Sunday, 13 March 2011

Ireland's Celtic Tiger Excesses...

'Bang twins' may never get to run a business again...

POST-boom Ireland is awash with cautionary tales of Celtic Tiger excesses, as a rattle around the carcasses of fallen property developers and entrepreneurs will show. Few can compete with the so-called Bang twins for youth, glamour and tasteful extravagance.

Simon and Christian Stokes, the 35-year-old identical twins behind Bang Cafe and exclusive private members club, Residence, saw their entire business go bust with debts of €9m, €3m of which is owed to the tax man.

The debt may be in the ha'penny place compared with the eye-watering billions owed by some of their former customers. But their fall has been arguably steeper and more damning than some of the country's richest tycoons.

Last week, further humiliation was heaped on them with revelations that even as their businesses were going under, the twins spent €146,000 of company money in 18 months on designer shopping sprees, five star holidays and sumptuous Michelin-starred meals.

An 18-month analysis of credit card statements showed that the spending splurge continued up to June 2009, months before their businesses crashed and burned. Even worse was that while ploughing company money into their back pockets, bills, including taxes, went unpaid.

The twins, who prided themselves on their work ethic, were absent from the High Court last week. They are keeping their heads down, according to one acquaintance, grafting away in their father's restaurant business to keep things ticking over.

With an eye for a good suit, the Stokes twins were always going to be high maintenance but last week's disclosures in the High Court astonished even loyal supporters of the impeccably groomed pair.

They were paragons of boom-time prosperity. Their path to success was smoothed over by beautiful and high-achieving parents. Their father is male model-turned restaurateur, Jeff Stokes, who ran the Unicorn; their mother is Pia Bang, a Danish interior designer. The twins graduated from private school (Wesley College) to private business colleges and at 24 -- fashionable, polished and well-travelled -- they opened Bang, close to the Unicorn, on Merrion Row.

By their own admission, neither were academic but both are blessed with good looks, charm and an interest in fashion. Bang took off, thanks to a good chef, trendy clientele and corporate types keen to soak up some of the restaurant's cool factor.

Their next venture was the Clarendon Bar, purchased in 2002 for €2.7m. An expensive face-lift followed. They sold the building (to Bernard McNamara), leased it back and when the contract ran out, they walked away.

They owe McNamara's company €550,000.

In May 2008 they opened Residence, their private members club in a period house on St Stephen's Green.

Plenty were willing to pay the €1,600 annual subscription, including Johnny Ronan, who owned the building, fellow property developers, socialites and politicos.

According to social watchers, the twins didn't seem the types to get sucked in by the madness. Not for them choppers and race horses and 'come all ya's' in the sweaty Fianna Fail tent. They exuded Scandinavian cool, tied their neck scarves Continental style, and enjoyed holiday retreats from which they emerged with naturally golden suntans.

Neither smoked or got drunk. They have listed their off-duty activities as shopping, golf and cars -- Christian once bought a Ferrari rumoured to have been owned by David Beckham. Their private lives were settled and constant.

Simon married his wife, Conach, in 2003. Christian had a more circuitous route to marriage. He had a long term girlfriend followed by a romance with Christine Bleakley, the GMTV star who shares a couch with Grainne Seoige, before settling down with his wife, Louise Delaney, a jewellery designer, whom he hooked up with in New York. Both twins live with their families in Mount Merrion.

Simon sounded eminently sensible in sharing his financial habits in an interview some years ago: "I have two Visa cards, one for business and the other for pleasure. If I had a Brown Thomas card, I would be forever in debt so I have no store card. The business Visa is paid off monthly, but I'm not half as efficient with my personal one."

He may have had his own personal Visa, but he also used his business card for his pleasure. Liquidator Tom Murray analysed credit card statements charged to Mayfair, the company that operates Bang Cafe.

Simon emerged by far the bigger spender. He dropped €2,421 at the luxurious colonial-style retreat, the Coral Reef Club in Barbados and almost €2,000 at Blakes, the London hotel designed by Anouska Hempel.

He left the Gucci Store in New York €4,425 lighter and spent €2,621 in Brown Thomas in Dublin. He also supported the family business, spending €6,494 with his mother's business, Pia Bang Interiors in Dublin.

Christian Stokes, who was not as extravagant, spent €26,000 on personal 'stuff' such as €12,440 on Aer Lingus flights, €3,835 to Ashford Castle and Skovshoved Hotel in Denmark.

Simon once said that he believed he would never have to worry about money because their investments were so strong. But the truth was that their investments were walking wounded, making their shopping splurge all the more staggering. At the time they were cladding themselves in Gucci, their companies were haemorrhaging money.

They ploughed €3.4m into refitting Residence but the club never turned a profit since it opened.

It had cash flow problems so they used the PAYE and PRSI docked from the wages of 58 staff to keep the ailing company going.

They engaged in a series of inter-company loans that were later referred to corporate investigators.

The game was up in January last year when Residence's parent company, Missford, went into receivership with debts of €4m -- €1.2m to Revenue -- after Zurich Bank moved to recover a loan.

The twins were filleted by Mr Justice Peter Kelly who called the twins "delinquent directors" and suggested they had been engaged in "a form of thieving" by using tax money to trade.

Mayfair, the company that operates Bang Cafe, collapsed soon afterwards with debts of €2.4m. Auldcarn, which operated the Clarendon, was liquidated with debts of €2.3m, with more than €900,000 owed in taxes.

The financial discrepancies were so serious that in the High Court hearing last week, Thomas Murray, the liquidator for Mayfair, asked the court to disqualify the brothers from ever again running their own company.

The twins could be in serious trouble. They have been accused of trading while insolvent, could be prosecuted for alleged breaches of company law, and could be held personally liable for some of their companies' huge debts.

A bailout is unlikely. Their father's business went into liquidation a fortnight ago with debts of €2m.

Springmanor, the company behind the Unicorn, which he ran with Giorgio Cassari, ran up debts after investing heavily in another restaurant, Il Segreto. The Unicorn, the jewel in the business, survives; it was quietly transferred out of Springmanor to another company, linked to Giorgio Cassari, last year.

In an interview in 2003, Simon Stokes said: "We were 24 when the restaurant was launched and. . . we had little experience in book-keeping."

Apparently they never did get the hang of it, the longer they ran the business.

"I think it's a classic case of losing the distinction between what's your money and what the company money is. They are actually nice guys, fine guys to deal with but (there is) a lack of cognisance of the fact that the company and yourself are two different entities," said a source.

One of Residence's biggest supporters, Michael O'Doherty, the publisher of society magazine VIP, said he's done defending them.

"Simon and Christian are still friendly, polite guys, but what they did was inexcusable," he wrote last week.

"Perhaps they were living in complete denial, desperately trying to shut their mounting losses out of their minds. Or perhaps they simply didn't care, and had utter contempt for the people their companies owed money to. We'll never know."

Simon once said. "Even though it is hard to live without money, it is not the be all and end all," he said, a mantra they may have to keep chanting, but with feeling this time.

Report by Maeve Sheehan - Sunday Independent

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