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Chris Richardson and Ernie Berntsen question bank's purchase of Coniston Hotel

By Natalie Tipping

A businessman made bankrupt last year says new evidence could have helped him find justice.

Chris Richardson and business partner Ernie Berntsen were just days from opening the Coniston Hotel in 2010 when their bank, NatWest, stopped funding the project.

It was moved to the bank’s ‘turnaround’ division, Global Restructuring Group (GRG).

Chris Richardson, left, with Ernie Berntsen
Chris Richardson, left, with Ernie Berntsen

A valuer said the hotel, which had previously been valued at £7.7 million once renovations were completed, was now worth between £2.5m and £3m, without the work being finished.

Due to this much lower valuation, the pair were deemed in breach of their loan terms, and lost control of the hotel.

The property, which RBS NatWest had said was in financial difficulties, was then bought by the bank’s own property division, West Register (WR).

Mr Richardson told BBC Newsnight: “I could not believe what was going on, and I can’t explain the pressure when something like that happens.

“After banking with them for so many years, we were sure they were there to assist us, but no, they had their own agenda.”

The Coniston Hotel in Sittingbourne
The Coniston Hotel in Sittingbourne

Now, a report published by the Treasury Select Committee shows WR officials were in meetings with the valuer and GRG within 10 days of the case being transferred, and had influenced the decrease in the property’s value.

The report, by the Financial Conduct Authority, says minutes showed the WR representative talking down the value of the hotel, and quotes an email sent by a member of GRG staff to their manager after the meeting, which suggested leaving the hotel closed and then selling it to West Register if offers were low.

The report concludes that although the relationship between WR and GRG was inappropriate, the transfer of the Coniston was "appropriate given the financial position of the customer".

It continues: “In this case we conclude the early involvement of WR did influence the strategy adopted by the bank towards the customer; the bank followed the course set out in the email and did not give meaningful consideration to other options.”

The FCA also found no evidence of an intent to purchase assets before they had been transferred to GRG, and that the price paid by WR constituted an overall loss for the bank.

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