The deals include the sale of the Holiday Inn Hotel in Frankfurt and the Queens Hotel in Heidelberg to partnerships comprising Gerard Bell, Peter Bertholdt, J Mannes and a German notary for DM124m. Mr Bell and Mr Bertholdt were Queens Moat directors and Mr Mannes finance director of a German subsidiary.
The partnerships immediately leased the hotels back to a Queens Moat subsidiary. Further transactions changed the lessee of 11 Holiday Inn hotels in Germany and then sublet them back to the original company, QMH Management.
In a transaction apparently backdated to the end of last year Mr Mannes bought QMH Management for DM1m, or less than a quarter of its net assets.
Mr Mannes was also involved in a DM146m deal in which five German hotels were sold to Phoenix Hotelinvestitions, in which he had an interest. Queens Moat is still waiting for DM34m from Phoenix.
John Bairstow, Queens Moat's former chairman, said yesterday that the sales were done at prices at or above the values attributed to the properties by Weatherall Green & Smith. Queens Moat's new management has rejected this valuation in favour of a rival and much lower estimate from Jones Lang Wootton which has wiped pounds 1.3bn off the value of the group's properties.
He said the use of the 'Frankfurt' and 'Heidelberg' partnerships was a device to allow Queens Moat the option to buy the hotels back. Mr Bairstow said he insisted that Queens Moat should have this right but only learnt details of the transactions later.
He said the German banks that financed the deals would have had the hotels valued, providing further support for the Weatherall valuation.
In the accounts the new directors, led by Stanley Metcalfe and Andrew Coppel, said they subjected the JLW valuation to lengthy and detailed examination. However, they did not sufficiently understand the Weatherall valuation to provide a full explanation of the enormous decline.
The accounts say John Williams, Queens Moat's former property boss, received a bonus of pounds 1.2m in 1991 which remained undisclosed because it was treated as part of the payment for Mr Williams' firm, bought in 1988.
Mr Bairstow said this was part of an earn-out arrangement. Mr Williams said his firm made pounds 28.5m for Queens Moat over five years.Reuse content