The Republic of San Marino is awaiting the outcome of a Serious Fraud Investigation into a £56m alleged property fraud by shipping tycoon Achilleas Kallakis before deciding if it should suspend him as ambassador.

Kallkais, who allegedly used forged guarantees in order to overvalue properties, has been ambassador to the Sultanate of Brunei for the tiny European state with the embassy operating from his offices at 8 Carlos Place.

A spokesman for the government told Property Week that the state would ‘take the appropriate actions’ if Kallakis was found to be guilty of any wrong doing.

Two weeks ago Property Week revealed that Kallakis was being investigated over the alleged fraud in relation to properties he had bought with debt from Allied Irish Bank.

Kallakis’s offices and home were searched by the City of London Police and the SFO as a part of the investigation.

The investigation relates to guarantees on a number of leases within Kallakis’s £1bn property portfolio.

Last year Allied Irish Bank transferred a the majority of these assets, including the Telegraph newspaper’s headquarters at 111 Buckingham Palace Road, to Stephen Vernon’s Green Property.

It has also emerged as a part of a Property Week investigation that Kallakis has a previous conviction for selling fake peerages to wealthy Americans. At the time he went by the name Stefanos Kollakis.