Wine tycoon Richard Balfour-Lynn has been ordered to pay millions of pounds in compensation over claims he misled investors via a “web of sham transactions and false trails”.
The decision draws a line under a long-running legal battle against Mr Balfour-Lynn, the co-founder of Balfour Winery and former owner of London’s Liberty department store.
In its ruling, the Takeover Appeal Board rejected Mr Balfour-Lynn’s attempt to overturn an earlier decision that required him and two other colleagues to pay £33m in compensation.
The dispute revolved around the defunct property firm MWB Group, of which Mr Balfour-Lynn was chief executive before its collapse in 2013.
As part of its findings, the Takeover Appeal Board ruled that Mr Balfour-Lynn had acted in concert with two executives, Jagtar Singh and Richard Aspland-Robinson, to gain control of the business.
The trio 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.
In response to the decision, Mr Balfour-Lynn said he was only able to pay £2m towards the £33m sum in the form of an individual voluntary arrangement.
This process is an alternative to bankruptcy proceedings where individuals can strike a deal with creditors to pay off their debts and make repayments.
Mr Balfour-Lynn said he lost “everything he invested” when MWB collapsed.
However, 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.
This business is now solely owned by his wife Leslie, and Mr Balfour-Lynn does not have a seat on the board.
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.”
The request for the compensation comes after a lengthy investigation by regulators.
Omar Faruqui, director general of the panel, said the ruling concluded “the most complex investigation in the panel’s 56-year history”, where 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 battles 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.”