British Land not told of Smyth plan

British Land did not know of an attempt by its partner Dunloe Ewart to use some of their Dublin properties to end a stand-off between Dunloe and its largest shareholder, Mr Liam Carroll.

Dunloe and British Land are 50:50 joint-venture partners in Cherrywood Properties Ltd, which is developing 420 acres in Cherrywood at Loughlinstown, south Dublin.

But British Land is understood to have had "no knowledge" of recent proposals contained in a letter by Dunloe's chairman, Mr Noel Smyth, to exchange some of these interests for Mr Carroll's stake. British Land made no comment when asked if it was happy with the development.

Despite owning more than 27 per cent of Dunloe, Mr Carroll has never engaged with the chairman of the property firm, Mr Noel Smyth, who with his wife owns some 22.47 per cent. Indeed, Mr Carroll has blocked a number of Mr Smyth's plans for the firm.

Mr Smyth recently complained to the Office of the Director of Corporate Enforcement about the conduct of Mr Carroll's own companies. The stand-off emerged two years ago between Mr Smyth and Mr Carroll, the owner of the biggest apartment business in Dublin, when Mr Carroll built his stake in Dunloe.

Mr Carroll is sitting on a significant loss after buying into the company at about 50 cents per share; Dunloe stock traded this week at 29 cents. His purchase of the shares was financed by Irish Nationwide Building Society.

Dunloe made a profit after tax of about €12.69 million on the sale to British Land of half its interest in the project. The consideration was €42.54 million, with €2.54 deferred. The balance was still outstanding at the end of last year, according to Dunloe's latest annual report, "but is contingent on the completion of certain infrastructure works".

Despite British Land not knowing about Mr Smyth's letter, a Dunloe spokesman said: "I think there is a close and continuing dialogue with British Land." Asked whether the Dunloe board had been informed of the letter, the spokesman said: "I think everything that has been done has been done with the full knowledge of the board. There are no secrets."

Mr Smyth made two proposals concerning the Cherrywood lands to Mr Carroll.

First, he mooted exchanging Dunloe's €20 million interest in a building leased by Friends First with €20.7 million cash balance in exchange for Mr Carroll's Dunloe shares. Second, he proposed transferring 60 acres of land at Cherrywood for €40.7 million, subject to the acquisition of rezoning.

According to the latest Dunloe annual report, office buildings at Cherrywood are also occupied by Dell and Lucent Technologies.

In addition to his Cherrywood proposals, Mr Smyth proposed to buy out Mr Carroll's interest for 38.5 cents per share, also valuing the stake at €40.7 million.

He also proposed transferring his own interest in Dunloe to Mr Carroll for 38.5 cents per share. This would have triggered the compulsory acquisition of all other Dunloe shares.

A further proposal was to transfer to Mr Carroll Dunloe's interest in a 4.1-acre site at Sir John Rogerson's Quay, Dublin, for €40.7 million. Dunloe has received planning permission to build 231 residential units with offices, retail, restaurant and leisure businesses on the site, which it acquired for €9.5 million in 1997 from Mr Smyth.

Mr Carroll's solicitor, Mr Gareth O'Reilly, said he had no instruction to comment.