Words by ITV News Business and Economics Editor Joel Hills and Business and Economics Producer Jessica Omari
A property company owned by the billionaire Reuben brothers is being accused of pushing its pub tenants towards bankruptcy by refusing to cut rents for the period of the coronavirus lockdown.
David and Simon Reuben, who are estimated to be worth £16 billion and are part of a consortium looking to buy the Premier League football team Newcastle United, own the Wellington Pub Company which has 750 pubs and claims to be the “largest free of tie pub estate in the UK”.
Wellington has demanded full rent from some of its pub tenants who have been unable to trade since they were forced to close in March, and they fear their businesses will fail unless their bills are reduced.
Nick Holden and Kate Ahrens have run the Geese and Fountain, a Wellington-owned pub in Grantham, for almost five years.
The bar doors have been shut for fourteen weeks. During lockdown, the couple have tried selling food for take-away and delivery, and run virtual pub quizzes but have not been able to pay rent since March.
Wellington is pursuing Nick and Kate for the rent owed for April, May and June, and has told them it expects them to pay rent for the next quarter - they say that’s £25,000 they don’t have.
“There's no money to pay that rent,“ says Nick Holden. And there won't be unless either they agree not to demand it or the government step in with with more grants. So we're already bust. We're ghosts. We're kind of we're going through the motions of trying to be a pub. But the accounts say we owe more than we can possibly expect to pay back.”
'That's the choice I'm look at: be completely skint for years, or be bankrupt': Pub owner Kate Ahrens describes impact of coronavirus
Joanne Antick has run the King’s Arms, a Wellington-owned pub in Brentford, for 36 years. She and her sister appeared on the local ITV News when they first took the pub on in 1984.
On 1st March, she paid the rent for the thirteen weeks until 31st May. Twenty days later the pub was forced to close.
Wellington is refusing to reimburse her for the period she has been unable to trade and on 1st June sent her an invoice for the rent covering the three months until the end of August. She is refusing to pay it.
“I really don’t understand, how can we pay rent when we don’t have any income?” Anthick told us. “I really hope that [Wellington] realise we just can’t do this. I will go under.
According to the to the Sunday Times Rich List 2020, the Reuben brothers, who own the Wellington Pub Company, are the second richest people in the UK, behind James Dyson.
David and Simon Reuben were born in India and raised in London. They made a fortune through Trans World, the Russian aluminium group, following the collapse of the Soviet Union in the 1990s.
According to their website, in addition to pubs, the Reubens’ own racecourses, hotels, data centres and some prestigious property, much of it in central London.
The Reubens’ “Real Estate Holdings” include: The Millbank Centre & Millbank Tower; the John Lewis headquarters near Victoria; and the Burlington Arcade on Piccadilly.
'What they've told us if "pay your rent"': Landlord Nick Holden details his treatment by the Wellington group
The Reubens' wealth has been hurt by the coronavirus outbreak but they remain billionaires and in June they donated £80 million to fund a new college at Oxford University, which will be called “Reuben College”.
David and Simon Reuben are also backing of a bid to takeover Newcastle United by Amanda Staverley’s PCP Capital Partners.
James Reuben, the son of David Reuben, is a director of one of Wellington’s holding companies. In the last year he has donated more than half a million pounds to the Conservative party.
The row between the Reubens’ tenants and their pub company has intensified since the prime minister announced that some pubs and bars will be able to reopen from 4th July.
The government recently extended rules designed to give businesses breathing space to pay debts incurred during lockdown. In the case of pubs, it has published a voluntary code of practice to advise landlords and tenants on how to resolve disputes.
The code states: "Landlords should be willing to consider a reasonable case put forward by a tenant in such distress and whether some temporary arrangement the landlord can reasonably offer might enable the tenant to survive."
It adds: "Landlords seeking to refuse concessions should be clear with their tenants about why they are doing so. This means providing a reasonable explanation of their decision which clearly takes into account the information provided by the tenant."
The Wellington website states that the company will “seek to support our tenants by offering a 3 month rent-free period, as appropriate” but the tenants we have spoken to say their attempts to secure rent reductions or rent holidays have been turned down.
One tenant showed us an email, dated 9th June, which they received from Criterion Asset Management, a company owned by the Reubens which manages the pubs on behalf of Wellington. The email said “Wellington are not offering any rent free”.
More needs to be done to help landlords through crisis, Joanne Antick says
Some tenants worry that their businesses will struggle even when they are able to open their doors again and they don’t understand why a company backed by the Reubens is unwilling to accept a share of the losses they are incurring.
“We're not asking [the Reubens] to go without,” says Nick Holden. “They just have to not make as much profit this year as they expected. And that that can't be too much to ask.”
At the King’s Arms, Joanne Antick is despairing.
“They [Reubens] are successful people which I admire,” she told us. “God, I admire anybody that’s worked hard and is successful but with success comes responsibility. I’m successful in my small way. They’re so successful and they bought all these pubs. Eight hundred pubs. And with that they bought my life and they’ve got to be responsible ... I need help”
A spokesperson for Wellington said: “Wellington is a standalone business and has obligations in the form of a securitisation for which payments must be made quarterly.
“We can confirm that rent was invoiced in June in accordance with lease/tenancy agreements in place and other legal requirements. The invoices were sent out with a covering note and reference to the publicly available statement [which is] explicit that action against rental arrears arising solely due to the closure period of pubs caused by Covid-19 will not be taken.
“The number of properties involved means it takes time to contact all tenants and this exercise is ongoing.”
Wellington says it has agreed “plans of one type or another” to help 100 of its tenants and “this number is growing weekly”.