Property group Dunloe Ewart has discovered that developer, Mr Liam Carroll, holds a larger stake in the company than had previously been thought.

Dunloe announced yesterday that Mr Carroll holds 28.5 per cent of the company, up from the 27.5 per cent he was earlier believed to own. At yesterday's closing price, Mr Carroll's stake is worth slightly more than €34 million.

The additional shares came to light as a result of correspondence between the reclusive Mr Carroll and a committee established by Dunloe specifically to form "a channel of communication" between the company and its largest shareholder.

It has emerged that Mr Carroll holds almost four million shares above those already notified to Dunloe. Of this additional holding, 3.9 million shares were purchased in January 2000, and 70,000 in December last year.

These shares are currently held by Mr Carroll through a company called Kerbing, but were previously held on his behalf by Anglo Irish Bank in the Isle of Man.

Mr Carroll was disenfranchised in respect of his entire shareholding last week, in line with section 79 of the Companies Act 1990. This provision allows for a shareholder to be stripped of voting and other rights where they have failed to fulfil notification obligations in respect of their holding.

It is understood Mr Carroll will be forced to go to the High Court if he wants to win back the rights associated with his shareholding. As things stand, the legislation dictates that "no right or interest of any kind whatsoever in respect of any shares in the company held by him are enforceable by him, whether directly or indirectly, by action or legal proceeding".

The current stand-off has its roots in a notification made by Mr Carroll in July, when his solicitors informed Dunloe that 750,000 shares in the company had been transferred into the names of Mr Carroll and his wife. The holding, which had legally commenced in late 1999, had not previously been notified to Dunloe.

It is as yet unclear whether Mr Carroll intends to approach the High Court in respect of the matter. If he did decide to proceed along such lines, it would be likely that the High Court would seek proof that the failure to notify had been inadvertent before rights could be restored.

Depending on how the legislation is interpreted, it is thought that it could also be possible for Mr Carroll to sell his stake to another party, who could then notify Dunloe of the purchase and thus, in theory, remedy the overall problem.