The businessman who founded Kent’s leading winery has been ordered to pay millions of pounds in compensation after he misled shareholders through “a series of sham transactions”.

Richard Balfour-Lynn is best known in the county as the founder of the Hush Heath Winery in Staplehurst, along with his wife Leslie.

But before that, he was for 18 years the chief executive of a property company called MWB Group, which at the time of the dispute in 2009 owned London’s Liberty department store in Regent Street, and the Malmaison and Hotel du Vin hotel chains. It also provided serviced office accommodation across the UK.

The company went into liquidation in 2012.

During what Omar Faruqui, the director general of the Takeover Panel, said had been “the most complex investigation in the panel’s 56-year history,” it was determined that Mr Balfour-Lynn, and two other MWB executives, Jagtar Singh and Richard Aspland-Robinson, had attempted to gain control of the business, by concealing the extent of their shareholding from the market and failing to make a mandatory offer as required under takeover rules.

As a result, the Takeover Appeal Board found the trio should pay compensation of around £32.5m plus interest to the MWB shareholders who lost out. The exact amount is still to be determined.

The Takeover Panel said there had been “serious breaches” of the Takeover Code.

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

The panel said they had concealed the extent of their ownership in the company from shareholders and the market through a “series of sham transactions involving offshore entities.”

Mr Balfour-Lynn, Mr Singh and eight others have also been officially given the “cold-shoulder” by the Takeover Panel following the scandal, which means that no entity regulated by the Financial Conduct Authority can act for them on any transaction subject to the Takeover Code.

Mr Balfour-Lynn and Mr Singh have both been "cold-shouldered" for five years, while the other eight have been “cold-shouldered” for between one and four years.

The panel said: “Regulated firms should not deal with these individuals on any transactions to which the code applies during these time periods.”

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

Mr Balfour-Lynn was not available for comment as he was “away, travelling”, but his spokesman said: "This case relates to matters that took place nearly 15 years ago concerning retail and property company Marylebone Warwick Balfour (MWB) which Richard Balfour-Lynn co-founded in 1994 and ran, as CEO, very successfully for many years.

“By the autumn of 2009, MWB was facing imminent collapse due to the financial crash the previous year, and the resulting recession, which hit the UK property market and financial sector particularly hard.”

“With MWB’s assets much reduced in value, long-term investors, including two banks which themselves had failed, were demanding their money back.

“Mr Balfour-Lynn’s sole focus at that time was to save the business and the livelihoods of 12,000 employees, including negotiating extensively with the banks and other creditors and by raising almost £25m in a rights issue which included him investing a further £2.67million of his own money.

“The rescue efforts during one of the severest recessions of recent times enabled MWB to survive for three more years before it eventually collapsed in 2012, sometime after he had resigned.

The spokesman said: “Such was his faith in the company, that he never sold a single share and remained invested until the end.

“He retired from his career in the City in 2012."

It has been reported that Mr Balfour-Lynn has made an individual voluntary arrangement (IVA) offer to pay £2m towards the sum owed, saying he could not afford more.

The case is unrelated to the Balfour Winery, which Mr Balfour-Lynn founded in 2002 and has since gained a reputation for the quality of its sparkling wines. It also owns an estate of pubs and bars in London, Kent, East Sussex and the Cotswolds.

Mr Balfour-Lynn is no longer a director of the company and all the shares are in his wife’s name.

At one stage, Mr Balfour-Lynn had ambitions of buying the lease on the Archbishop’s Palace in Maidstone and turning it into a boutique hotel with an associated wine and viticultural education centre, saying it would put the county town on the wine map in a way similar to the Champagne region in France.

Maidstone council gave his company a 16-month exclusivity deal to develop the project, but in the end it came to nothing with Mr Balfour-Lynn withdrawing in March 2023.