Former hotelier Richard Balfour-Lynn 'cold shouldered' by city watchdog

Former hotelier Richard Balfour-Lynn has been punished by city watchdog the Takeover Panel following a stock market scandal 12 years ago.

The issue centred around the former listed MWB Group, which at the time of the offences in 2009 owned Hotel du Vin and Malmaison, along with department store group Liberty.

The Takeover Panel – the UK’s regulatory body which ensures shareholders are treated equally during takeover bids – said there had been serious breaches of the Takeover Code in relation to misleading shareholders of the MWB Group.

Balfour-Lynn, former chief executive of MWB, joint finance director Jagtar Singh and eight other parties had concealed the extent of their ownership in the company from shareholders and the market through a “series of sham transactions involving offshore entities”.

In its ruling, the Takeover Panel said: “The other directors of MWB Group and the market generally were led to believe that shares comprising approximately 15% of MWB Group’s share capital were independently managed or controlled by Audley Capital Advisors LLP, when they were in fact controlled by Messrs Balfour-Lynn and Singh.”

As a result, Balfour-Lynn and Singh were sanctioned for growing their shareholding beyond 29.9% but not making a full offer for the business.

The Takeover Panel has now “cold-shouldered” the 10 men, which effectively means no entity regulated by the Financial Conduct Authority can act for them on any transaction subject to the Takeover Code.

Balfour-Lynn and Singh have both been "cold-shouldered" for five years, while the other eight will be subject to the ruling for between one and four years.

The Takeover Panel said: “We therefore remind all regulated firms that they should not deal with the individuals mentioned above, or their principals, on any transactions to which the code applies during the periods stated above.

"We also expect regulated firms to inform all approved persons at their firms that they should not deal with these individuals on such transactions.”

Singh, Balfour-Lynn and former executive director Richard Aspland-Robinson are required to pay £33m plus interest in compensation to those registered as shareholders of MWB Group as of 12 January 2010. 

Balfour-Lynn’s appeal to pay the compensation has been dismissed.

He stepped down from his position as chief executive of MWB Group Holdings in 2012 and the company fell into administration shortly after with the Malmaison and Hotel du Vin businesses put up for sale.

Balfour-Lynn founded a winery with his wife Leslie in 2002. Balfour Winery is now solely owned by Leslie, who also oversees a number of pubs and inns under the Balfour brand.

A spokesperson for Richard said: "This case concerns events that took place nearly 15 years ago and rules relating to shareholdings in publicly listed companies. In 2009, Richard was focused on trying to save MWB, a publicly listed company threatened with failure at the height of the global recession. He left the City soon after to retire in Kent with his family.

“Richard’s efforts saved MWB from imminent collapse in an incredibly challenging financial landscape and helped to protect the livelihoods of its 12,000 employees.

“This case is unrelated to Balfour Wines, a very successful, independent business known for its award-winning English sparkling wine that is run by a young team of talented professionals."