Blog Archives

Fraud saga acts as a costly lesson for all financial regulators

It may seem like a stretch but there is a direct correlation between the AIB annual general meeting in 2001 and the conviction of fraudsters Achilleas Kallakis and Alexander Williams in the Southwark Crown Court yesterday.

Twelve years ago the country’s biggest bank had its annual gathering in the RDS. The shareholders were restive. They lacerated the management team for letting the arriviste Anglo Irish Bank eat its lunch. The latter’s profits were surging on the back of runaway property lending.

After the very public dressing down, AIB chief executive Michael Buckley and his fellow senior executives, decided on a change of tack — one that would prove fatal. They might have come to the party late, but there was a lot of money to be made from the gravity-defying property markets and the Ballsbridge-headquartered bank intended to cash in.

Of course the drawback of playing catch-up is that it encourages a much greater risk-taking culture. Nothing else could explain the credulity-defying events that led to Kallakis and Williams receiving prison sentences of seven and five years respectively.

Through a series of outrageous lies they extracted £740m (€884m) from AIB’s London office over a five-year period. They also swindled Bank of Scotland out of £26m.

Handing down the sentences, Judge Andrew Goymer said: “AIB and Bank of Scotland have undoubtedly acted carelessly and imprudently by failing to make full inquiries before advancing the money. Indeed the latter bank was given clear and precise warnings by its lawyers about the risks of accepting assurances in a letter from an alleged co-conspirator, a Swiss lawyer.

“It almost beggars belief senior management chose to disregard that warning and rushed to complete the deal at all costs. It is apparent from the evidence both the defendants took full advantage of the prevailing banking culture in which corners are cut, and checks on them superficial and cursory. The banks do bear some degree of responsibility for what happened.”

AIB declined to comment on the verdict.

The obvious question is how could AIB advance so much money to one source without doing proper due diligence? It points to completely inadequate risk management controls in place at the time.

One senior banking source said that when the cracks started to appear in the financial system in 2007, Anglo Irish Bank and AIB were still very active in London at the same time that other banks were rowing back significantly on their lending operations.

The two fraudsters’ elaborate ruse was finally rumbled when AIB tried to sell on one of their loans to the German bank Helaba. Helaba did a few cursory background checks and found out that the pair’s property empire was built on a tissue of lies.

Kallakis and Williams, or Stephan Kollakis and Martin Lewis, to give them their real names, had created a web of several opaque offshore companies to guarantee AIB loans. Not that along the way AIB London executives shouldn’t have picked up on a few clues that all might not be what it seemed.

Kallakis claimed the Hong Kong investment firm Sun Hung Kai Properties was guaranteeing one of the loans, however, if anybody from AIB contacted the firm then the guarantee would become null and void.

Lured by the promise of spectacular returns from a pair of snakeoil salesmen, the Irish bank could not help itself.

AIB won’t comment on what lessons it has learned from this saga, but presumably it has beefed up its due diligence procedures. The level of exposure to any one lender is another painful lesson to be learned. How to spot irrational behaviour fuelled by a completely unsustainable asset bubble is a lesson not just for AIB management, but also financial regulators in Ireland, the UK, the eurozone and across every Western economy.

via Fraud saga acts as a costly lesson for all financial regulators | Irish Examiner.

via Fraud saga acts as a costly lesson for all financial regulators | Irish Examiner.

Kenny accepts latest interest rate hike difficult – but won’t stop it – National News –


TAOISEACH Enda Kenny says the Government accepts the latest mortgage interest rate rise by AIB will be “difficult and challenging” for homeowners.

But he refused to step to block the second hike by AIB in two months.

The State-owned bank announced last week it would be raising its interest rate by 0.5pc to 4pc – two days after the bank paid €1bn to senior unsecured bondholders.

The move affects the bank’s 70,000 variable-rate customers, will see already-struggling homeowners coughing up an extra €1,222 a year for a standard €200,000 mortgage. Fianna Fail leader Micheal Martin said the rate increase will “bleed the ordinary householder across the country”.

Mr Kenny said the decision was made by the AIB board.

via Kenny accepts latest interest rate hike difficult – but won’t stop it – National News –

via Kenny accepts latest interest rate hike difficult – but won’t stop it – National News –

Banks working on new plan to solve crisis

Top management in both AIB and Bank of Ireland are reading the Old Testament to get them out of the current economic crisis.

Apparently, they have heard it’s where prophets are to be found

If you are looking for a loan please do not walk into the bank with a copy of the New Testament as it is viewed with suspicion

90 +Wines in dublin

With a critical score of 90 points+


The Casual Way to Discuss Movies


...because it was never black & white


Trying to live a creative life


Movies, thoughts, thoughts about movies.


Saving you from one cinematic disaster at a time.

From 1 Blogger 2 Another

Sharing Great Blog Posts

Wonders in the Dark

Cinema, music, opera, books, television, theater

Just Reviews

Just another site

Mark David Welsh

Feeding Soda Pop to the Thirsty Pigs since 2013


Things I never thunk before.

News from the San Diego Becks

The life and times of Erik, Veronica and Thomas

The Silent Film Quarterly

The Only Magazine Dedicated To Silent Cinema

Leaden Circles

First a warning, musical; then the hour, irrevocable. The leaden circles dissolved in the air.

My Archives

because the internet is not forever


Up to the minute, fair, balanced, informed film reviews.


A Shrine to Pop Culture Obsessiveness. With Lots of Spoilers

Thrilling Days of Yesteryear

“Nostalgia isn’t what it used to be” – Peter DeVries


Viewing movies in a different light

Twenty Four Frames

Notes on Film by John Greco

Suzanne's Mom's Blog

Arts, Nature, Good Works, Luna & Stella Lockets & Birthstones

It Doesn't Have To Be Right...

... it just has to sound plausible

Rich Green Photography

The life of a photographer who likes to shoot just about anything.


A French girl's musings...

Jordan and Eddie (The Movie Guys)

Australian movie blog - like Margaret and David, just a little younger

Octopus Films

A place for new perspectives on films, TV, media and entertainment.

scifist 2.0

A sci-fi movie history in reviews

The Reviewer's Corner

The Sometimes Serious Corner of the Internet for Anime, Manga, and Comic related things

First Impressions

Notes on Films and Culture

1,001 Movies Reviewed Before You Die

Where I Review One of the 1,001 Movies You Should Watch Before you Die Every Day

Movies Galore of Milwaukee

Movie Galore takes a look at Silent films on up to current in development projects and gives their own opinion on what really does happen in film!

The Catwing Has Landed

A Writer's Blog About Life and Random Things

Gabriel Diego Valdez

Movies and how they change you.

The Horror Incorporated Project

Lurking among the corpses are the body snatchers....plotting their next venture into the graveyard....the blood in your veins will run cold, your spine tingle, as you look into the terror of death in tonight's feature....come along with me into the chamber of horrors, for an excursion through.... Horror Incorporated!

Relatos desde mi ventana

Sentimientos, emociones y reflexiones

Teri again

Finding Me; A site about my life before and after a divorce

unveiled rhythms

Life In Verses

Gareth Roberts

Unorthodox Marketing & Strategy

leeg schrift


100 Films in a Year

12 months. 100 films. Hopefully.

%d bloggers like this: