Case gives rare insight into McKillen's financial affairs

ONE OF the most interesting aspects of Paddy McKillen’s legal action against the Barclay brothers is the rare insight it provided into the financial affairs and business dealings of the Belfast-born developer.

McKillen’s personal financial affairs were thrown into the spotlight after Mr Justice David Richards refused McKillen’s application to give evidence behind closed doors.

On Thursday – day 22 of the trial – the court heard McKillen has “a portfolio of assets across the world”. This includes stud farms in Argentina and Kazakhstan, property investments in the United States, Dubai, Ireland, England, Germany, villas in the south of France, and more than a dozen properties in Vietnam.

McKillen told the court he has received a verbal offer from Deutsche Bank to refinance £130 million (€162 million) in loans related to his share of the Jervis shopping centre – a glimpse of the ongoing financial machinations taking place behind the scenes as the developer seeks to move his loans out of IBRC, which is in wind-down mode. The last few days also provided an insight into McKillen’s astonishing network of financial and political connections.

While Tony Blair may not have quite the same rock-star credentials as Bono, who last month was revealed to have been present when McKillen and Derek Quinlan settled the sale of London’s Savoy Hotel aboard a yacht in the south of France, Blair’s mention yesterday raised some eyebrows.

McKillen’s dealings with financiers from across the globe as he sought to raise finance to purchase a further stake in the hotel group was the subject of much of the hearing this week. Among the friends who McKillen said “would have delivered” financially were Bahamas resident investor Joe Lewis, an associate of Dermot Desmond and John Magnier, and Denis O’Brien, “the world’s greatest telecom entrepreneur”, as McKillen described him.

The court heard details of how, throughout 2011, McKillen interacted with some of the world’s wealthiest investors and private equity houses in his bid to secure finance. Among these were Och-Ziff, the US hedge fund which is believed to have been involved in the short-selling of Irish financial stocks in 2008. The court heard that Tom Browne, former head of lending with Anglo Irish Bank introduced McKillen to Och-Ziff. The court had previously heard that Browne had helped arrange the original loan for the redevelopment of the Connaught hotel.

McKillen also held discussions with Singapore tycoon Ong Ben Seng, the owner of the Hilton in Singapore and the Metropolitan Hotel in Park Lane in London.

Other names mentioned during evidence included Walter Kwok, the billionaire owner of the Four Seasons and IFG in Hong Kong.

The court heard Kwok has since been arrested on alleged charges of corruption. Overall, however, it is Paddy McKillen’s relationship with IBRC that is perhaps most interesting. During the hearing on Thursday McKillen repeatedly stressed the strength of this relationship, noting that he is in text contact and speaks once a week to chief executive Mike Aynsley.

As an insight into the interaction between banks and their most heavily indebted customers, it is McKillen’s evidence in relation to the nationalised IBRC that gives most food for thought.