Sir Frederick Barclay, once one of the UK’s richest men, has been accused by his wife of 34 years of transferring all his wealth to his daughter and to a complex series of trusts “in order to avoid paying any tax”.
The 87-year-old – who, together with his twin brother, the late Sir David Barclay, built up a vast business empire including the Daily Telegraph – faces a potential prison sentence for contempt of court after failing to pay a penny of the £100m divorce settlement awarded to his ex-wife.
Hiroko Barclay told a court that her ex-husband had a brawl with his twin brother on their jointly owned yacht after falling out over the future of the business. She said they were “punching” each other.
The brothers were once so close they lived, worked and holidayed together, but they fell out over questions of succession and broke up the empire.
The fallout led Sir Frederick to relocate back to the UK from Monaco in 2014 where he took steps, the court heard, to avoid paying any tax by transferring everything to their daughter Amanda and to a series of trusts.
“He’s not allowed to have a bank account because he’s not paying tax in the UK,” Lady Hiroko told the court. “He’s not allowed to have assets … all not to pay tax in the UK.”
Lawyers for Sir Frederick told the court that he cannot pay the £100m, nor the legal fees now amounting to almost half a million owed to his ex-wife’s lawyers, because of a lack of “liquidity” in his assets. Earlier this year he was evicted from his £25m townhouse in St James’s in central London, which boasted its own ballroom.
The court had earlier heard that Sir Frederick is terrified of going to prison and said: “I’ve never had as much stress as this divorce since I was a young boy.”
Barclay’s lawyers told the court: “He has struggled desperately to get hold of money to settle the divorce bill, but does not have control of the funds.”
Lady Hiroko, who lived with Sir Frederick for 46 years until launching divorce proceedings in March 2019, accused him of hiding the money from her, saying that he still controls the main trusts, and that he is still the “boss” with all the “power”.
The court heard that Lady Hiroko, who is 79, has no assets in her name and is dependent on her ex-husband to pay her a monthly allowance, which is now paid by her daughter, from whom she is estranged.
The allowance was halved to £30,000 a month in January of this year after Lady Hiroko launched the enforcement proceedings to try to force her ex-husband to pay the court order.
In court, Lady Hiroko accused her daughter Amanda of conspiring with Sir Frederick to stop her from receiving any money. She said Amanda visited her a few months ago along with her grandson, also called Frederick, and threatened her with a move to social housing.
“She was telling me you have to go and live in a council flat … you don’t have any money so please stop this divorce procedure.”
At the heart of the divorce battle are three main assets: loan notes held in trust which Lady Hiroko’s lawyers say are worth £545m; Sir Frederick’s half-share of the Channel island of Brecqhou; and his share in any settlement that resulted from a row over being bugged by his nephews during the sale of the Ritz Hotel in 2020.
The court heard that Amanda Barclay became the principal beneficiary of the Amelia trust, which owns a 25% share in the underlying family business, in 2014.
Reporting of the details of the trial was only allowed after Guardian News and Media defeated an attempt by Sir Frederick’s nephews, the owners of the Telegraph Media Group, to have the case heard in private.
Mr Justice Cohen rejected the application partly because the law dictates public hearings for anyone accused of contempt.
“To state the obvious, anything that affects Sir Frederick, and in particular his reasons not to pay … couldn’t possibly be described as private,” he said. Sir Frederick faces up to six months in prison if found guilty.
The committal hearing is due to conclude before Friday. Lady Hiroko’s lawyers, including Lady Shackleton, are continuing to work without pay.