Mellor’s lust for money and why he’s being sued over a £30m land deal
by Ruth Sunderland
Moderation is not a word one would associate with david Mellor. Whatever his passion — be it music, football or business — he pursues it with the kind of energy and commitment that would leave the finest athlete panting at the starting block.
So says the breathless blurb on the website of Performing artistes which promotes the former tory Cabinet minister as an after-dinner speaker, for which he charges thousands of pounds.
He is considered a star turn in the corporate world, where many are keen to learn from his experience.
although it stretches credulity to associate the portly, gap-toothed 67-year-old with ‘the finest athlete’, he is certainly energetic in pursuing his ‘passions’.
in the early nineties, while a married minister in John Major’s government, one of his passions was for young jobbing actress antonia de Sancha. ‘You have absolutely exhausted me,’ he told her after one encounter in a seedy rented flat. ‘i feel seriously knackered.’
Yet there is one activity of which Mellor never tires: making money . . . and lots of it. it is his zeal in this regard that has embroiled him in a number of courtroom fights.
as a trained lawyer — he took silk in 1987 — he seems to have an appetite for litigation and is preparing to take on his latest legal spat. it centres on a case in which he is named as one of 12 individual and corporate defendants in a highly complex housing development scheme.
Mellor is alleged to have helped to set up a £30 million deal which involved companies in offshore tax havens and netted large sums for himself and his associates.
other investors, however, including a disgruntled italian count and an angry russian oilman, made huge losses. a court case has now ensued.
Mellor has vigorously denied through his solicitors that he is personally accused of breaking investors’ trust. He has otherwise refused to comment.
However, a company in which he is a director and shareholder is alleged to have breached its so-called ‘fiduciary duty’ (the legal duty to act solely in investors’ best interests).
the case is just another chapter in Mellor’s eventful business career.
Since losing his job as an MP, he has leveraged his numerous contacts in the arab world into consultancy deals and bagged a six-figure sum by acting as an adviser to one of Prince andrew’s glamorous ex-girlfriends.
then there was a takeover of an antiques and fine art dealer that curdled into an acrimonious legal spat.
Mellor, though, is best known to the public for his work in the media.
He has a Saturday morning radio talk show and writes newspaper columns on opera and sport, which might strike those with long memories as ironic — unkind souls might even say hypocritical. For around the time of his extra-marital affair with antonia de Sancha, he was Culture Secretary with responsibility for the media and appeared to support tough new regulation of the Press.
(not that he’s ever lacked front. days after his tawdry liaison was exposed, he corralled his wife, Judith, their two sons and her parents into posing for the cameras at a gate on the in-laws’ Sussex estate in a cynical attempt to play happy families — it didn’t prevent his subsequent divorce.)
indulging the lifestyle to which Mellor has accustomed himself, though, would not be easy on the earnings of such media work.
Fortunately for him and his longtime partner, Lady (Penelope) Cobham, for whom he left his long-suffering wife, he has also had large flows of income from his business dealings.
these have frequently led the pugnacious ex-tory minister into disputes. the most recent pits him against a company called Courtwood, owned by 72-year-old italian count Giovanni emo Capodilista.
THe Count, whose ancestors were among the founding dynasties of the Venetian republic, is one of the legions of minor european aristocracy who inhabit London’s smart riverside enclave in Chelsea and who socialise with minor royalty, such as Prince and Princess Michael of Kent.
investing in a property scheme set up by Mellor and his associates, however, has led the Count to an altogether less enjoyable venue: the royal Courts of Justice.
the lawsuit brought by Courtwood, which is based in the tax haven of Panama, concerns a complicated series of deals relating to a property development scheme on a former landfill site near reading, Berks.
Courtwood is suing Mellor and 11 other defendants, including Mellor’s friend and business associate Charles Balfour, heir presumptive to his brother, the earl of Balfour. Charles’s wife, Svea, is named as a defendant, as is property entrepreneur douglas Maggs, another long-time business associate of Mellor.
if the claim is successful, and it will no doubt be vehemently defended, they and their companies may be forced to hand over some of the profits they made on the deal after attempts to have the case thrown out were rejected in the High Court last month.
a number of firms with which Mellor is associated are listed on the lawsuit, including Wharf Land investments Limited. Currently in administration, it played a pivotal part in the project.
Mellor and Maggs are 50-50 shareholders in the business, with both listed as directors, according to documents from data intelligence group duedil.
OtHer defendants in the case are tamadot, Charleston and Chateau — all firms registered in the tax haven of nevis in the West indies. these are said in the court documents to be Mellor’s corporate vehicles.
the dispute centres on the Berkshire plot of land, Sandford Farm, and involves a number of tangled transactions dating back to 2005.
according to court papers, Mellor is said to have received large profits and lucrative fees along the way.
the complicated chain of events involved four deals.
First, deal no. 1 in 2005. this was the purchase for £9 million of the Sandford Farm land by a company called Bound oak Properties. this was said to be controlled by Mellor’s friends Maggs and Balfour — who were introduced by the former MP — alongside Wharf Land investments, which was coowned by Mellor and Maggs.
then there was deal no. 2. the land was sold immediately for a profit of around £3 million to another company, Sandford Farm Properties Ltd, incorporated in Jersey and also said to be controlled by Maggs, Balfour and Wharf Land investments.
even at this fledgling stage, the project was paying off for Mellor. From the £3million profits, one of his companies, dM Consultancy, was paid £500,000, according to court papers.
the rest was said to have been divided between corporate vehicles controlled by Mellor, Maggs and Balfour’s wife’s trust fund, among others.
the next stage was for Maggs and Balfour to attract investors in Sandford Farm Properties Ltd. the idea was the company would get planning permission to develop the land and sell it on, at which point, investors would also get their share of the profit.
tellingly, a company owned by Mellor and Maggs agreed to provide advice
on planning and on refinancing of the company.
Courtwood, the Italian count’s company, was one of those hoping to make a big return — but he alleges things did not go as smoothly as he might have hoped.
Wokingham District Council refused to grant planning permission for the land. And by 2009, Sandford Farm Properties was running out of money and had fallen into arrears with its lender, Abbey National Treasury Services.
Mellor and Maggs’s company, Wharf Land Investments, then presented a petition to wind up Sandford Farm Properties and, in the summer of 2009, Abbey National appointed receivers.
Mellor and his colleagues, however, had not given up on the venture. Quite the contrary: they were about to embark on Deal No. 3.
Through a Jersey-registered firm, a company ultimately owned by Mellor, Maggs and Mr and Mrs Balfour, they bought the land from the receivers for £15 million, according to the court documents.
Just months later, in November 2009, residential planning permission for the site was finally granted on appeal by the Secretary of State.
This paved the way for Deal No. 4. In August 2010, they sold part of Sandford Farm to housebuilding giant Taylor Wimpey for £27 million. In other words, they made a profit of £12 million.
Taylor Wimpey also agreed to pay an estimated £18million share of the profits from the eventual sale of the homes built on the land.
In total, that took the potential profits to more than £30 million, though Mellor is understood not to be part of the latter agreement.
Now, in its lawsuit, the Italian count’s company claims there was a ‘breach of fiduciary duty’ by Mellor and Maggs’ company, Wharf Land Investments, to investors who were left behind when the big profits were made.
LIke any complicated, multi-layered financial deal, the facts are confusing, but the key point of Count Capodilista’s claim is simple. He and other investors were left in the cold while Mellor and his chums cashed in.
In fairness, it must be pointed out that the legal proceedings are at an early stage and it remains to be seen whether the court will decide that there was a breach of fiduciary duty or not. Neither Mellor nor any of the other defendants have yet put their side of the story.
Interestingly, though, the Sandford Park project has already been involved in court proceedings, although Mellor was not a defendant. Four years ago, a Russian businessman who lost £2million he’d invested in a property deal in 2005 was awarded £1.4 million damages.
The Court of Appeal subsequently upheld the initial finding that five defendants, including Mellor’s friends Maggs and Balfour, had ‘acted dishonestly’ and had committed the ‘tort of deceit’.
Mellor was not named — but his and Maggs’s venture, Wharf Land Investments, was listed as one of the five defendants.
When it comes to a legal wrangle between a controversial former Cabinet minister and an Italian aristocrat who uses Panama-based companies to further his fortune, it’s hard to know whom you should feel less sorry for.
Of course, this isn’t the first time that David Mellor has been mixed up in legal tussles.
There was the occasion when he was up against 67-year-old semiretired accountant Philip Afia over the sum of £6,750, relating to a bid Mellor was part of to take over a top London antiques dealer.
Afia, said it took two years for Mellor to pay up. He said: ‘Why should he get away with it? He just seems to be driven by money.’
There was also a bitter legal battle with the family who owned the antiques dealer. Mellor and two associates accused the elderly grandson of the founder of having sold a pair of counterfeit chairs to the Getty Museum for £175,000 in, and of selling a painting said to be by Sir Winston Churchill, while knowing it to be a fake.
Most of the charges were struck out by a judge and the case was settled out of court.
Well-connected Mellor, it must be said, has an opulent lifestyle.
He and Penelope Cobham share a sumptuous home on St katharine’s Dock by the Thames in the shadow of Tower Bridge.
Penny, 62, was married to Viscount Cobham before she started her relationship with Mellor. During her marriage, she was a successful businesswoman — selling an undeveloped Necker Island in the Caribbean to a young Richard Branson and turning the family home, Hagley Hall, into a conference centre.
Despite, or more likely because of, his confrontational style, Mellor has been a successful practitioner of the art of money-making ever since he left politics.
Over the years, he has made strong links with the Arab world and won consultancy work with major firms such as engineering giant GkN and defence giant BAe Systems. Mellor helped Qatari investors when they were considering a takeover bid for supermarket group Sainsbury’s in 2007.
His Arab contacts came into play once again when he advised Amanda Staveley, a former girlfriend of Prince Andrew. Mellor was a consultant to her firm, PCP Capital Partners, when it helped put together a £3.5billion investment from Abu Dhabi that was crucial in saving Barclays from meltdown in the 2008 credit crisis.
When he did not receive his fee as promptly as he would have liked, he fired off a volley of indignant emails until he was paid £500,000.
Of course, making enemies is often an inevitable part of any business or political career. And Mellor has certainly acquired his share.
It will be scant consolation to him, but Count Giovanni emo Capodilista is doubtless the latest in a long line of people hoping that David Mellor will get his comeuppance one day.