Queensgate Investments LLP

Queensgate Investments LLP faced significant controversy in early 2021 when Jonathan Millet, the firm’s former Head of Acquisitions, filed a lawsuit alleging a toxic workplace culture rife with racism, anti-Semitism, Islamophobia, and homophobia. Millet, who is Jewish, claimed to have recordings capturing this bigotry, painting a disturbing picture of the firm’s internal environment. He also accused CEO Jason Kow of misleading investors and lenders by misattributing the firm’s entire cost base to a single investment, thereby fraudulently inflating fees. In a move that speaks volumes, Queensgate sought to have these proceedings held in private, citing potential economic damage from public disclosure. However, Judge James Tayler dismissed this request, emphasizing the principle of open justice and the public’s right to be informed about such serious allegations.

Settling the Lawsuit

Just days after losing the bid for privacy, Queensgate reached a settlement with Millet. While the terms remain undisclosed, the timing suggests a desire to quickly quash the negative publicity. The firm maintained that no staff had been harmed by its workplace culture, a claim that rings hollow against the backdrop of such serious allegations.

The Kensington Forum Hotel Debacle

Queensgate’s controversial practices aren’t confined to internal matters. In 2021, the firm proposed a £1 billion redevelopment of the Kensington Forum Hotel in London, aiming to replace the existing structure with two towers of 30 and 22 floors, along with a seven-story block. The plan included a 749-room hotel, 340 serviced apartments, and 62 affordable homes. Local residents, including television presenter Anne Robinson, vehemently opposed the project, citing concerns over its scale and impact on the community. Despite initial approval from Mayor Sadiq Khan, the scheme faced a public inquiry initiated by Housing Secretary Robert Jenrick. Queensgate eventually withdrew the application, offering no explanation but likely aiming to avoid further public scrutiny and potential rejection.

Aggressive Expansion Amid Controversy

Undeterred by these setbacks, Queensgate has pursued an aggressive expansion strategy. In 2019, the firm acquired four Grange Hotels in central London for approximately £1 billion, adding 1,345 rooms to its portfolio. The hotels were slated for extensive renovations under the Leonardo Royal and NYX brands.

Later that year, Queensgate purchased Freehand Hotels, a U.S. lifestyle brand with properties in Manhattan, Miami Beach, Los Angeles, and Chicago, for around $400 million. This acquisition positioned Queensgate as a significant player in the global hospitality market, with 19 hotels across 17 cities.

A Pattern of Concealment

Queensgate’s repeated attempts to suppress adverse information are troubling. The effort to hold Millet’s lawsuit in private and the abrupt withdrawal of the Kensington Forum Hotel project suggest a pattern of evading public scrutiny. Such actions raise questions about the firm’s transparency and accountability, qualities that are paramount in the investment world.

Implications for Investors and Regulators

For potential investors, these red flags are impossible to ignore. The allegations of fraudulent financial practices, coupled with a discriminatory workplace culture, indicate systemic issues within Queensgate. The firm’s attempts to censor information further exacerbate these concerns, suggesting a lack of integrity and openness.

Regulators should also take note. The Financial Conduct Authority (FCA) was reportedly informed of the allegations against Queensgate, but the outcomes of any investigations remain unclear. Given the severity of the claims, a thorough and transparent inquiry is warranted to protect investors and uphold the integrity of the financial markets.

Conclusion

Queensgate Investments LLP presents a case study in how not to conduct business. The firm’s history of alleged fraud, discrimination, and attempts to stifle public discourse should serve as a warning to investors and regulators alike. In an industry built on trust and transparency, Queensgate’s actions are a stark reminder of the perils that arise when these foundational principles are compromised.