The tycoons who own the Daily Telegraph and the Ritz Hotel will today face accusations in the High Court that they led a conspiracy to seize control of three of London’s plushest hotels by illegal means.
Sir David and Sir Frederick Barclay are the principal defendants in a case brought by Paddy McKillen that will effectively determine the ownership of Maybourne Hotel Group, which runs Claridge’s, the Connaught and the Berkeley. One of the allegations is that computer files containing potentially crucial information were wiped from the laptop of Richard Faber, a Maybourne director who has worked for the Barclays for 12 years and is a co-defendant in the case.
However, Mr Faber and the Barclays are expected to refute the allegation in the strongest terms, insisting that they have supplied all relevant material ahead of the trial.
Mr McKillen, who comes from Belfast but is now based in Dublin, owns 36 per cent of Coroin, the parent company of Maybourne. He will argue that the reclusive twins, aided by a coterie of trusted lieutenants, rode roughshod over his rights as a shareholder in an effort to wrest control of the company.
Coroin was set up in 2005 by Derek Quinlan, a former Dublin tax inspector, after he had outbid Prince Alwaleed Bin Talal to acquire the Savoy Group for £750 million.
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Mr Quinlan and his co-investors, including Mr McKillen, sold on the Savoy itself, together with the adjoining restaurant and theatre, to Prince Alwaleed for £250 million, renaming the remaining business Maybourne.
Although the company has continued to trade strongly, some of its shareholders were badly hit by the Irish property crash. At the same time, Nama, Ireland’s so-called bad bank, took control of the £660 million of loans provided to Maybourne in 2006 by AIB and Bank of Ireland.
The Barclays first showed their hand on Maybourne in January 2011 when they acquired Misland, a holding company controlled by the wealthy Green family that owned 25 per cent of Maybourne, for £70 million.
Over the ensuing months, the twins further strengthened their position through a series of moves, acquiring the loans taken out by Mr Quinlan against his 35 per cent stake and buying the 3.6 per cent stake held by Kyran McLaughlin, a wealthy stockbroker.
The brothers then took an apparently decisive step, negotiating with Nama to take over Maybourne’s £660 million of loans. They then made an approach to Anglo Irish Bank with an offer to buy the loans taken out by Mr McKillen against his 36 per cent stake, although no sale has taken place.
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The basis of Mr McKillen’s case is that the brothers acted unlawfully by seeking to sidestep a shareholder agreement giving other investors the right of first refusal over shares being sold by the original investors.
Although Mr McKillen lost a pretrial attempt to have the Misland deal declared illegal, he will argue Mr Quinlan’s stake should have been offered to other shareholders under the pre-emption agreement, potentially allowing him to lift his stake above 50 per cent.
Mr McKillen also claims that Nama was wrong to sell the £660 million of debt to the Barclays, as this breached the loan facility agreement. He alleges that a subsequent plan by the brothers to repay some of the debt via a £200 million rights issue was designed to dilute his equity position.
The Barclays and other defendants are vigorously defending the case, claiming that all their actions were lawful. They have also called into question Mr McKillen’s ability to fund the purchase of more shares in the event that pre-emption right are triggered.