A bitter row between a major London landlord and one of its largest shareholders has descended into threats of legal action this morning.
FTSE 250 property giant Shaftesbury Group, which owns large parts of the West End including much of Carnaby Street and Chinatown, is braced for a court battle with Hong Kong billionaire Samuel Tak Lee in a sign that relations between the two sides have sunk to a new low.
Lee, who owns an approximately 26 per cent cent holding in Shaftesbury, is embroiled in a public and heated dispute with the landlord over a £265m fundraising that the firm carried out in December 2017.
The tycoon has accused the firm of using the 2017 capital raising to dilute his ownership interest and block him from making a future takeover bid, while Shaftesbury argues that the new capital was needed to fund more acquisitions in its West End property portfolio.
In a letter to the Stock Exchange yesterday Shaftesbury warned that there may be civil court proceedings as a result of a letter before action sent to the firm by Lee's representatives, who are seeking £10m in alleged losses from the share placing.
Shaftesbury said that it was "disappointed that Mr Lee is considering this course of action", adding that it "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 spokesperson for Lee, who owns a number of major London properties, warned this morning that if its concerns were not addressed by the board, "there will be no alternative but to put the matter before the court for its determination".
Sources close to the matter say that court action is now the most likely scenario.
The row comes amid mounting speculation of a takeover tussle between Lee and Norges Bank Investment Management (NBIM), which also owns more than 25 per cent of the group, with both investors upping their stake in the firm over recent months.
In February the war of words between the two sides escalated as Lee vowed to against the reappointment of the property giant's directors in its Annual General Meeting (AGM).
Lee has repeatedly said he will block resolutions to allow the company to raise more cash through new share issues, but in February he also opposed the remuneration and reappointment of Shaftesbury’s chairman, chief executive and chief financial officer for the first time.