Tchenguiz directors quit pub companies
The two key lieutenants of property magnate Robert Tchenguiz have resigned from the board of his two managed pub companies after a request from Icelandic bank Kaupthing.
Tim Smalley and Aaron Brown have both stepped down from the board of Bay Restaurants and Town and City Pubs.
The equity in the two companies is now split between Kaupthing and management. Earlier this year, the Morning Advertiser revealed that Kaupthing, the crashed bank now being run by Icelandic Government-appointed management, is maintaining its debt and equity investment in the two managed pub companies, with an unpaid £643m overdraft outstanding from a Tchenguiz-linked company, Ocsatello.
Kaupthing is now running British Virgin Islands-based Oscatello, which has the £643m outstanding despite the forced sale of Tchenguiz's stake in companies such as Mitchells & Butlers and Sainsbury's last October.
The quasi-Governmental committee running Kaupthing is happy to let its investment in Slug & Lettuce operator Bay Restaurants and Yates's operator Town & City Pubs ride for the time being.
Beneficial involvement
Ian Payne, who is chairman of Bay Restaurants and Town & City Pubs, said: "All three Bay Restaurant brands are currently in growth compared to last year. The Yates brand is also performing really strongly as is Town and City itself."
Payne said that the two companies had benefited from the involvement of Smalley and Brown.
A source said: "The equity that Tchenguiz had in number of businesses was included in the original deal that Tchenguiz did with Kaupthing last October.
"The equity in Bay and Town and City owned by the Tchenguiz family trust is now owned by Kaupthing. Overall, the equity is split between Kaupthing and management." Payne said earlier this year Kaupthing's investment is now overseen by a five-man committee, three of whom are Icelandic civil servants.
"They're not looking to do anything quickly. It's a strange situation — it's not like in this country where Ernst & Young might get involved.
"Members of the committee sit on our board."
