View from City Road: Rose is thorn in Barclays' side (CORRECTED)

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The Independent Online

THE curse of the Rose Theatre has struck Barclays, and might yet bring down its chairman-designate, Andrew Buxton. The disastrous tale of losses on lending to Imry, confirmed yesterday, centres on Rose Court, the building on the South Bank of the Thames that sits on the bones of an Elizabethan theatre.

Rose Court was built against the protests of the late Dame Peggy Ashcroft and scores of other celebrated actors and actresses who demonstrated on the site for preservation of the remains.

They lost, the theatre was buried under a pile of gravel and riven by concrete piles, but the building above is now an empty monument to the property boom, echoing with unanswered questions. It is also Imry's worst problem.

The sheer scale of Barclays' exposure to Imry looks extraordinary to every other banker in London - eight times as much as it lent to Canary Wharf, and with no attempt to syndicate to other banks, which would normally be routine. The first phase of the loan, of nearly pounds 200m, is exceptionally large for a single transaction with a firm that was never a blue chip property developer. Yet Barclays proceeded to throw good money after bad.

The bank's protestations that it was all handled in a routine way through normal credit committees are ingenuous: something that size must have been driven from the top. Was Mr Buxton, former managing director and now chief executive and chairman-designate, responsible? Barclays denies he played the key part. And if a loan of that importance to the bank was not organised from the top, why wasn't it? Either way, shareholders deserve a far better explanation of Mr Buxton's role. If it was his fault, he should not become chairman.

Barclays has now taken over Imry, which the bank believes ensures that it will share in any rewards from a property recovery. Equally, it conveniently keeps the lid on the affair. Most of those who produced the mess - Barclays and the property developers - are still there running it. Shareholders should be told where the bodies are buried.

Until the questions about Imry are answered more convincingly, shareholders can draw only one conclusion: there is a serious risk that this is not a pounds 440m aberration, that it reflects the standards by which other large property loans were made, and that Barclays' pounds 8bn of property and construction lending is in even worse shape than feared.


Rose Court is not the worst of Imry's problems, contrary to the statement in View From City Road on 18 December. Imry and Barclays Bank said their exposure to the building, still empty, ended in 1989. Imry also said piles did not go through the theatre, as stated, but around it.