Team is sent in to QMH: Accountants will investigate company

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The Independent Online
BANKERS concerned about the financial crisis gripping Queens Moat Houses have sent in a team of independent accountants to investigate the heavily borrowed hotel company.

Grant Thornton, the chartered accountancy firm, was hired on Wednesday night, just hours after the shares in one of Europe's largest hotel operators were suspended on the stock market, according to banking sources.

The accountancy team was also understood to have moved into Queens' head office in Romford, Essex, early yesterday. The identity of the bank behind the investigation into the 200-strong hotel chain, headed by John Bairstow, remains unknown.

National Westminster and Barclays are the main bankers. They have postponed a refinancing deal, based on a DM750 (pounds 313m) syndicated loan, until the position becomes clear.

Bank of Scotland is also exposed through pounds 100m of sale and leaseback deals made for Queens in 1991.

Queens' directors remained locked in talks with its bankers throughout the day. The company, however, paid yesterday's pounds 10.25m due on its 10.5 per cent debenture stock.

Investors are becoming increasingly resentful about the silence surrounding Queens. 'Heads will surely roll for this,' one said.

Martin Marcus, the joint managing director, 'was sure to come under great pressure,' he added. Mr Marcus sold 1.1 million Queens shares in February, just days before the two-month close season for directors' dealings before the release of financial results. Queens' figures for 1992 are due next Wednesday.

Another investor, who also declined to be identified, expressed concern about the make-up of the board of directors. He said particular questions would have to be asked about the role of the non-executives, and whether they should be replaced.

The six non-executive directors include Maurice Hart, a former senior partner at Bird Luckin, the company's auditors.

John Maddern, another non-executive, was formerly executive chairman of the Saxon Inn hotel chain, part of the Furness Withy Group, until it was bought by Queens in 1983.

Other non-executives are Edwin 'Ted' Lowe, the TV snooker commentator, and John Gale, a former UK area director of NatWest's domestic banking division. NatWest has been banker to Queens since 1973.

Bruce Rhodes of ProNed, the Bank of England and Stock Exchange-sponsored promoter of the use of non-executives, believes it would not be 'best practice' if any of them had prior direct involvement with the company.