis after being alerted to suspicious activity, Southwark Crown Court heard today.
Kallakis and his business partner Alexander Williams are in court facing charges over an alleged fraud against AIB and Bank of Scotland.
Both men are pleading not guilty.
Donall O’Shea, head of AIB’s British property unit, told the court that the bank was prompted to launch an investigation after “worrying and disturbing news”.
He said a colleague had “contacted me saying he had just received a call from a German bank saying we may have issues with one of our customers”.
He went on: “It was Kallakis, one of AIB’s single biggest customers at that point.”
German bank Helaba told AIB it was concerned about the identity of Kallakis and an alleged previous conviction dating back to the 1990s.
Detective agency Quest was recruited shortly after the phone call in May 2008, O’Shea told the court.
This led to a meeting in Hong Kong on 5 September 2008, where AIB discovered that guarantees it thought it had were not legitimate.
O’Shea said: “without the guarantees, hundreds of millions would be wiped off the value of our security”.
Shortly afterwards, AIB opted to sell the properties in question because it believed this was its best option despite the weak market. “There was a large amount of loans outstanding,” he said. AIB incurred losses of £56m.
Kallakis and Williams plead not guilty to the alleged fraud.
The case continues.
