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Across the road from the registered address of the Bermudian holding company which ultimately controls some of the showpiece assets of the billionaire Barclay family, B.UK Limited, sits the Controversy Boxing Gym.
It is something of a poetic, if coincidental, juxtaposition. B.UK Ltd, which has rarely been mentioned since it was incorporated in the Caribbean tax haven in 1989, was this week dragged firmly into the limelight when Lloyds Banking Group put the Barclay family offshore entity into receivership with debts of about £1bn. The bank signalled it intends to put up for sale B.UK’s – and the Barclays’ – three most high-profile baubles – The Daily Telegraph and The Sunday Telegraph newspapers and The Spectator magazine.
This week’s dramatic moves were the latest episode in a dynastic dust-up which has seen elements of the Barclay family – whose most senior member is Sir Frederick Barclay, one of the two billionaire twins whose wealth and reclusiveness has long been a source of public fascination – go toe-to-toe, in a manner perhaps similar to the sparring of the clients of the Controversy Boxing Gym, in a series of all-too-public courtroom clashes and financial wrangles.
At the heart of the saga, which has unfolded over the last three years, is a battle over what a High Court judge previously described as the “governance and direction” of the array of assets amassed by Sir Frederick, 88, and his late brother, David, who died in 2021, during a lifetime of tax-efficient acquisitions which saw the pair move from humble beginnings as the children of a travelling salesman in west London to the publicity-shy owners of assets that have ranged from their own private Channel island of Brecqou to London’s Ritz hotel.
It is a portfolio which the brothers famously structured through a Gordian knot of trusts and offshore entities in their twin-pronged search for discretion and minimised tax liabilities. But now, as ownership and oversight passes from one generation of Barclays to another, internecine strife has burst into the open in forms including allegations of bugging of Sir Frederick’s conversations by his nephews and claims of restricted access to funds from one branch of the family to another.
Aidan Barclay, the eldest son of Sir David who along with his brother Howard has taken on responsibility for the day-to-day running of the family’s UK companies in recent years, last month told a courtroom that the economic climate was “not easy” for their enterprises – employing 20,000 people in 100 companies, including the Very online shopping brand, across five jurisdictions. He said: “We have had severe pressure in the business in the last couple of years.”
The precise relationship between such pressure and this week’s announcement is unclear. Experts said the £1bn debt owed by B.UK Ltd, which also held the Ritz until it was sold in 2020, was larger than previously reported. But the Barclay family made clear that Telegraph Media Group (TMG), the owner of the papers ultimately controlled by B.UK Ltd, and The Spectator remain profitable and are not themselves entering administration. It is estimated that the publications are together worth about £600m.
The dynasty went out of its way to vouch for the financial health of the companies within its wider portfolio, saying they were “well capitalised with minimal debt and strong liquidity”. Indeed, according to the annual Sunday Times Rich List, the family added some £213m to their total wealth last year, currently put at £6.5bn.
Instead, it appears any problems lie in the overarching system of “holding companies” which knit together the Barclay empire. In a statement asserting the financial stability of the individual companies, a family spokesperson said this week: “They have no liability for any holding company liabilities, continue to operate as normal and are unaffected by issues in the holding company structure above them.”
Such is the Barclay brothers’ enduring reputation for ferociously guarding their privacy that few associates will talk publicly about any dealings. It is understood that Aidan and Howard, along with their advisers, have since 2019 sought a means to trim the family’s portfolio of assets and effectively buy-out other family members who wish to pursue other avenues.
But disentangling the structure put in place by the twins, which has included various intercompany loans, would appear to be proving far from simple. One City figure told i: “What is happening [to B.UK Ltd] is in many ways completely normal – loans fall due, arrangements are modified and debts are rescheduled. It’s routine stuff. The only difference is that the brothers built a complex holding structure which is perhaps proving difficult to unpick.”
It is a situation seemingly made more onerous by the delicate relations between varying elements of the clan. After decades in which Sir Frederick and Sir David shunned publicity to the extent that practically the only known photographs of the pair were taken when they attended Buckingham Palace to be vested with their knighthoods for services to charity, the family has of late endured considerable limelight.
The Euroscepticism championed by the Barclay brothers, who were avid fans of Margaret Thatcher and offered her a suite in the Ritz in her final weeks of life, arguably reached its zenith three years ago when the UK left the European Union. On “Brexit day” in January 2020, the Daily Telegraph celebrated the championing of the Leave cause on behalf of its readers (an op-ed headline proclaimed “It’s Telegraph readers wot won it”), noting that its star columnist, Boris Johnson, was also prime minister.
But while the brothers were doubtless able to take some satisfaction from seeing ties severed with Brussels, a storm closer to home was brewing. Within weeks of Brexit, a sulphurous legal row between Sir Frederick and his nephews broke into the open with Sir Frederick accusing his brother’s two older sons – Aidan and Howard – and youngest son, Alistair, of bugging his conversations in the conservatory of the Ritz.
To bolster his case in the High Court, Sir Frederick produced video footage claimed to show Alistair, a former racing car driver, handling an eavesdropping device in the corner of the Ritz where Sir Frederick and his only child, Amanda, liked to hold conversations on topics including the family’s business affairs. In court documents, Sir Frederick, who along with his brother had made privacy a cornerstone of his existence, accused members of his own family of “commercial espionage on a vast scale”.
Summarising the dispute, the lawyer representing Sir Frederick and his daughter, Desmond Browne KC, said: “We all remember Tolstoy saying ‘each unhappy family is unhappy in its own way’. Here, the children of Sir Frederick and Sir David have been at odds… concerning the family trusts, and cousin, sadly, has been pitched against cousin.”
The clash, during which Sir Frederick also aired a complaint that the Ritz had eventually been sold by his brother’s side of the family for half the market price, was eventually settled following Sir David’s death in January 2021. In a joint statement, the family said: “In these troubled times, unity within families is more important than ever.”
Such unity has nonetheless not put an end to tensions being aired in courtrooms. Sir Frederick’s divorce from his wife, Lady Hiroko Barclay, is the subject of a long-running dispute over payment of a £100m settlement arising the end of the couple’s 34-year marriage. The judge presiding over the case has previously accused Sir Frederick of “reprehensible” behaviour after a court order to sell a yacht as part of the settlement led instead to the proceeds going to Sir Frederick.
The saga last month resulted in Aidan Barclay taking the witness stand after Sir Frederick complained he was unable to pay the settlement because his nephews “hold the purse strings” and they had in 2019 “turned off the tap” to a family trust which he said could provide the funds.
Mr Barclay told the court the claim was “not true” and that the family business had been experiencing “some difficulty” at that time. He said: “We had to readjust the way in which we were operating. Things have been quite difficult since then.”
The 67-year-old son of Sir David said his uncle and his daughter had access to separate trusts and assets which were “nothing to do” with the wider family business for which he has responsibility. Describing the dispute between Sir Frederick and his ex-wife – which returns to the High Court next month – as “not my fight”, Mr Barclay added: “I would like it to go away.”
Not that, however, the next generation of the Barclay dynasty are any more likely to walk away from a corporate quarrel than the previous one. After Aidan and Howard were this week removed as directors of TMG and The Spectator, it was reported that the family have made a fresh offer on the outstanding debt which could see them retain control of the publications.
As the City figure put it: “One thing you learn with the Barclays is never to write them off.”
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