Queens Moat chiefs suspended as banks agree standstill

THE Queens Moat Houses crisis deepened last night when Martin Marcus, deputy chairman and managing director, and David Hersey, finance director, were suspended from their executive duties with immediate effect.

No further statement was made about the decision to suspend them by Charterhouse, the merchant bank. But it is understood that John Bairstow, chairman of the UK's third- largest hotel company, was behind the decision to suspend his two long- standing colleagues.

On Tuesday, the day before the suspension of share dealings in the leading hotel group, Mr Bairstow is said to have become alarmed that broking analysts' profit expectations of pounds 85m for 1992 would not be met.

A source close to the company's head office in Romford, Essex said: 'Bairstow blew the whistle.' He called a meeting of the company's bankers.

National Westminster and Barclays, the main bankers to Queens, agreed for a standstill on the company's loans yesterday. Bank of Scotland also has a pounds 100m exposure to the heavily borrowed company, arising from two sale and leaseback deals in 1991. The Bank of England is being kept informed.

The source said the directors' suspensions were inevitable, because 'Marcus and Hersey had recently held meetings with analysts'. Seven leading broking houses last month recommended buying Queens' shares.

Their forecasts, the source added, would be 'well adrift' of the actual numbers for 1992, the release of which was scheduled for Wednesday but will now not occur until the completion of an independent audit by Grant Thornton, the chartered accountants. Bird Luckin, a little-known company, has been auditor to Queens for several years.

A City source said he believed severe damage had been inflicted on the company's balance sheet by several events, including a huge drop in the stated value of the company's hotels.

Queens Moat Houses' six non-executive directors are ignorant of the company's problems.

Edwin 'Ted' Lowe, the snooker commentator who joined Queens in 1980, said: 'I don't know what's going on. I won't know until we are called in.'

Small shareholders, meanwhile, want more than the suspensions of executives, particularly because of the recent sale of 1.1 million shares by Mr Marcus at prices of 57p and 57.5p. This year's high was 59p, against the 47.5p suspension price.

Stan Richards, a retired electrical contractor who owned pounds 8,000 worth of shares with his wife, said: 'Marcus ought to go, or sell his shares or give us his money.'