The Duke of York’s lavish lifestyle is well documented, from the luxury ski chalet in Verbier, to top-of-the-range Bentleys and a penchant for upmarket golf resorts, yachts and exclusive holiday destinations.
Yet the source of his wealth has long remained a mystery, ill-explained by his modest Navy pension and annual £250,000 stipend from the Queen.
A cache of newly unearthed bank documents now goes some way to shedding light on the issue, suggesting that a £1.5 million bank loan was paid off by his friend, David Rowland.
The controversial Tory donor is said to have transferred £1.5 million to the Duke in December 2017, just days after he had borrowed a similar amount from Banque Havilland, the tiny Luxembourg bank that the Rowlands bought in 2009.
The £1.5 million loan that the Duke took out in November 2017 replaced a previous £1.25 million loan that had been extended or increased 10 times since 2015, according to Bloomberg News.
The additional £250,000 was earmarked for “general working capital and living expenses”. At the time, the Duke was a working member of the Royal family.
The unsecured loan was at odds with “the risk appetite of the bank,” according to an internal credit application. However, it was approved in part because it opened up “further business potential with the Royal family” and would be honoured by the Queen.
A document seen by Bloomberg said: “While the (increased) loan is unsecured and granted solely against the credibility of the applicant, both his position and that his mother is the sovereign monarch of the United Kingdom should provide access to funds for repayment if need be.”
Further questions raised
The loan was due in March 2018, but was repaid early using £1,503,000 transferred to the Duke from a Guernsey-registered company controlled by the Rowland family, it is claimed.
The revelations will raise further questions about the Duke’s relationship with Mr Rowland. The pair have been friends since at least 2005, when the Duke flew to Guernsey to unveil a bronze statue of the financier at his home.
Mr Rowland, a former scrap metal dealer, was once described as a “shady financier” in Parliament and declined to take up the post of Conservative Party treasurer in 2010 after attention was drawn to his business dealings and private life.
In 2010, he was invited to Balmoral, where he reportedly met the Queen and enjoyed tea with the Prince of Wales.
That same year, Mr Rowland, who is said to have co-owned an offshore fund in the British Virgin Islands with the Duke, reportedly paid £40,000 to help clear the Duchess of York’s debts.
The Duke was later forced to deny soliciting payment from the businessman as it emerged the money was transferred after he had officially opened the first branch of Banque Havilland in 2009.
Three years later, he opened the bank’s Monaco branch. In 2018, the year after Mr Rowland apparently paid off his loan, the Duke appeared at the opening ceremony for the bank’s joint venture with Abu Dhabi’s sovereign wealth fund.
Friendship prompts accusations
Their friendship later prompted accusations that the Duke had repeatedly exploited his role as Britain’s trade envoy to further his own financial interests.
Buckingham Palace’s official gift policy states that nothing should be accepted which would, or might appear to, place that member of the Royal family “under any obligation to the donor” and that money should never be accepted in connection with an official engagement or duty.
A spokesman for the Duke said on Tuesday: “The Duke is entitled to a degree of privacy in conducting his entirely legitimate personal financial affairs, on which all appropriate accounting measures are undertaken and all taxes duly paid.”
A spokesman for the bank said they could not comment on alleged clients, transactions, loans and refinancings. They added: “The bank is independently run and David Rowland is not and has never been an employee or director of it. The bank cannot therefore comment on matters relating to him.
“Compliance with legal and regulatory requirements are the foremost priority of the bank. Any inference of wrongdoing is categorically denied.”
Mr Rowland, 76, who has donated more than £6 million to the Conservative Party, did not respond to Bloomberg.