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Businessman accused of fraud insists endorsement from deceased peer was genuine

Achilleas Kallakis tells court letter from Lord Harris of High Cross was not a forgery

Achilleas Kallakis, the Mayfair real estate tycoon accused of building a £750m property empire on forged documents, has told a court he was a “close personal friend” of the late economist Lord Harris of High Cross, who provided a letter endorsing his business credentials.

A letter purporting to come from Harris, best known as the former director of the Thatcherite thinktank the Institute of Economic Affairs, gave the late peer’s address as Montpelier Street, Knightsbridge. The letter had been provided to Bristol & West in advance of a large loan being granted.

In truth, Kallakis told a jury at Southwark crown court, the Knightsbridge address was that of his co-defendant, Alexander Williams. Kallakis, who said Harris had been a friend of his father’s, nevertheless insisted the letter was genuine. “I had understood he [Harris] didn’t want his personal details remitted to all and sundry at the bank.”

Kallakis and Williams deny 21 counts relating to an alleged conspiracy to defraud and forgery between 2003 and 2008. The jury at Southwark crown court has already been told that the two men have a previous conviction from the same court – each under a different name – in relation to a separate forgery conspiracy in the mid-1990s.

After securing multimillion-pound property loans from Bristol & West, which is owned by Bank of Ireland, Kallakis sought financing for bigger commercial real estate deals and was introduced to Allied Irish Banks. He said the bank appeared very keen to do business with him, inviting him to “a lot of little lunches” where they were very pleasant but little of substance was discussed.

“They are anxious to get over to me that they were in the market, were awash with money, were anxious to lend. I think AIB was relatively new to the property finance world and were very, very anxious to build up their loan book.”

AIB eventually provided loans of £740m to fund property investments ultimately controlled by a family trust to which Kallakis, the nephew of Greek shipping magnate Pantelis “Lou” Kollakis, acted as chief adviser and his children were the beneficiaries.

Earlier, the jury heard evidence from AIB bankers who admitted they had accepted hospitality from Kallakis, including a trip to the World Cup final in Germany in 2006 and to the Monaco Grand Prix. Some also told the court they had accepted a three-night trip to Mauritius, offered by Kallakis as a “thank you” for their work on one property deal.

AIB ultimately seized many Kallakis properties and sold them, making a £56m loss.

The prosecution claimed that at the centre of the fraud were allegedly forged rental guarantees purporting to be provided by the Hong Kong-listed company Sun Hung Kai Properties. These bogus over-riding lease commitments from SHKP transformed bank valuations of properties targeted by Kallakis for acquisition, allowing him to access much larger loans.

The court earlier heard evidence from SHKP executives denying the provenance of the guarantees. Nevertheless Kallakis told the jury: “I have no question they were involved in these transactions … I went to extreme lengths, from the first transaction onwards, to ensure the transactions were completed in a proper and complete manner.”

He told the jury that he had been introduced to SHKP by a middleman broker, who had stipulated the two sides must not meet one another. Asked if he thought it unusual that the broker had often requested to be paid in cash, he said he did not.

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