Achilleas Kallakis finally took to the stand today at Southwark Crown court in the trial into an alleged fraud of more than £60m against Allied Irish Bank and Bank of Scotland.
Kallakis and Alexander Williams are charged with 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.
Both men are pleading not guilty
Defence lawyer George Carter-Stephenson QC probed Kallakis on how he came to work with Hong Kong property developer Sun Hung Kai, his thoughts on overriding leases, and how certain documents went missing.
Having started out in the shipping business, Kallakis explained he sought lots of advice and guidance when starting out in the real estate sector.
He told the court he was advised to seek a joint venture partner to convince banks to provide loans for his property acquisitions, including that of 43 Berkeley Square, W1, from BP Pension fund. He was advised to find a AAA tenant to sign an overriding lease on the property.
“I was a bit sceptical at first,” Kallakis told the court. “I didn’t want to do anything that was in the slightest bit unorthodox. I was concerned as to whether it was all above board and about whether the banks would accept and understand the concept.”
However, a deal was struck with SHK.
Under the terms of the deal, SHK would receive 50% of the rental difference between what it was paying and what would actually be achieved in rent. The firm would also get 20% of the net profit achieved when the building was sold.
Kallakis confirmed he had not met any of the SHK directors prior to the partnership, and to date he has still not met them.
When the defence questioned him about entering multi-million pound transactions with a listed company he had not met, Kallakis said: “It worried me immensely It was a concern I voiced again and again,” he told the court.
Kallakis said he requested a meeting, but that his broker did not set up a date.
The accused was also questioned about the whereabouts of a memory stick containing business letters and transaction details from his company, Atlas Management, as well as personal folders.
Kallakis said the memory stick “was lost or stolen” somewhere between Monaco and London when he was travelling back to the UK to deal with Serious Fraud Office raids at his home and 8 Carlos Place.
“My wife called me to tell me and it came as a massive shock,” said Kallakis. “I was in a total state of panic, and a decision was made that I would go home.”
The case continues.
joanna.bourke@estatesgazette.com
