Hyams threatens suit against MEPC (CORRECTED)

CORRECTION (PUBLISHED 4 JULY 1993) APPENDED TO THIS ARTICLE

HARRY HYAMS, the property dealer who developed London's Centre Point, is threatening to sue MEPC, one of Britain's largest property companies, for mistreatment of minority shareholders in Oldham Estates.

The court threat comes as MEPC attempts to shore up its balance sheet by tapping shareholders for pounds 222m through a one-for-five rights issue.

Mr Hyams has written to MEPC through City solicitors Farrer & Co, claiming that its managing director, James Tuckey, has exceeded his legal powers as a director of Oldham by managing the business in the interests of MEPC and to the detriment of minority shareholders in Oldham.

MEPC acquired control of Oldham in 1987 from the Co-operative Insurance Society in a deal that valued the company at nearly pounds 650m. Mr Hyams, who founded Oldham, claims to have had no advance warning of the deal and has been sniping at MEPC's management ever since.

Besides retaining a small shareholding in Oldham, he is one of MEPC's largest investors with around 6 per cent of the shares.

Mr Tuckey described the latest letter as part of a long-running feud. He said he rejected all the allegations, which were 'wholly irrelevant within the context of MEPC'.

'This really is a bit of a storm in a teacup since minority shareholders account for little more than 0.1 per cent of Oldham's shares,' he said.

Minority shareholders are concerned that pounds 124.3m has been lent by Oldham to the MEPC parent company without any form of security. According to minority shareholders, this is in breach of Oldham's articles of association.

Immediate and adequate security should be given to Oldham, the letter says, and there should be a speedy repayment of the amounts outstanding.

Mr Hyams, who now lives abroad, was one of Britain's most controversial property developers. His crowning achievement, Centre Point on London's Tottenham Court Road, was left largely empty for more than 10 years so that he could take advantage of a period of rapidly rising rents to mark up its capital value.

Mr Hyams is threatening to petition the courts over Oldham under section 459 of the Companies Act, which allows shareholders to seek remedies for alleged unfair and prejudicial conduct. He could not be contacted to comment on whether he plans to subscribe to the MEPC rights issue.

CORRECTION

IN AN article in the Independent on Sunday on June 20 headlined 'Hyams threatens suit against MEPC' there were serious inaccuracies.

We referred to the pounds 124.3m lent by Oldham Estate Company to MEPC, but this was in fact repaid shortly before our article was published following complaints from solicitors representing Oldham minority shareholders (who included Mr Hyams) and immediately before MEPC's rights issue announcement. Accordingly, we regret the suggestion that the minority shareholders' complaints were 'a storm in a teacup' and accept that Mr Hyams and the other minority shareholders were acting entirely properly in making their complaint.

We also stated that Mr Hyams 'lives abroad'. In fact he lives in the UK.

Any suggestion that Mr Hyams deliberately kept Centre Point empty for many years to take advantage of rapidly rising rents is incorrect. In March 1974, a planning inspector found there was no evidence that Oldham deliberately kept this building empty for financial gain.

We apologise to Mr Hyams and are paying his legal costs.