Strange the stories that get attention, and stranger still those that don’t.
The IT carried a very disturbing report yesterday by Gretchen Friemann into massive loans AIB gave to a Greek fraudster, Achilleas Kallakis, who is under investigation by the British Serious Fraud Office. AIB claim they sufferedly only a relatively small loss – £56 million - and this was because AIB took control of the properties and sold them on to Green Property.
The mystery is the price Green Property is supposed to have paid for these properties.
Green Property bought the properties in November 2008 when the British property market was in crisis - commercial property values in the UK were estimated to have slumped by 35.5 per cent from their summer 2007 peak. Bizarrely, however, land registry documents show a number of Kallakis’s assets were sold on by AIB for roughly the same price Kallakis had paid at the height of the boom.
i have flagged it here before, but pinsters are more imbued with blood lust and a “maul the man” mentality than interested in addressing the real issues - where the financial shenanigans are happening.
This was a “smoke and mirrors” deal so as the bank would not have to declare the real loss and to hide the situation from the rest of us. Sweetheart deals where the new borrowers get soft loans without recourse, putting the loan in deep freeze to be dealt with some time way in the future when its gone quiet and people’s eyes are off the ball… we are going to see a lot of this in the future. There are several brewing at the moment and they need to be “outed”. But we would rather throw eggs and wish for heads on pikes, acting like kids at pantomime villains. We haven’t seen the really fraudulent activity yet. It’s just about to begin.
Don’t think it was quite the biggest because the assets are worth something.
The fraud was against the shareholders who still held pretty worthless shares at the time and would have been absolutely worthless had thsi come out. It was most likely perpetrated by the auditors who did not ‘recognise’ the isle of man SPV loan terms to Green …not even now. It is even possible that the IoM SPVs were created to circumvent a proper audit.
Whether John Hurley had a hand in the creation of the SPVs is the other interesting bit, based on his uniquely dismal record then most likely yes he did.
What we largely saw to date was blind greed and incompetence…
what we will see going forward will of course be of a much more devious nature…
The problem is that this stuff is harder to get to the bottom of.
Remember that AIBs new chief was the one who approved the purchase of AIB shares through the Furstenburg account with Goodbody.
When you see a chappy like this get the top seat you know precisely where AIBs intentions lie.
Yeah my gut feeling is there’s more to come out alright. One specific story I heard about a senior manager in a bank has not come out yet (not AIB, not Anglo, and not INBS) - although it came indirectly from a rival bank manager, so there may have been an agenda.
Property Week did some good running on this back then - if you’re interested you can read stuff in the archive. propertyweek.com, search for Kallakis - I was talking to the editor a bit at the time, again there were legal issues
If and when charges are brought i think you’ll see follow up