Dumfries House: the stately home at the heart of a royal crisis

Dumfries House, a stately home near Glasgow, has long been considered one of Britain’s most significant architectural jewels. It is now also at the heart of a crisis engulfing the royal family.

Michael Fawcett, a former aide to the Prince of Wales, has stepped down temporarily from his role as chief executive of the Prince’s Foundation amid claims about an honour relating to the Saudi businessman Mahfouz Marei Mubarak bin Mahfouz.

According to an investigation by the Sunday Times, Mahfouz, who is listed as a supporter on the Prince’s Foundation website, donated large sums to restoration projects of particular interest to Charles, including Dumfries House. Fawcett is alleged to have coordinated support for an honour for Mahfouz.

The stately home in East Ayrshire was built in the 1750s by the neoclassical master architect Robert Adam and his brothers, and furnished by Thomas Chippendale. The house is regarded as the most complete 18th-century home in Britain at the height of early Georgian taste and luxury. Heritage experts have described it as “jaw-dropping”, “exquisite” and “an absolute jewel”.

Fourteen years ago its previous owner, the Marquess of Bute, considered selling it with the Chippendale furniture set to be the centrepiece of the auction.

The prospect sparked an audacious campaign by Save Britain’s Heritage but it seemed doomed to failure until a last-minute intervention by the prince, who guaranteed a £20m loan which was raised by his charitable trust. This enabled the campaign fund to find the £45m needed to stop the sale. The total cost included the expense of running the property and opening it to the public. The loan by the trust was secured on land nearby.

The following year, Dumfries House was opened to visitors for the first time.

But the Prince’s Foundation had been left with a big financial hole following the 2008 financial collapse. The value of the land that the loan was secured against plummeted and questions were raised about whether the loan could be repaid.

Prince Charles turned to private donors to raise the money needed. These included Ruben Vardanyan, a well-known philanthropist who used to run the investment bank Troika Dialog. An independent arm of the bank managed a network of offshore companies that moved billions out of Russia.

An international investigation, led by the Guardian and BBC, found that the network, known as the Troika Laundromat, received money from companies linked to major fraud. Troika Dialog said it knew its clients and checked their backgrounds. It pointed out it had never flouted any regulations and had always operated in accordance with the rules of the day.

Through his UK-registered charity, Vardanyan raised a further £1.5m to refurbish one of the estate’s outbuildings to provide 16 luxury rooms that could be rented out to visitors. The structure has been renamed the Dilijan Building, after a school in Armenia sponsored by Vardanyan. A 10-year partnership was also created, with students from Dilijan attending regular courses at the estate, the Guardian reported at the time.

The money for the restoration came from Vardanyan and other Russian donors – not from the Troika Laundromat. By then, the investment had been sold, with Vardanyan taking his share of the reported $1bn (£720m) price. It is not suggested Vardanyan was complicit in any fraud.

Dumfries House was marred with scandal again when the Prince’s Foundation launched an ethics investigation last week, following allegations that individuals could pay £100,000 to secure a dinner with the prince and an overnight stay at Dumfries House, the Mail on Sunday reported.

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