Friday, February 19, 2010

Mystery of Prince Michael's £800,000 cash injection

When Prince Michael of Kent and his two siblings raised £2.1 million at Christie's in November from the sale of more than 300 heirlooms from their late parents' estate, it was widely assumed that the 67-year-old cousin of the Queen was in need of the windfall. Now, however, Mandrake can disclose how precarious Prince and Princess Michael's finances really are.

The couple, who this year must make their first annual payment of £120,000 to the Queen for the rental of their apartment at Kensington Palace, accumulated losses of almost £800,000 with Cantium Services, the umbrella firm for their commercial activities.

So dire are the latest accounts filed at Companies House that the directors of the consultancy firm felt the need to warn that its losses would "indicate a significant doubt about the company's ability to continue as a going concern".

The directors say they do not advise that it should be shut down only because a total of £800,000 in share capital has been pumped into the firm.

The couple have undertaken to keep supporting the company, which lost a further £39,806 in the year ending March 31 2009. They declare in the accounts that they will "continue to provide the necessary finance, either by way of additional share capital or by personal loans, to enable the company to continue".

Simon Astaire, their spokesman, declines to shed any light on how the firm accrued such heavy losses, or where the £800,000 came from. "We have a policy of never commenting on the Prince and Princess's finances," he tells me.

A friend of the couple, whose son, Lord Frederick Windsor, married the actress Sophie Winkleman in September, insists, however: "Don't you worry about their being hard up. Michael makes an awful lot of money in Russia."

The Prince and Princess sold their 18th century Gloucestershire retreat, Nether Lypiatt, for £5.75 million in 2006 to Lord Drayson, the Science Minister, whose company PowderJect was awarded a £32 million government contract for smallpox vaccine without competition in 2002, shortly after he donated £50,000 to the Labour Party. A Parliamentary inquiry identified no improper activity.

For the past seven years, the Queen paid the £10,000-a-month rental bill on the Prince and Princess's London apartment. The five-bedroom property had been a wedding gift from the monarch. However, in 2002, after protests from republican Labour MPs, Buckingham Palace announced that a commercial rent would be paid on the flat.