The Heat Is On Aynsley

Dail committee grills Aynsley on dealings with developer

ALLEGATIONS of a cosy relationship between the management of the IBRC and property tycoon Paddy McKillen resurfaced last Wednesday with the appearance of the bank's chief executive Mike Aynsley before the Dail's Finance Committee.

In the course of questioning by Fianna Fail TD Michael McGrath, Mr Aynsley was called upon to explain two text messages he had sent to Mr McKillen, the details of which became public earlier this year during the Belfast-born businessman's High Court battle against the billionaire Barclay brothers for control of the prestigious Claridge's, Connaught and Berkeley hotels in London.

In the first of his texts, Mr Aynsley had told the Northern Ireland businessman of the IBRC's decision to reject efforts by the Barclay brothers to buy his debt from the bank saying: "BB (Barclay brothers) have now been told that the bank has chosen a path to work consensually with you rather than to deal with them. I understand they are not happy!"

In a follow-up text, Mr Aynsley added: "Please keep that confidential as I can't have board positions like this leaking out!"

Mr Aynsley's texts have proved to be a major embarrassment for the former Anglo Irish Bank, with both lawyers for the Barclay brothers and the media interpreting them as being suggestive of an overly friendly relationship between the IBRC chief and Mr McKillen, who is one of the State-owned bank's biggest borrowers.

Asked by Fianna Fail's Michael McGrath to explain the context in which he had sent the texts, Mr Aynsley insisted there was "nothing untoward in any way" about his approach to Mr McKillen to advise him of the position of the board.

The IBRC chief also made it clear that the Barclay brothers had been informed of his board's decision at the same time as Mr McKillen, a fact which had not emerged in the course of court proceedings between the parties in London.

Explaining his position, Mr Aynsley said: "The reality was that we were going through a process that both Mr McKillen and the Barclay brothers' representatives were well and truly aware of, which culminated in a submission to the board to maintain a process of consensual restructuring with Mr McKillen around his loans rather than selling a portion of those to the Barclay brothers. We came out of those meetings and my colleague, Mr Woodhouse, was given the authority to contact the Barclay brothers and inform them of the decision. I attempted to call Mr McKillen and of course couldn't get hold of him, he doesn't do email, so I sent him a text and it was as simple as that."

Commenting on his second text in which he advised Mr McKillen to keep the details of the IBRC board's decision to himself, Mr Aynsley added: "The reminder [text] to him following that was simply that this was a board decision, and it's a bank client relationship that shouldn't be divulged. Of course [we were] aware at the time that he was acutely in litigation with the Barclay brothers. It wasn't appropriate we felt if he went to the press with that. Of course, it ultimately came out in the discovery process in that litigation, so that's all there was to it."

Mr McKillen received a welcome boost in his ongoing fight for control of Claridge's, the Connaught and Berkeley hotels last Monday with the Court of Appeal in London granting him leave to appeal the decision of Mr Justice David Richards on his legal action against the Barclays. In taking the High Court case against the billionaire owners of the Ritz Hotel and Daily Telegraph, the Belfast businessman claimed they had used unlawful or unfairly prejudicial means to deprive him of the opportunity to buy Derek Quinlan's share in the Maybourne hotels. In his ruling, Mr Justice Richards said Mr McKillen had failed to establish that this was the case.

The matter will now be revisited within weeks, before three judges in London's Court of Appeal following the decision by the Right Honourable Lady Justice Arden to order an expedited hearing on all grounds of Mr McKillen's appeal.

Separately, Mr McKillen has applied to the Supreme Court in London for leave to appeal another judgment by the Court of Appeal in which it ruled that Nama's sale of its €800m share of the Maybourne hotels' debt to the Barclays was valid.

- RONALD QUINLAN