Canary Wharf chief attacks `nightmare' role of US banks

BY JOHN WILLCOCK

Financial Correspondent

Sir Peter Levene yesterday launched a scathing attack on North American members of the banking consortium which until this week owned the London property development, Canary Wharf, describing them as "abominable, awful - the worst type of people to work with".

Sir Peter plans to leave his post as chief executive of the development shortly, following its takeover by a syndicate of international investors led by Paul Reichmann.

Sir Peter said that if the rescue of the Docklands project after its collapse in 1992 had been left to Citibank and Chemical Bank - members of the 11- strong consortium - Canary Wharf would have been left as "a wasteland".

Sir Peter also criticised Royal Bank of Canada, Canadian Imperial Bank of Commerce and Credit Suisse - "the worst of all," he added.

The former head of defence procurement was brought in by the banks to head Canary Wharf when it was refloated out of administration in December 1993. In a highly unusual move, the main bankers to the project took over ownership, hoping to recover their loans when the property market improved.

At that time the banks did not expect all their money back until 2007, Sir Peter said yesterday. Then last year the recovery of Canary Wharf had gathered such pace that buyers had emerged, and a syndicate led by Paul Reichmann, the original developer, bought it for pounds 800m in a deal completed this week.

This pounds 800m covered everything the banks had originally lent to the Canary Wharf project but Sir Peter said the North American banks were "very lucky and very ungrateful".

Mr Reichmann asked Sir Peter to stay on, but he refused and is considering his options. He had a successful career in industry before joining the MoD, and is still an efficiency adviser to the Prime Minister.

The two UK banks, Lloyds and Barclays, "tried very hard to help. But the North American banks were a nightmare. They got all their money back within two years - a miracle - but it was no thanks to them. The people they sent to work with us were totally uncommercial," Sir Peter said.

"I can't believe that world-calibre banks could send us people like that. Every time we had requirements for taking things forward, they tried to squash them.

"They were the most abominable, awful people. They didn't understand what they were doing. Left to them it would have remained a disaster. If they had put management in place and left the job to us - fine. But every forward step we took, they tried to second-guess us - and they had never run a business in their lives."

It is rare in the UK for banks to take equity ownership of a failed enterprise and Lloyds insisted at the time that Canary Wharf would not form a precedent. The sheer size of the project, however, made it "too big to fail".

At Canary Wharf, Sir Peter said that his main job had been to convince both prospective tenants and opinion-formers that the early shortage of transport links had been remedied.

From being half-empty when he took over, Canary Wharf is around 80 per cent let. Readers Digest is about to confirm it is taking 140,000 square feet of space.