The board of Marylebone Warwick Balfour (MWB) has refuted allegations that the proposed sale and leaseback of its Malmaison and Hotel du Vin chains to Vector would lead to a conflict of interests.

The accusation was made by MWB’s largest shareholder, US-based Mercury Real Estate, in an open letter on the company website.

According to the letter, MWB’s chief executive, Richerd Balfour-Lynn, should either be dismissed instantly or the hotels sold to another party.

It alleged that Balfour-Lynn’s position as director of Vector and chief executive of MWB would mean that the proposed deal between the two would be ‘fraught with conflicts of interest’.

The board of MWB denied the accusations and responded by saying that it will vigorously continue to pursue the sale of the Malmaison hotels.

In a statement, Eric Sanderson, chair, said: “The proposed sale of the Malmaison and Hotel du Vin Property portfolio to Vector Hospitality was overseen by a committee of the board, all of whom were neither involved financially nor in any other way with Vector.

“Also, Richard Balfour-Lynn is the second largest shareholder in MWB, so there is no question that maximisation of MWB’s value has always been and continues to remain of paramount importance to both him and the board.”

Vector is due to complete the £495.1m deal by the end of June.

The portfolio comprises nine Malmaison hotels – acquired by MWB in 2000 – and eight Hotel du Vin hotels – acquired in 2004 – located in 15 locations across the UK.

According to the proposed deal, MWB will continue to operate the entire portfolio pursuant to OpCo leases, and will be able to acquire further hotel sites for development and sale.