Barclays' representative threatened to embarrass him, says Aynsley

IRISH BANK Resolution Corporation chief executive Mike Aynsley said a representative of the Barclay brothers threatened to embarrass him after the bank refused to sell them loans secured on shares owned by client Paddy McKillen in the Maybourne hotels in London.

Mr Aynsley said the threat was made after IBRC executive Richard Woodhouse told Richard Faber, the representative of David and Frederick Barclay, in January 2012 that it would not sell Mr McKillen’s loans secured on his 36 per cent stake in the hotels but that it would support him instead.

Mr Aynsley said that Mr Woodhouse was told by Mr Faber that he was going to go out of his way “to embarrass me”. Mr Aynsley was speaking on the publication of IBRC’s interim results.

Mr McKillen and the Barclays are locked in a battle for control of Claridge’s, the Connaught and the Berkeley hotels. The High Court in London ruled against Mr McKillen on a claim that the Barclays had unlawfully bought into the hotels.

Mr Faber denied in a statement last night that any threat was ever made to embarrass Mr Aynsley.

During the case lawyers for a Barclay-controlled firm asked Mr McKillen about text messages sent by Mr Aynsley on January 27th in which Mr Aynsley told him IBRC had chosen to support him rather than deal with the brothers. Mr Aynsley said in the first text he understood the Barclays were “not happy” with IBRC’s decision.

He asked Mr McKillen in a second text to keep the bank’s decision secret as he “can’t have board positions like this leaking out!”

Mr Aynsley said yesterday he believed the texts were introduced by the Barclays’ side in evidence as an attempt to embarrass him.

Mr Faber said the texts were disclosed by Mr McKillen’s legal advisers as part of the legal proceedings, not by the Barclays’ side, due to their relevance to the case.

Mr Aynsley defended the texts, saying they were “appropriate in being able to quickly inform our customer of the bank’s decision to back a consensual restructuring with him rather sell his loans”.

It was reported last weekend that the Oireachtas finance committee plans to invite Mr Aynsley to appear before it to discuss the bank’s decision to reject the Barclays’ offer to buy Mr McKillen’s personal loans and Mr Aynsley’s decision to send the text messages.

Mr Aynsley has indicated a willingness to attend before the committee and to show there was no question in the minds of the bank’s shareholders that IBRC was “acting other than in the public interest” in recovering loans.

Mr Faber said last night that “it was strange that Mr Aynsley should suddenly claim that a threat was made by me.

“It is even stranger that he should do so just days after it emerged that he is shortly to be questioned about his relationship with Mr McKillen before the Oireachtas finance committee.”

Mr McKillen owes the former Anglo Irish Bank €360 million personally, part of which is secured on the hotel shares, while his companies owe almost €1 billion more.

Mr Aynsley said IBRC would not sell his personal loans at 100 cent in the euro if it jeopardised full recovery of the remaining loans.

“We are not prepared to compromise that to enhance the personal net wealth of the Barclay brothers or anyone else,” he said.

Asked whether the bank was too close to Mr McKillen, Mr Aynsley said that he was one of the bank’s largest borrowers and that the bank had to maintain a strong relationship with major clients.

Mr Faber said the Barclays were repeatedly asked to bid – and to raise its bid – to buy Mr McKillen’s loans from IBRC but it was never properly explained why the bank didn’t get the best return for the Irish taxpayer by selling the loans.

“Mr Aynsley would have enhanced the net worth of the Irish taxpayer, not the Barclay family, if he had done this deal,” he said.