Regulatory body The Takeover Panel said an Appeal Board has upheld a previous ruling that Balfour-Lynn and two others should pay compensation, following an investigation into share dealings at former property firm MWB Group.
Balfour-Lynn cofounded Balfour Winery, which is renowned for producing award-winning English sparkling wine, in 2002. He is also a property and retail tycoon who formerly owned Liberty, the famous department store on Regent Street in London.
Balfour-Lynn served as the CEO of a property investment firm called MWB Group until it entered administration in 2012.
MWB Group provided serviced office accommodation throughout the UK. The company was also involved in running Liberty, along with the Hotel du Vin and Malmaison hotel chains.
The Takeover Appeal Board found that Balfour-Lynn had acted in concert with two other executives, Jagtar Singh and Richard Aspland-Robinson, to gain control of that business.
They were accused of concealing the extent of their shareholding from the market, and they failed to make a mandatory offer, which is required under takeover rules.
An earlier ruling ordered the trio to pay compensation worth approximately £33 million to MWB shareholders who lost out.
Balfour-Lynn appealed the decision, but the Takeover Panel has now dismissed his appeal against the compensation order.
The Panel ‘cold-shouldered’ Balfour-Lynn and Singh, the former joint finance director of MWB Group, for five years. The ruling means they cannot work on any transaction regulated by the Takeover Code during that period.
Aspland-Robinson was ‘cold-shouldered’ for four years, and another seven men were ‘cold-shouldered’ for between one and four years.
In its ruling, the Takeover Panel said that ‘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’.
Omar Faruqui, director general of the panel, said the ruling concluded the most complex investigation in its 56-year history.
He said: ‘They misled MWB Group shareholders and the market through a web of sham transactions and false trails stretching across many jurisdictions.
‘Exposing their deceit and wrong-doing is testament to the skill and determination of the panel’s enforcement team.’
Balfour-Lynn responded to the earlier ruling by claiming that he was only able to pay £2 million towards the £33 million compensation order.
He said he ‘lost everything he invested’ when MWB Group was liquidated, and he proposed an individual voluntary arrangement with his creditors. In its ruling on Tuesday, the Panel confirmed that he should pay compensation to former MWB Group shareholders.
Balfour Winery, which is located in Kent, is now one of the leading English wine producers, with listings in retailers such as Waitrose. The company also owns an estate of pubs and bars in London, Kent, East Sussex and the Cotswolds.
However, Balfour-Lynn said that Balfour Winery is now solely owned by his wife Leslie, who co-founded the business in 2002.
Balfour-Lynn added in a statement: ‘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.’