Mellor and the ‘missing’ prof its from his £30m property deal
TORY grandee David Mellor is facing court action after investors in a £30million land deal he helped orchestrate were duped out of their profits, documents allege.
The former Cabinet minister is accused of making millions from the controversial purchase of a housing development site while others made huge losses.
Mr Mellor is said to have been pivotal in setting up a deal that encouraged a group of wealthy figures to buy a former landfill site near Reading as an investment vehicle for £12.3million.
Court papers allege the deal failed when planning permission was denied, but a consortium involving Mr Mellor later bought back the land and sold it to another developer for a profit. One backer – an Italian aristocrat – has now launched legal action against the former MP and his associates.
Count Giovanni Capodilista, 72, who invested in the original scheme, accuses the politician-turned-businessman and his partners of failing to act in the best interests of investors. They could be forced to repay some of the huge profits after the High Court last month rejected their attempt to have the case thrown out. Mr Mellor denies the claims.
The lawsuit revolves around the Sandford Farm site in Berkshire, which was bought in 2005 for £9million by a company with which an associate, Charles Balfour, and his business partner Douglas Maggs were involved.
Soon afterwards, the land was sold for £12.3million to Sandford Farm Properties Limited, a Jersey-based firm promoted by the pair.
They then touted the site as an investment vehicle, enticing wealthy individuals with a promise that the land would turn a profit once planning permission was granted.
Mr Mellor, 67, allegedly received a £500,000 ‘consultancy fee’.
Courtwood Holdings, a company owned by fund manager Mr Capodilista, was among those that hoped to make a sizeable return on the site. However, the company behind the development scheme was wound up in June 2009 due to mounting debt repayments and failure to secure planning permission.
Later that year, the Government decided the land could after all be turned into a housing estate and another company co-owned by Mr Maggs, Mr Balfour and Mr Mellor bought the land from receivers for £15million.
The purchase soon turned to huge profit when Sandford Farm was sold to building firm Taylor Wimpey for £27million. Some £12million in profit from the deal was allegedly shared between Mr Mellor, Mr Balfour and Mr Maggs. An estimated £18.25million share of profits from the eventual sale of dwellings on the site was also expected to be paid to the trio.
Mr Capodilista claims the group bought the property in
‘Left investors behind’
breach of a duty to investors, who they ‘ left behind’ while making profit from the eventual sale of the development. The trio do not deny benefiting from the deal but insist they did not hide funds from Mr Capodilista or other investors.
In the High Court last month, Mrs Justice Asplin ruled against an attempt to have the claim thrown out and the case may now go to a full hearing. Brie StevensHoare QC, representing Mr Mellor, said there was no evidence he knew what was happening.
In 2013 a Russian businessman was awarded a £1.4million payout when he lost £2million in the investment, having been ‘dishonestly’ recruited into the original scheme by the company behind it.
Mr Mellor, chief secretary to the Treasury under John Major, was forced to resign in 1992 after an affair with actress Antonia de Sancha. He divorced wife Judith and now lives in a £7million London riverside home with partner Lady Penelope Cobham.
The former Putney MP was forced to apologise in 2014 for calling a taxi driver a ‘sweaty, stupid little s***’ during a drunken rant.