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Barclays 'acted unlawfully' in plush hotel firm takeover bid

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Patrick McKillen arriving at the High Court in London yesterday

Patrick McKillen arriving at the High Court in London yesterday

Patrick McKillen arriving at the High Court in London yesterday

RECLUSIVE businessman Paddy McKillen has claimed the billionaire Barclay brothers, who own the Telegraph newspapers, used unlawful tactics during an attempt to take over a company that controls some of London's most high- profile hotels.

The Belfast-born developer was in London's High Court yesterday for the beginning of a long-anticipated showdown, giving photographers a chance to get their first photo of Mr McKillen in 20 years.

Mr McKillen's counsel yesterday alleged that there were "undisclosed arrangements" between David and Frederick Barclay and former tax inspector Derek Quinlan, who is one of the founding shareholders in the investment company that owns the hotels.

Mr McKillen is suing the Barclay brothers over their attempts to take over the company, Coroin, which owns the five-star Claridges, Connaught and Berkeley hotels.

Grievances

The Irish businessman owns 36pc of the £1bn (€1.2bn) company while the Barclays have 64pc, having acquired the debt secured on Mr Quinlan's shareholding from the National Asset Management Agency (NAMA) to add to their existing shareholding last year.

During opening submissions in what is expected to be a three-week trial, Philip Marshall, for Mr McKillen, said actions by the brothers had infringed his rights under shareholders' agreements.

He claims actions by them amounted to "unlawfullness" and "unfairly prejudicial conduct".

The claims are being contested by the Barclays, also well-known for their reclusive nature, who claimed yesterday that the action was a "public platform for private grievances" and that Mr McKillen's actions were no more than mud-slinging in an attempt to make them back down.

The court heard Coroin was set up in 2004 to buy the hotels after which Mr McKillen was the "most active shareholder", according to his counsel who said the value of the hotels went from £530m to £985m.

Mr McKillen is claiming Mr Quinlan's 35pc stake should have been offered to him under a clause in shareholders' agreement of the company.

He wants a court ruling that he has the right to buy the remaining shares in Maybourne Finance Ltd, the holding company the Barclay brothers used to buy the loans from NAMA.

It is expected that Mr McKillen will take to the stand this morning to give evidence.

The court heard there had been "undisclosed arrangements" between the brothers and Mr Quinlan and "very substantial sums" had been paid by the Barclays for the benefit of Mr Quinlan and his family.

Mr Marshall said that from January 2011, Mr Quinlan did nothing "contrary to the instruction or wishes of the brothers".

Anthony Grabiner, for the Barclays, described the claim by Mr McKillen as "hopeless" and a "tactical play". He said Mr McKillen knew how much his clients liked their privacy and expected them to back down, but this would not be the case.

Mr Quinlan's counsel Stephen Auld said his client had "worked tirelessly" for the company for many years and the suggestion he should ignore guiding instructions of NAMA to sell the assets was "ridiculous".

Council for NAMA Robin Dicker said the agency was not involved in the dispute between Mr McKillen and the Barclays, save to hold up the validity of the transaction.

It is expected Mr Quinlan will take to the stand at the end of the month. Neither of the Barclay brothers are expected to testify with David Barclay saying he was too ill to attend.

Irish Independent