FORMER BRITISH prime minister Tony Blair believed in 2010 that the debts of a luxury London hotel group at the centre of a long-running High Court case in London should not have been taken over by the National Asset Management Agency.
Details of the extent of Mr Blair’s contacts with Belfast-born developer Paddy McKillen are revealed in an email sent from his office to a member of Mr McKillen’s staff in January 2010.
But Mr Blair declined directly to lobby the British government to put pressure on the Irish government not to transfer to Nama £660 million of debt run up by Coroin, which owns the Maybourne Hotel Group comprising Claridges, the Berkeley and the Connaught hotels.
“Tony feels that his conveying any of these messages may not be worth the risk to Maybourne,” wrote Varun Chandra, one of Mr Blair’s staff at Tony Blair Associates, to Mr Blair’s close ally, Matthew Freud. Mr Freud forwarded it to another colleague, saying “Please pass on to Paddy”.
The email, contained in court records seen by The Irish Times, continued: “Given the prestige of the assets and their importance to London on the international stage, as well as being a rare strong performer in an otherwise struggling sector, UK national and local government is very keen to avoid unnecessary damage being inflicted on the reputation of the Maybourne Hotel Group.
“Seeking alternatives to the transfer of the debt to Nama is the more desirable course of action from that perspective,” wrote Mr Chandra, who said Mr Blair had asked him “to follow up quickly”.
“British interests aside, taking these assets into Nama almost certainly crystallizes a loss for the Irish government, as the most likely exit is a sale at a considerable discount to a private equity buyer regardless of asset performance, which in turn is likely to suffer due to the reputational impact of such action.
“Ultimately, any loss will be borne by the Irish taxpayer. If it later emerged that the [Irish] government chose, of its own volition, not to pursue a sensible, cost-free private sector alternative to cleaning up its bank balance sheets when offered one, and instead pursued a strategy that necessarily led to a taxpayer loss, the specialist and mainstream media criticism is likely to be harsh,” the email went on.
“Given that Derek Quinlan’s other assets are being transferred into Nama, this should be sufficient to appease the general populace and to put significant pressure on his finances without having to materially hurt the fortunes of a UK-based, profitable and prestigious going concern,” Mr Chandra wrote.
He said Mr Blair’s office intended “to approach Abu Dhabi, Kuwait and Oman (not necessarily in that order)”, though some more information about a proposed deal would “be very helpful in allowing us to draft our own short proposition”.
Acknowledging that some details of Mr McKillen’s plans were not then ready, Mr Chandra continued: “But some meat on the bones would be useful, particularly around the proposed ownership structure post any investment. And to be clear, we understand that securing the refinancing as part of any investment is crucial.”
