Chinawhite's cash crisis

11 April 2012

It's a typical night at Chinawhite. Inside the darkened VIP area, long-limbed, ski-tanned women - most over 30 - are draped over the couchettes. By the main bar, a group of baseball-capped public schoolboys try to impersonate cockney market traders and look cool. On the pavement just off Regent's Street, a small queue has formed of hopefuls wanting to join the Marlboro Lights

beau monde

Not entirely true, of course. In the fickle, ephemeral world of nightclubs, Chinawhite was once "the" club: Madonna and Gwyneth Paltrow were among its champions and, for a while, it was achingly trendy and near impossible to get into. But as the celebrity caravan moves on - abandoning it in favour of others such as Funky Buddha, Rouge and Boujis - Chinawhite has become a hangout more for girls in search of a Premiership footballer than a true A-list star.

Last week, in a scene which sums up what Chinawhite once was but has become, Prince Harry was almost seduced on his bar stool by a former lapdancer, Lauren Pope. Harry, of course, is the kind of client the club still wants; Lauren, on the other hand, is what they normally get.

But what few of its regulars will know is how closely this nightly landmark - which had a private tent at the Cartier Polo match last year, again patronised by Prince Harry - almost disappeared from the scene as spectacularly as it first arrived.

Even more intriguing is the secretive Jordanian family who are one of the club's main shareholders: in a version of the famous Remington electric shaver commercial, a member of the family was once refused entry. So incensed was he that he decided that, if he couldn't get in, he'd simply buy the business instead.

The real story of Chinawhite - so famous, seemingly so successful and yet so precarious - came to a dramatic head late last year. Just before Christmas, the management company which owns the club, Teton Valley Trading, went into liquidation with debts of nearly £1 million.

Its creditors included a south London company, Parsley In Time, which supplied the club with glassware ("the very glasses Harry was drinking out of," a company spokesman said yesterday), owing £2,530. More seriously, Chinawhite owed the Inland Revenue £267,518 and Customs and Excise a further £260,694, as well as a host of other creditors: its water suppliers £6,000, its Mayfair printers another £6,000.

It is a long way from five years ago, when one- time restaurateur Rory Keegan and e n t r e p r e n e u r Jeremy Hartley had a vision of establishing a new club in London which would overtake Tramp (seen as too Seventies) and the Ministry of Sound (seen as too Essex).

Keegan, son of a British air cargo tycoon, had previously worked as a theatrical impresario, producing Les Liaisons Dangereuses, before launching the nightclub. Hartley, the " backroom boy", was, and remains, the business brain, a wily operator: he describes himself as an entertainments and music entrepreneur, who hopes to turn the Chinawhite name into a worldwide brand.

The result was an exclusive and cliquey nightclub which became an instant hit: Madonna held a private party there. And with its clever and snooty door policy, the club could justifiably claim to be the hottest and most talked-about nightclub in town.

With a guest membership said to include 2,000 of the most eligible socialites in London (each paying around £300 a year for the privilege), the club was seen as a licence for printing money, charging off-the-street punters (at least those allowed in) £10 for entrance; on a good night, 1,500 people could crowd into the small, sweaty maze of rooms.

Surprisingly for such an exclusive club, drinks start from around £5. Members invited to join at the start included, inevitably, the likes of Tara Palmer-Tomkinson and Tamara Beckwith, but as the years went on, Chinawhite lost its initial cachet.

Indeed, this week, while its owners - who have formed a new company to keep the business running - deny they are in financial trouble, others in the club business are pointing the finger. "The problem with Chinawhite," a rival club owner says, "is that it has become a victim of its own success. It was full of celebrities most nights, but when you have people like that in the club, they don't pay to get in, nor do their huge posse of hangers-on. And they expect to be fuelled with free drinks all night.

"The publicity you get with celebrities is all well and good but if you are that exclusive a club, you aren't going to let in someone who has just read about your place in that morning's papers. So you're stuck: the celebs come to take what they can get for free and you aren't going to let in the people who will spend money. Publicity doesn't pay the suppliers' bills."

The financial problems began 18 months ago. According to financial records that the Evening Standard has seen, Chinawhite appears not to have been generating enough of the sort of revenue necessary to keep its management company afloat. Although the company had more than £300,000 in the bank, it was owed more than £150,000 by other creditors.

By the summer of last year, the situation was untenable. With its financial records filed late to Companies House by December last year, Teton Valley Trading was wound up late last year under the 1986 Insolvency Act. Around the same time, four of the club's owners - including Hartley and three partners - formed a new company, FirstFind, which now owns the club.

When contacted by the Standard, many of the companies owed money claimed that the club's owners have tried their best to make good their debts. "We've come to an arrangement," says Sarah Woodhead, a party organiser who was owed £21,150. Insiders add that the club's survival owes much to the involvement of secretive Jordanian businessman Eyhab Jumean, 40. When Chinawhite first opened, Jumean, who owned a flat in Kensington at the time, is said to have been refused entry: Eyhab was furious at such a snub, and eventually contacted Keegan and Hartley with a view to investing.

Jumean himself remains elusive. "It's very weird," his brother, OJ, told me from the family home in Amman, "but he won't even give his own family, the address where he lives in London. The only way we can get hold of him is e-mail. We can't even call him."

He describes himself in financial records as a "property developer" and lists an address in a small apartment complex in a suburb of the Jordanian capital, although his family say he is rarely in the Middle East. "We think he's in America but we don't really know," his brother said yesterday.

What is known is that his family money comes from a travel-and-tourism business in Jordan: Eyhab's father, Shafiq, is a retired general and the former Jordanian consul to the Philippines.

The closest this publicity-shy family has ever come to scandal thus far is when, nearly 10 years ago, General Jumean was once called to testify about the death of the family's then housemaid.

Elisa Salem, then aged 26, fell to her death from the fourth floor of the Jumeans' apartment in Amman; according to Jordanian newspapers, her relatives claimed that she was maltreated by her employers (a claim which was proven to be not true) but such was the furore that the then Philippine President Fidel Ramos ordered an investigation into the case.

"We prefer to keep to ourselves," says OJ. "I do not want to say any more about my brother or my family."

At Chinawhite last night, no one had heard of Jumean; even the bouncers seemed bemused. He is said to be friends of the Dubai royal family and has business interests worldwide.

What is certain is that while the full extent of his investmentare unknown, Jumean can be seen as a man who has helped keep Chinawhite afloat.

Yesterday, in a statement, Mr. Hartley said: "Teton Valley Trading Company Ltd, the company that formally operated Chinawhite, ceased trading in May 2003 and was put into liquidation in December as a result of business investments unrelated to the operation of the London club that simply didn't work out. The new company, Firstfind Ltd, that has operated Chinawhite over the past year, has been trading profitably ever since and continues to do so."

For now, at least, party Prince Harry can continue to let loose there. You can imagine how grateful its owners are for that.

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