For American listeners who might not be aware of these guys, well, you're in for a treat — this is the remarkable story of how David and Frederick Barclay went from painters and decorators to owning the most prestigious hotels in London: the Ritz, Claridge's, the Connaught, the Berkeley. They bought the Telegraph Newspaper Group, they bought an island and built a £100 million castle on it, their fortune was estimated to be £7 billion pounds as late as 2020. But these guys, man, they were secretive, underhand — these guys pulled some very sneaky shit. And then it all came crashing down when the twins turned on each other, culminating in the Ritz Hotel bugging scandal. This is a sensational and cracking story — enjoy.
Identical twins David and Frederick Barclay were born in Shepherd's Bush, West London, in 1934. Their father was a travelling salesman, their mother a housewife. When the twins were 13, their father died, so their mother had to care for ten children in a cramped two-bedroom flat.
The twins left school at 16, had various jobs, but then started working together as painters and decorators, saving enough money to get into property development, and they were making a good living from a very early age.
They dressed identically and immaculately, and people could only distinguish them by their hairstyle — Frederick, who was left-handed, had a right-hand parting, while David, who was right-handed, had a left-hand parting. David, who was the older by 10 minutes, was always seen as more dominant and risk-inclined.
Throughout the late 60's and early 70's, the twins expanded their property empire, and their timing couldn't have been better, because London's property market was booming. Now, a crucial part of their success back then was their relationship with a government agency called Crown Agents.
Crown Agents had originally been set up by the UK government to manage financial affairs for Britain's colonies.
But by the late 1960's, with large parts of the empire declaring independence, Crown Agents' role was diminishing, its funding was declining, and management approved a new financial division to make money on its own account.
But it was a shitshow — these were bureaucrats who had very little real expertise in the financial markets, and they were giving out loans to people without any proper due diligence, and it would appear that plenty of shady stuff was going on between Crown Agents and the people it was lending to.
It's all rather murky. So between 1968 and 1973, the Barclays borrowed heavily from Crown Agents, buying hotels and commercial property across central London, and by 1973 they owed Crown Agents £9.5 million — a huge sum for those times, around £120 million in today's money.
Then, in 1973, Britain's property market crashed, and Crown Agents collapsed under the weight of years of reckless lending and mismanagement. The scandal ultimately cost British taxpayers more than £175 million — around £1.2 billion in today's money — and became one of the biggest financial scandals of the 1970s.
The Barclays should have been among the biggest casualties. Instead, somehow, they managed to walk away with £6.5 million of their debt effectively wiped out, allowing them to avoid financial ruin.
For decades, there was little public suggestion that the brothers had done anything wrong. But in 2024, The Economist magazine, after examining more than 10,000 previously sealed documents, argued that the official investigations had failed to uncover the full story.
According to its investigation, that £6.5 million didn't simply disappear. It's alleged that the Barclays secretly used a company they effectively controlled to buy back their own debt from Crown Agents for a fraction of what they owed — effectively wiping out most of the debt in the process.
The Economist concluded there was "every reason to believe" fraud may have occurred. However, it's important to note that neither brother was ever charged with any offence in relation to this.
So, having survived the collapse of their biggest lender, throughout the 70's and early 80's the brothers continued to buy and sell property. They were doing very well for themselves, but they weren't in the big leagues yet.
That all changed in 1983, with Ellerman Lines. Ellerman Lines was over a hundred years old, involved in shipping and brewing. But by the early eighties it was in trouble. Global shipping was in a deep slump, and the losses from the shipping business were dragging down the rest of the company, making it look far less valuable than it actually was. And also, and very crucially, a lot of the property Ellerman owned was valued on the company's books at historic or outdated values.
In essence, where the market saw a struggling shipping company, the Barclays saw a profitable brewery with hundreds of pubs, a valuable property portfolio — they saw a huge opportunity.
And at this time the brothers were living as tax exiles in Monaco — that's another thing about the Barclays, they spent their lives avoiding paying any tax — and it just so happens that one of their neighbours in Monaco was Lady Esther Ellerman, the founder's daughter, and a major shareholder. The Barclays befriend her, and then through their friendship with her, they arrange a private meeting with David Scott, the non-executive chairman of Ellerman Lines.
And this is really where we get an idea of how the twins operated. They offer Scott around £45 million for the company, and promise him that he'll remain non-executive chairman once the deal is done — but with conditions: Scott must grant them exclusive negotiating rights and keep the talks strictly confidential. So the rest of the Ellerman board is kept in the dark.
Scott agrees.
But the moment the deal is completed, a lawyer acting for the Barclays hands Scott a letter demanding his resignation, accusing him of indiscretion and breach of confidentiality.
So now try to get your head around this: the twins were sacking Scott because he'd conducted secret, unauthorized negotiations behind his own board's back — exactly what the twins had asked him to do. They'd engineered the very conditions they were now using to remove him.
I mean, that's just sneaky as hell.
And then the twins moved fast. The shipping operations were sold off to their own management, and this paid off some of the debt but also got rid of what was the heavy loss-making division. The property portfolio gets redeveloped and sold piece by piece.
And then in 1989 they sold the brewing division for £248 million — more than five times what they paid for the entire company. Net profit: hundreds of millions of pounds. This was the deal that not only made them their first real windfall, but it also announced them to the City of London — it built their reputation.
And other lucrative deals followed. A guy called Octav Botnar — a very colourful guy, I'm going to see if I can do a story on him — anyway, he had built one of Britain's biggest car businesses, importing Nissan cars. But then in 1994 the Inland Revenue accused him of a £97 million tax fraud. Botnar fled to Switzerland.
Now, most people wouldn't touch a business caught up in tax investigations and owned by a fugitive. Not the Barclays — as one observer said of them: "I think you could say they specialise not in distressed assets, but in owners in distress."
So they travelled to Switzerland, negotiated a deal that was shrouded in secrecy, with the final price tag ranging from £75 million to £200 million — no one knows the exact figure. And again, the Barclays did what they did with Ellerman — they broke it apart. They sold off individual dealerships and plots of land piece by piece, before packaging up the actual dealership business and selling it a few years later. Overall, while their profits from this deal are unknown, it's believed they got a substantial return on their investment.
So by now they had built their reputation as private, secretive but very savvy business people, and they would leverage that reputation to go on a spending spree using mainly borrowed money.
But before we get to their business empire and how it all came crashing down, we need to take a bit of a tangent and look at how the brothers lived at this stage, because it's all a bit strange.
So I already mentioned that they were living in Monaco. By this stage both twins were married — David had 3 sons, Frederick had a daughter, and both families lived in the same penthouse, where the twins also worked.
Then in 1993, they spotted an advert in Country Life magazine for a small private island called Brecqhou, just off Sark island in the Channel Islands. Despite being under the British Crown, it still allowed the brothers to retain their non-UK tax status, so they still didn't have to pay tax. They bought the island and built a sprawling castle with 100-foot granite walls, battlements, two swimming pools, a helipad, and 20 decorative cannons. It cost about £100 million.
Every morning at 11 o'clock, each twin had his own butler, dressed in white gloves and a white jacket, who would light his cigar before serving drinks in crystal glasses engraved with their initials. There were stories of marble roads, a Rolls-Royce driving them the 200 metres from the front door to the helipad.
Their move to Brecqhou was all about privacy, control and power — basically they wanted to be, literally, the kings, all-powerful in their own little kingdom.
The problem was that although they owned Brecqhou, the tiny island was governed by its much larger neighbour, Sark, which still operated under a centuries-old feudal system. And that didn't sit well with the Barclay twins.
So they leveraged their wealth — they bought most of the commercial property on Sark, including 4 of the 6 hotels and up to 100 properties overall.
They spent years trying to free themselves from Sark's authority — arguing unsuccessfully in court that Brecqhou wasn't really part of Sark, repeatedly trying to buy the island's feudal lordship, and taking local residents to court over disputes that many saw as petty and vindictive.
Then, when Sark eventually decided to ditch the old feudal government system and held its first democratic elections in 2008, the twins put a lot of money into backing their own hand-picked candidates. But after every single candidate they backed failed to win, the Barclays responded by shutting down their hotels and other businesses on the island, putting around 140 locals out of work, before later rehiring many of them — how petty and mean.
It was pure bully-boy tactics. I really recommend that you google "Panorama Barclay Twins" — there's a great documentary, just 30 minutes long, that highlights their behaviour on the island.
Anyway, back to business on the mainland. They bought their first real trophy asset in 1995 when they bought the Ritz Hotel in London's Piccadilly for £75 million, and it was this purchase that really announced the Barclay twins to the public.
In 2002, they bought Littlewoods, a Liverpool-based retail company, for £750 million, and then merged it with the GUS catalogue business that they bought for £590 million.
And then we come to another great example of the Barclays buying a distressed owner, not a distressed business — so the owner is Conrad Black, and the business is the Telegraph Newspaper Group.
So this is 2004, and Black had been forced out of the media empire he controlled and was under investigation for allegedly siphoning millions of dollars from the company — I will do an episode on Black. His legal fees were mounting and the threat of criminal charges was hanging over him, so he needed cash, and fast.
Exactly the type of situation or opportunity the Barclays loved.
They approached Black and struck a secret backroom deal. But instead of buying The Telegraph itself, they agreed to pay £260 million for Hollinger Inc. — Black's own holding company, which controlled The Telegraph.
And that's the important bit. By buying Black's company rather than The Telegraph directly, the £260 million would go to the company Black controlled and help solve his financial problems. Meanwhile, The Telegraph's other shareholders, who would have benefited from a normal sale of the newspaper, were effectively bypassed.
But the scheme unravelled. Black's board discovered what was happening and sued to stop the deal. A Delaware judge blocked the transaction, and criticised the Barclays for being "less than fully candid" over their role in the negotiations.
As a result, the Barclays were forced into the very auction they had tried to avoid. They eventually won the bid for the Telegraph Group, but had to pay £665 million.
Once the Barclays took control of The Telegraph, a lot of people inside the newspaper were scratching their heads. Unlike Rupert Murdoch, they weren't newspaper men. They didn't seem particularly interested in journalism.
And to be fair, they largely kept out of the newsroom. Editors were given a free hand, although everyone knew where the brothers stood politically. They were staunch Thatcherites. In fact, when Margaret Thatcher left Downing Street with, according to one adviser, "no money in the bank," the Barclays gave her a house to live in. And after she was diagnosed with cancer, they later offered her a permanent suite at the Ritz, where she lived until her death.
They were also deeply Eurosceptic and threw their weight behind the Brexit vote.
So owning The Telegraph wasn't just another investment — it was a trophy, and it gave the Barclays a seat at the very heart of Britain's Conservative establishment.
And they continued to buy other trophies, especially hotels, like in 2011 when they bought Claridge's, the Connaught and Berkeley Hotels for £700 million.
So of course, by now the twins had become regulars in the annual Sunday Times Rich List — and look, I mention the Sunday Times Rich List a lot, because growing up I used to love it. I think it might have been one of the drivers that got me interested in business, because I just loved reading about how the people on the list made their money, the businesses they were involved in, the stories behind those businesses.
Anyway, in 2012 the Rich List had the Barclays' net worth at £2.25 billion.
Now, everything up to this point is the story of two brothers who are joined at the hip, building an empire together — but apparently it wasn't all hugs and kisses between them. What comes next is the story of how it falls apart.
The roots of the fallout go back to the mid-1990s. Up until this point, the twins effectively owned everything fifty-fifty. But they're getting older, they're thinking about succession, and David's health starts to decline.
David had always been the more dominant twin and, worried that he might not have long left, he asks Frederick to do something for him before he dies. He asks Frederick to give half of his 50% share to David's three sons — Aidan, Howard and Duncan.
The idea was simple. When the brothers were gone, the family empire would be divided equally between the four heirs: Frederick's daughter Amanda would have 25%, and David's three sons would have 25% each.
For Frederick, this of course wasn't an easy decision — giving up 25% of his stake in the business — and according to a witness, on one occasion they actually ended up punching one another.
But, as mentioned, David, the elder twin by 10 minutes and the more dominant one, eventually gets his way, and Frederick agrees to his proposal.
He would later call it the biggest mistake of his life. Because by giving away half of his share, Frederick had effectively handed David's side of the family control. His daughter Amanda now had 25%; David's three sons had the other 75%.
Now jump forward to 2013. David, who didn't actually die in the mid-90s, has since had another son, Alistair, from his second marriage. And naturally enough, David now wants Alistair included. He wants to redistribute some of that 75% held by his three older sons so that Alistair gets a share as well.
And just to be clear, David wasn't asking for any of Amanda's 25% — she's Frederick's daughter, her share wouldn't change at all. He simply wanted to redistribute the 75% on his own side of the family.
But there's a problem. The twins had structured their family trusts so that neither brother could make a major change like this without the other's approval. In effect, Frederick had the power to veto it.
But Frederick said no.
Why?
Some people suggest that Frederick probably resented how David coerced him into handing over 25% back in the 90's. Other people close to the family say Frederick was just very close to his older nephews, having worked alongside them for years — because by this stage the nephews were running the businesses, and Frederick didn't have a close relationship with his new, younger nephew. Either way, this is the moment the relationship between the twins really starts to deteriorate.
Because a year later, in 2014, at eighty years of age, Frederick left their castle in Brecqhou and moved to London. For the first time in their lives, the twins were no longer living together.
Around the same time, the businesses start to buckle. Their logistics business is losing over £100 million a year. Littlewoods gets caught up in the PPI mis-selling scandal — a huge consumer scandal in the UK involving banks and retailers — and Littlewoods ends up paying more than half a billion pounds in compensation. Profits at The Telegraph are falling every year, forcing the family to pump £390 million into the business.
And while Frederick is no longer directly involved in running the businesses now — it's mainly two of David's sons, Aidan and Howard — Frederick starts asking questions about the debts, and the more he digs, the more he suspects he's not being told the full story.
Now, as with all these family disputes, it's difficult to know who's telling the truth. Frederick maintains he was shocked by the level of debt — which is slightly surprising, given that he and David had built much of the empire on borrowed money.
Either way, he's concerned enough to get involved again. And although David's side of the family now controls around three-quarters of the family fortune, the governance of the Ritz hadn't been updated to reflect that, leaving a loophole that Frederick exploited.
Using this loophole, in June 2019 he appointed his daughter Amanda and a close adviser to the Ritz board, while David's sons Aidan and Howard were removed. It's effectively a boardroom coup.
Then, just three months later, reports emerge that the Ritz is going to be sold. Now, I'm guessing Frederick needed the money — his wife had also left him that year and started divorce proceedings. But whatever the reason, David's side of the family suddenly had no say over the future of the Ritz, one of the family's crown jewels.
And if you're thinking, man, family rows involving business can be nasty — it's about to get much nastier.
At the Ritz, Frederick had a private room called the Conservatory, where he'd spend his afternoons smoking cigars and holding confidential meetings.
In late 2019, his nephews plant a bugging device disguised as a plug adapter in the room and hire a private investigations firm to transcribe the recordings. Over the next two months, they capture more than ninety-four hours of Frederick's private conversations with bankers, lawyers and trustees.
Frederick starts to notice his nephews seem to know things they shouldn't. So he gets people to install hidden cameras in the Conservatory, and bingo — the footage, which you can see on YouTube, shows one of his nephews caught red-handed handling a bugging device.
Frederick and Amanda initially decide to keep the whole thing within the family rather than call the police. But that proves to be a costly mistake. Unknown to them, Aidan and Howard had quietly taken legal control of the company that owned the Ritz, and within days of Amanda revealing the bug, they use that power to remove her from the board.
Now Frederick and Amanda are furious. They sue their nephews and others involved in the bugging.
As this civil case is rumbling on, Frederick's nephews, who now have control of the Ritz, sell it for £800 million, and this leads to another huge and very public row, with Frederick telling the press that he had lined up bids of over £1 billion.
Anyway, just as the Ritz was sold in March 2020, Covid hit, and now estranged by the lawsuit and separated by lockdown restrictions, the once-inseparable twins never spoke in person or saw each other again.
Because on January 10th 2021, David died of pneumonia brought on by Covid-19.
Frederick didn't attend the small funeral service in Brecqhou. Instead he released a really sad, and I think very poignant, public statement: "It was a great journey in everything that we did, the good, the bad, the ugly … We were twins from the beginning until the end. He was the right hand to my left and I was the left hand to his right. We'll meet again."
Look, it's hard to have much sympathy for the twins, but I find that statement, and the fact that they never made up, just heartbreaking.
Thankfully for the family, in June 2021 a truce was declared. The civil case was settled, and both sides issued a joint statement: "We are pleased that as a family we can put this difficult period behind us and now look forward to our future together."
But there was very little to look forward to — by 2023, Frederick and the entire family were in dire straits financially. Frederick was threatened with a prison sentence for failing to pay his ex-wife a court-ordered £100 million divorce settlement. He managed to avoid jail by arguing that the family businesses were running out of money and he lacked the funds.
How could this happen? How could a family whose net worth was put at £7 billion in 2020 be out of money?
Well, a great piece in the Financial Times in 2023 laid bare the fact that most of the Barclays empire had been built on debt.
And since then the banks and lenders have aggressively called in their loans. Over the past three years, the family has lost control of virtually every business in their portfolio, bankruptcy proceedings have been issued against them earlier this year. Their hundred or so properties in Sark, most of which had closed down long ago and fallen into disrepair, have been on the market for years now.
Today, Sir Frederick is 91 years old. The empire that he and David spent more than fifty years building is gone. And of course, also gone is David, his twin, who he'd been joined at the hip with for most of their lives, their last few years consumed by a bitter feud.
And look, I want to feel sorry for them, but it's hard to. Here's the thing about the Barclay twins: because they were so private, because they gave no interviews, it's almost impossible to get a handle on who they really were.
So all we really have to go on is their actions. And their actions don't paint a pretty picture: secretly and underhandedly buying back their own debt at a heavily discounted rate from Crown Agents in 1972, and in doing so, screwing the British taxpayer; double-crossing the non-executive chairman of Ellerman Lines to land their first major deal; intimidating and suing the residents of Sark in a bid to control the island, then shutting down its businesses when their candidates lost the election — so petty and vindictive; trying to buy the Telegraph Group behind the board's back; building their fortune on businesses mainly based in Britain, proclaiming themselves as British as beef, while paying not a penny of tax to the country they claimed to champion.
So yeah, the Barclay twins and their story is one of tragedy, but as mentioned, I find it very hard to feel any sympathy for them.
Anyway, whatever your thoughts on the twins, they make for a great business story.
And that brings us to listener emails, and this one comes from Gerry, who would love me to do an episode on Silvio Berlusconi — the former Italian prime minister who, of course, was also Italy's most successful businessperson back in the day.
Fantastic suggestion, Gerry, thanks so much, and thanks for listening.
And remember, if you have any comments, any corrections, or any story you'd like me to cover, email me at: info@gbspod.com
All the best, folks.