Shaftesbury’s biggest shareholder threatens legal action

The largest shareholder of property developer Shaftesbury has threatened to take the company to court over an ongoing dispute.

Samuel Tak Lee, who has a 26% stake in the company, has written to the firm saying he could seek restitution for alleged losses of £10 million.

The claim relates to Shaftesbury’s December 2017 share placing, which Mr Lee alleges was intended to dilute his ownership interest and hamper any attempts to launch a takeover bid.

Shaftesbury, which owns a swathe of central London retail property in the likes of Chinatown and Carnaby Street, raised money in 2017 through the placing of new shares at a 5% discount to the previous day’s closing price.

It said the financing would be used to acquire properties including two sites in Soho.

In a statement to the market on Wednesday, Shaftesbury said it was “disappointed” that Mr Lee was considering legal action.

“In the 17 months since the placing, the board has responded promptly and appropriately to numerous letters from Mr Lee’s lawyers.

“The board has also extended numerous invitations to enter a dialogue with Mr Lee, yet on each occasion he has chosen not to respond or declined the opportunity to engage directly with the company.”

A representative for Mr Lee, himself a notable London landlord whose properties include the historic Langham Estate, refuted this version of events, saying the board had “failed to engage meaningfully with Mr Lee over his concerns at every stage of this process”.

The spokesman added: “As Mr Lee explained in his statements to shareholders in the lead-up to Shaftesbury’s 2018 and 2019 AGMs, his investigations indicate this capital raising was pursued for an improper purpose, including with a view to diluting his ownership interest and making any potential future takeover bid by him more difficult.

“These are contrary to the purposes stated by Shaftesbury’s board to the market at the time of the capital raising.”

In February, Mr Lee voted against the reappointment of Shaftesbury’s CEO, CFO and chairman and opposed director pay packages at its annual meeting.