THE BARCLAY brothers paid €500,000 under a “gentleman’s agreement” to financier Derek Quinlan to let them know if anyone made an offer on his stake in three landmark London hotels, a court heard.
The payments were made a few months before the Barclay brothers purchased a 25 per cent stake in Coroin – the £1 billion company which owned Claridge’s, the Berkeley and Connaught hotels.
Email exchanges between representatives of Sir David Barclay and Mr Quinlan revealed that Sir David made the October 2010 payment as a “gentleman’s agreement” to “help a friend in need”.
Ownership of Coroin and the Barclay brothers’ subsequent attempt to buy Mr Quinlan’s stake in the company is the subject of a London High Court case between the billionaire twins and fellow Coroin shareholder, Patrick McKillen.
Mr McKillen alleges the payments to Mr Quinlan were an inducement to sell his stake in the company to the brothers in a secret deal last January. He accuses them of breaking a shareholder agreement and “infringing his rights” as a director and shareholder in the Coroin.
In emails read out yesterday, Sir David said there was no “paper work” for the payment but a gentleman’s agreement that Mr Quinlan would give the Barclays an opportunity to buy his stake before selling to a third party.
At the time, Mr Quinlan was in dire financial trouble following the collapse of the property sector in Ireland and the collapse of his company. In court, senior Barclay brothers executive Richard Faber – Sir Fred Barclay’s former son-in- law – denied Sir David had any “formal agreement” with Mr Quinlan.
Mr Faber said it was unlikely a binding deal had been reached in October 2010, adding that he had chased Mr Quinlan for two days to convince him not to sell his stake in the hotels after the Qatari royal family made a bid in January 2011.
In his witness statement, Mr Faber said he only learnt of the €500,000 payment when Sir David disclosed it in February 2011 to Government agency Nama.
He said: “It was not a matter I would necessarily have expected to have known about, since it was a personal matter. (I did not know until very recently that Sir David had lent further sums to Mr and Mrs Quinlan.)”
After reading the emails, Philip Marshall QC, representing Mr McKillen, put it to Mr Faber that the money was not a “gift or loan” but a payment for the service of informing the Barclay brothers if he received any other offers.
Mr Faber said: “I disagree. It is entirely possible that Sir David would have gifted or loaned the funds, but there are no documents to say which.
“What I can’t make head or tails of is, if we had some type of deal, why I had chased Mr Quinlan around London and Switzerland for two days to get him to sign a one-page exclusivity deal.”
Mr Marshall also accused Mr Faber of making up an allegation in his witness statement that he found Mr Quinlan’s “house in a state” after Mr McKillen or his representatives had put pressure on the Quinlan’s to sign a deal with the Qataris in January last year.
Mr Marshall said: “That is pure speculation on your part. . . Where did you get that from?” Mr Faber responded: “I can’t recall but . . . I believe it to be the case.”
The case continues.
