Barclays accused of 'obvious attempt to seize control of hotels'
Tuesday 20 March 2012
The billionaire Barclay brothers were accused of an "obvious and transparent" attempt to illegally win control of three of London's most prestigious hotels yesterday, as a £1.1bn battle kicked off in the High Court.
The case – which will decide the ownership of Claridge's, the Berkeley and the Connaught hotels – is being brought by the Belfast property developer Paddy McKillen, a minority shareholder in Maybourne, which owns the hotels.
He claims his "pre-emption rights" – to have first refusal on buying out any other investors in the hotels – were circumvented by Sir David and Sir Frederick, the secretive, Sark-based magnates who already count the Ritz hotel and the Telegraph newspaper group among their vast business empire.
Mr McKillen's legal team began setting out their case yesterday in a trial set to last until mid-April. Sir David – accused of being a shadow director by Mr McKillen – will not attend in person for "health reasons". Arguments submitted by Mr McKillen said: "The scheme ... is obvious and transparent. It involves the acquisition of the company and to overcome the opposition of Mr McKillen by ignoring or seeking to subvert the rights of pre-emption that protect him."
The row stretches back to 2004 when Mr McKillen was a shareholder alongside Derek Quinlain in Coroin, which bought the Savoy Hotel Group for €1.1bn (£917m), backed by €800m in debt. Coroin then sold the Savoy hotel to Saudi Arabia's Prince al-Waleed bin Talal and renamed the three other hotels under the Maybourne banner.
But in January last year the Barclays gained a foothold in Maybourne by buying a 25 per cent stake from the Manchester businessman Peter Green and 3.8 per cent from the stockbroker Kyran McLaughin. Meanwhile, several of Mr Quinlain's property investments defaulted and his debts were taken into Ireland's bad bank, Nama. The Barclays bought Mr Quinlain's debts from Nama, giving them effective control of his stake and majority control of Maybourne.
The Barclay brothers claim Mr McKillen did not have the financial firepower to buy up the stakes in the hotels, and deny they have acted illegally. "Both Sir Frederick and Sir David deny the allegations against them," said Lord Grabiner QC, for the Barclay brothers, in written submissions to the judge. "It is clear that these serious allegations have been made for tactical reasons, to try to embarrass Sir Frederick and Sir David and to tarnish their reputations."
"It is a fact of life that if you want to be a shareholder of a company with a value approaching £1bn, but you have no money, you are likely to lose out in the end," Lord Grabiner added.
The case will be decided in June.
- 1 I'm A Celebrity 2014: Jungle security stepped up after murder and 'suspicious death' near to camp
- 2 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 3 Jeremy Hunt: 'I took my children to A&E because I didn't want to wait for GP appointment'
- 4 Girl, 7, gets Tesco to remove 'stupid' sign suggesting superheroes are 'for boys'
- 5 This letter from a reader explains why women can’t play football
Sarah Vine criticises lesbian mother Jack Monroe: 'If she was unsure about her sexuality, she should have taken greater precautions'
Black Friday 2014: Opening times for Asda, John Lewis, PC World, GAME and Argos
Three-year-old boy accidentally shoots dead his mother in Tulsa, Oklahoma, as she changes her younger daughter's nappy
Michael Brown shooting: Driver smashes into crowd as protests erupt across the US during a second night of unrest
Jeremy Hunt: 'I took my children to A&E because I didn't want to wait for GP appointment'
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Exclusive: UK approved £7m Israeli arms sales in six months before Gaza conflict
iJobs Money & Business
£16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...
£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...
£Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...
£Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...