Achilleas Kallakis came to the defence stand for the first time today, and claimed that he did not personally stand to benefit from Allied Irish Bank loans for prime property purchases.
Kallakis and his business partner Alexander Williams are facing charges over an alleged fraud against AIB and Bank of Scotland.
Both men are pleading not guilty to the charges.
Speaking at Southwark crown court today, Kallakis said that under the helm of Swiss lawyer Michael Becker, he was chief adviser to the Heritage Syndicated Trust – which snapped up prime London assets – rather than the beneficiary of the trust.
“All of the special purpose vehicles used to purchase properties, were held by the trust, and the beneficiaries of the trust were my children, not me,” he said.
He added that AIB was “explicitly explained to”, that only the trust beneficiaries would profit from transactions.
However, it was revealed at court that for his advisory role to the trust he would be paid $700 (£457) daily “once the trust was generating income”.
Kallakis’ uncle provided a loan and equity for the trust’s first venture into real estate in 1999. The first purchase was 2 Brompton Square, SW3, bought for £1.35m with the intention of refurbishing it for profit.
The decision was then made that commercial conversions would be more profitable than residential ones.
Kallakis said Becker had the final say in business decisions: “If we were going to commit the trust to large loans, then Becker said we would have to stick to three rules.”
The rules were: “triple-a” standard locations in London only; no leaseholds, only freeholds; only buildings that could be done-up to increase their value could be purchased.
The case continues.
joanna.bourke@estatesgazette.com
