THE BILLIONAIRE Barclay brothers never had a plan to eject Belfast-born property developer Paddy McKillen from a company controlling three of London’s top hotels, a Barclay executive said yesterday.
“Removing Mr McKillen was not, contrary to what he alleges, the aim or a necessary part of our thinking,” Richard Faber said in his witness statement, adding that they had made him an offer that would have given him 40 per cent of the holding company, Coroin.
“I had nothing against Mr McKillen personally when we started down this route,” he said, but “to my mind, Mr McKillen has behaved very badly”, reneging on a deal that would have brought in Qatari investors and “making entirely unreasonable demands”.
Mr McKillen alleges that the wealthy brothers improperly denied him the opportunity to buy a proportion of the shares held by financier Derek Quinlan in the company, which controls Claridge’s, the Connaught and Berkeley hotels.
In a text message sent last year to Mr Faber, David Barclay wrote: “Richard, I saw The Irish Times. The bit they are missing is we have purchased Derek Quinlan’s shares by way of a contract as well as holding the debt.
“Paddy is a liar. He knows his pre-rights are not ownership but just a right of first refusal. Have a good day. DB.”
Mr Quinlan was not “a stooge” of the Barclays, said Mr Faber, “ was his own man, even if he was in an alliance with us.
“While we certainly had him in a very strong position, given that we owned the former loan.”
He defended the purchase of Mr Quinlan’s debt from Nama: “Again, I see nothing wrong in any of this: it is all a perfectly legitimate way of trying to take control over Coroin, which is what we have all along been trying lawfully and effectively to achieve.
Earlier, Liam Cunningham, who works with Mr McKillen, told the London High Court there was “panic in the boardroom” of Coroin when it was learnt, with an hour’s notice, that Nama was selling its £660 million debt to the Barclays.
It also emerged that Sir Frederick Barclay is refusing to come to court to give evidence, even if he were ordered to do so by the court, while his brother, Sir David, says he is too ill to do so, following an operation in September.
In his witness statement, Mr Faber said Mr Cunningham had said that Mr McKillen would not enforce his rights to buy a share of Mr Quinlan’s holding if the Barclays paid him £35 million.
Mr Cunningham, said Mr Faber, “had his head in the sand in believing Nama would necessarily extend the loan, rather than sell it or call default”, or that Nama would offer two-year lending.
Mr McKillen claims that the Barclays breached a shareholder agreement to buy their stakes in the company and had bought the Coroin’s debt to put pressure on him as a shareholder.
The company’s debt facility was transferred in September last year.Under questioning from Nama’s barrister Robin Dicker QC, Mr Cunningham said a Nama representative refused to allow the board longer than an hour to review the sale and give their views on it.
He said that the company request for a two-week delay in the loan transfer, for them to “get their head around the deal” was denied.
He said: “Nama said that was impossible and the sale would proceed. Obviously there was quite a state of panic in the board.
“We had no idea this transaction was going to happen and some time to seek advice would have been beneficial,” he said.
