Ronald Quinlan: Cold revenge as McKillen grilled in hotel legal battle
Irish developer endures Barclays' cross-examination in fight for London top hotels, writes Ronald Quinlan
QUEENSBURY rules were dispensed with weeks ago. When Paddy McKillen sat into the witness box at London's Royal Courts of Justice last Thursday to be cross-examined on the details of his personal finances, it was bare-knuckle boxing all the way from Queen's Counsel for the billionaire Barclay brothers, Kenneth MacLean.
With the future of three of London's most celebrated institutions -- Claridge's, the Berkeley and Connaught hotels -- at stake, lawyers for David and Frederick Barclay are clearly determined to employ any means necessary to oppose Mr McKillen's bid to have Nama's sale to them of €790m of loans associated with the Maybourne Hotel Group overturned.
With the first three weeks of this titanic legal battle variously dominated by frequently embarrassing revelations in relation to their dealings with and financial support for the former high-flying financier Derek Quinlan, last Thursday and Friday, counsel for David and Frederick gave Mr McKillen a serving of cold revenge.
Looking distinctly uncomfortable for much of his time under Mr MacLean's microscope, Mr McKillen nonetheless kept his composure, and took his time to respond slowly, carefully and quietly to everything that was put to him about his global property portfolio, his relations with his banks and most intriguingly, his friendship with former British prime minister Tony Blair.
Given Mr McKillen's near legendary penchant for privacy, it must have made for a positively excruciating ordeal. For his opponents, it was all grist to the mill judging by the frequency with which several of their lawyers snorted and sniggered out loud at any response which they felt deserved the derision of the court. Mr Justice David Richards, for his part, remained above the unseemly fray throughout the proceedings.
Last Thursday, the court heard, for instance, how the Belfast-born property investor owns stud farms in Argentina and Kazakhstan as well as prime commercial and residential properties in Ireland, the US, Dubai, England, Germany, Vietnam and villas in the south of France.
Arguably more difficult for Mr McKillen to contend with was Mr MacLean's absolute determination to extract from him the names of all the wealthy businessmen, potential investors and, in one case, the high-profile politician he had contact or dealings with in relation to the Maybourne Hotel Group.
Among the friends and associates who Mr McKillen said "would have delivered" financially were Denis O'Brien, a man whom he described as the "world's greatest telecoms entrepreneur", the hugely wealthy British businessman John Caudwell and the Bahamas-based investor Joe Lewis, who is an associate of Dermot Desmond and John Magnier.
Sprinkled elsewhere in Mr McKillen's two-day cross-examination were numerous other incidental details of his lifestyle including his use of a private jet and the home he maintains in Santa Monica in California.
When those things were taken -- as they were by Queen's Counsel for the Barclays -- alongside the €370m the Belfast businessman said he still owed the Irish Bank Resolution Corporation (IBRC), formerly known as Anglo Irish Bank, the Bank of Ireland and Bank of Scotland (Ireland), the optics, as they say, were not good.
Indeed, as Mr MacLean got into his stride last Thursday, those in court could easily have been forgiven for thinking that the case wasn't about the future of the Maybourne Hotel Group at all, such was his seeming disgust at Mr McKillen's lavish lifestyle in the face of such massive debt, a debt he stressed repeatedly was owed to the Irish taxpayer given how the IBRC is a State-owned institution.
Warming to his theme, Mr MacLean questioned Mr McKillen on his relationship with the IBRC and more particularly its chief executive Mike Aynsley.
When the Belfast businessman described it as "excellent", saying he tried to meet with Mr Aynsley at least once a week, Mr MacLean raised the matter of a meeting between the two men in the Connaught Hotel on December 15 last to drive home the suggestion that their professional relationship might be just a little too comfortable -- for the good of the Irish taxpayer at least.
In his defence, Mr McKillen stressed how all his loans were performing and that he hadn't missed an interest payment in 35 years of doing business. Where any payments were not being made on loans, this was because those loans were in the normal process of being refinanced, he added.
There was no let-up for Mr McKillen when he returned to the witness box last Friday morning as Queen's Counsel for the Barclays took the opportunity to explore his relationship with Mr Blair, a man who he said he had first met at the World Economic Forum in Davos in 2006.
In the case of Mr Blair, the court heard how Mr McKillen had first sought his advice in 2010 when there was a possibility of the Maybourne Hotel Group's loans going into Nama.
Asked what Mr Blair had said to him on this occasion, Mr McKillen said: "His advice was that he would think about any ideas that would be helpful to the company regarding the Nama transfer. That was it."
A subsequent email from Mr Blair's consultancy firm, Blair & Associates, suggested that Lord Myners, the then-UK financial services secretary, and Jonathan Powell, Mr Blair's former chief of staff, could be called upon to assist.
"If Lord Myners is able to take this forward, then Jonathan is more than happy to work with you on ensuring that they [the issues] are communicated to the right people," the email read.
Asked if the matter had been referred to the Department of Finance here, he said: "It could have been."
Mr McKillen insisted that he didn't follow up on the email, saying: "As far as I was concerned it died there."
Last year, Mr McKillen sought Mr Blair's help again, asking him to keep an eye out for sovereign wealth funds in the Middle East which might have an interest in investing in Claridge's, the Berkeley and Connaught hotels.
And while he insisted that this request, which he made in a 15-minute meeting in the offices of Blair & Associates, represented his last contact with the former prime minister, it would appear Mr Blair took the Irishman seriously enough to raise the matter with Sheikh Hamad Bin Khalifa Al Thani of Qatar when he met him in Doha on February 12 last.
Two days later, on St Valentine's Day, Mr McKillen was having his own meeting with Sheikh Hamad's son, Sheikh Jassim, in the lobby of Claridge's. In the course of the 45-minute encounter, the Belfast businessman claims that the Sheikh apologised and told him how his family's investment vehicle, Al Mirqab, had "backed the wrong horse" when it sought to do a deal behind his back with the Barclay brothers for the Maybourne hotels last year.
Given how Al Mirqab now stands ready and waiting to partner Mr McKillen in a joint venture to buy out the Maybourne Hotel Group should he be successful in his bid to have the sale by Nama of the hotels' loans to the Barclays overturned, it's little wonder that the billionaire brothers are so sensitive about the role Mr Blair played in bringing the parties together.
Their sensitivity was nothing though compared to that described by Mr McKillen last Friday as he explained why he had purchased a new mobile phone in the UK to go with the Irish, French and Vietnamese mobile phones he already owned.
"I got the UK phone primarily because I was concerned about the Barclays hacking my phone because they had used detectives to find my American social security number, which is illegal. When I heard they had detectives, and I know they had detectives following me to restaurants, I got a UK phone because I knew they all knew my Irish phone and I was very worried about them hacking my phone," he said.
Challenged on this by Mr MacLean, Mr McKillen said that while he had no evidence to support his claim that his phone had been hacked, he was "concerned" that it would be.
Commenting on the tactics he believed the Barclay brothers were prepared to use to secure the ownership of the Maybourne Hotel Group, he added: "There is nothing these people would not do, as far as I am concerned, putting my wife and children out of a house, buying my debt, following me, putting detectives on to me, using my American social security number, which is illegal."
Mr McKillen's co-director, Liam Cunningham, will be cross-examined for a brief period tomorrow afternoon. Closing arguments in the case will be heard in two weeks' time.