AIB's new boss faces a grilling today over how his bank loaned over £700m (€774m) to a Greek tycoon who is charged in London with fraud, forgery and money laundering.
Colm Doherty faces questions over what checks were made on poker-playing Achilleas Kallakis, who called himself 'the Don', before the bank approved the loans for a string of plush London properties he bought.
The portfolio included buildings which housed the 'Daily Telegraph', parts of the Metropolitan Police, the UK Home Office's asylum processing centre and Orion House, the tallest building in London's Covent Garden.
Mr Doherty will make his first public appearance as AIB managing director this morning when he will have to unveil about €5.3bn of bad loan losses for 2009 and the bank's first ever annual loss.
AIB's UK corporate banking arm, which extended the loans, ended up booking a £56m loss on the loans in its 2008 accounts.
That loss was recorded after the bank seized the properties and sold them on to Dublin-based Green Properties.
Mr Doherty was ultimately in charge of the corporate banking business that extended the loans between 2003 and 2007, as then-head of AIB's capital markets division.
Mr Kallakis and Alexander Williams were each charged yesterday at the City of London Magistrates' Court 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.
It stands as one of the largest such property cases ever investigated by Britain's Serious Fraud Office (SFO).
During 2008, AIB became aware of problems with an element of its security interests in the so-called Kallakis portfolio. However, news of the alleged scam only broke the following March, when it emerged that the SFO had launched an investigation into it.
The probe centred around claims that money had been borrowed, based on fraudulent documents showing leases to tenants in the properties had higher rents and were signed for longer periods than actually was the case.
AIB boss faces quiz over €774m loan to tycoon - Irish, Business - Independent.ie
What in God's name were these people thinking......or were they tipping on head shop stuff????