Richard Balfour-Lynn, former chief executive of MWB Group Holdings, has reacted strongly to yesterday's allegation from one of the company's major shareholders that the recent collapse of the business into administration was due to "poor corporate governance".
Deloitte was appointed as the administrator of MWB - triggered by the suspension of the company's shares resulting from unpaid inter-company loans between MWB and its subsidiary, MWB Business Exchange - on 16 November. Pyrrho said that the cash flows between the two parts of the business did not make commercial sense and were not in the interests of Business Exchange or its minority shareholders.
It went on to say that since MWB's share placing in January 2010, Pyrrho "has repeatedly questioned the actions of the directors of MWB and corporate actions taken by the company" and believes "the poor corporate governance, the conflict of interest and serious strategic errors of the board of MWB since the January 2010 placing" led to the eventual administration.
Balfour-Lynn, who resigned as chief executive of MWB in March 2012, said: "I note Pyrrho's latest public salvo in its campaign against the former MWB board. The matters have been raised before, albeit misguidedly, and the board has responded accordingly each time. Suffice to say that, as Pyrrho well knows, all decisions during my time at the helm were taken by the full board, subject to a unanimous vote, with the benefit of independent external advice and in the interests of all shareholders equally."
The day-to-day operation of Malmaison and Hotel du Vin is not affected by the administration of MWB. Chief executive Gary Davis has said that it is business as usual for the two brands, whose sales and profits were ahead 14% over the last four-month period on a like-for-like basis.
By Janet Harmer
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