Monday, May 14, 2012

McKillen may have kept details of €50m sale receipts from IBRC - The Irish Times

MARK HENNESSY, London Editor

PROPERTY DEVELOPER Paddy McKillen did not reveal to the Irish Bank Resolution Corporation (IBRC) the existence of £40 million (€50 million) from property sales last year, despite owing hundreds of millions, it was suggested in court yesterday.

Mention of the money came during Mr McKillen’s ongoing High Court case in London against the billionaire Barclay brothers, David and Frederick, and others.

The Belfast-born property developer alleges the brothers improperly blocked him from buying some of financier Derek Quinlan’s shares in the company that owns the well-known Claridge’s, Berkeley and Connaught hotels in London.

The court heard Mr McKillen owns assets in Argentina, the US, Ireland, France, Dubai, Germany, the UK and Kazakhstan, as well as more than a dozen properties in Vietnam.

Mr McKillen told the court last year he had sold €150 million of buildings, with borrowings repaid to Bank of Scotland from an Oxford Street property in London, while Bank of Ireland and IBRC got money from the sale of property in Paris.

Under questioning from queen’s counsel Kenneth MacLean, representing a number of companies owned by the Barclays, Mr McKillen repeatedly said he was “not sure” if the IBRC was told that £40 million was left over after debts were repaid.

“Did you tell them that you had £40 million sterling in free cash?” asked Mr MacLean.

“I am not sure,” the Irish businessman replied.

“It is a simple enough question,” Mr MacLean said.

“I am not sure,” Mr McKillen said again.

He said IBRC was “quite happy” with the arrangement it had with him and the pay-down facilities it had. He said he and the bank had a facility that was ready to be signed in the next few weeks.

Last December, IBRC wrote to Mr McKillen asking for details of unencumbered assets that could be disposed of quickly so that funds could be put into an account that could later be used as security.

Asked what has happened to the £40 million, Mr McKillen replied: “It was reinvested or it is available. It is reinvested in Argentina. It is reinvested in the south of France, or wherever.”

Mr MacLean said IBRC “would have been extremely” interested in learning that Mr McKillen had £40 million more than expected, leading Mr McKillen to reply: “I am sure they would. Every bank does.”

“Surely, as their best client, you would want to tell them about the £40 million?” Mr MacLean said.

Mr McKillen replied: “And give them all our cash?”

“Yes,” said Mr MacLean.

Replying, Mr McKillen, who will continue to be cross-examined today, said: “No, that is not the way business works, I am sorry. Sorry about that.”

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