An English wine mogul who used to own the Liberty department store must pay millions of pounds in compensation over claims he misled investors via a ‘web of sham transactions and false trials’.
Richard Balfour-Lynn, co-founder of Balfour Winery, and two of his former colleagues have been told to pay £33million to shareholders of the defunct property firm MWB Group, following a ruling by the Takeover Appeal Board.
The board rejected Mr Balfour-Lynn’s attempt to overturn the decision, drawing a line under the long-running legal battle which the panel described as ‘the most complex investigation in their 56-year history’.
The dispute revolved around the company of which Mr Balfour-Lynn was chief executive before its collapse in 2013.
Mr Balfour-Lynn had acted in concert with two executives, Jagtar Singh and Richard Aspland-Robinson, to gain control of the business, the Takeover Appeal Board ruled.
Balfour Winery owners Richard Balfour-Lynn with his wife Leslie (left), standing with former PM Liz Truss (centre right) and Tory MP Helen Grant (right)
All three men were alleged to have concealed the extent of their shareholding from the market and failed to make a mandatory offer as required under takeover rules.
As a result, the Takeover Appeal Board found that the trio ‘should be required to pay compensation’ to MWB shareholders who lost out.
Mr Balfour-Lynn said he was only able to pay £2million towards the £33million sum in the form of an individual voluntary arrangement – which differs to bankruptcy proceedings where individuals can strike a deal with creditors to pay off their debts and make repayments.
When MWB collapsed, Mr Balfour-Lynn said he lost ‘everything he invested’.
But the Balfour Winery he founded in 2002 has since emerged as one of Britain’s most renowned vineyards, producing sparkling wines that are sold in Waitrose.
Currently, Mr Balfour-Lynn does not have a seat on the board and the business is solely owned by his wife Leslie.
In a statement, he said: ‘This case is unrelated to Balfour Winery, a very successful, independent business known for its award-winning English sparkling wine that is run by a young team of talented professionals.’
Omar Faruqui, director general of the panel, said individuals had ‘misled MWB Group shareholders and the market through a web of sham transactions and false trails stretching across many jurisdictions’.
He added: ‘Exposing their deceit and wrong-doing is testament to the skill and determination of the panel’s enforcement team.’
A spokesman for Mr Balfour-Lynn said the case related to a time when MWB was close to collapse, as directors battled to save the business.
They added: ‘Richard’s efforts to save the business from imminent collapse in an incredibly challenging financial landscape allowed it to survive for a further three years.
‘Such was his faith in the business, that he remained invested – never selling a single share – even following his resignation after 18 years at the company’s helm.’
