A director on team Lotus’ Formula One team is being sued for £100 million by a former business associate over the proceeds from a number of high-class property developments, reports the Evening Standard.

Andrew Ruhan, a well-known property tycoon who was appointed to Team Lotus F1’s board of directors last month, is being sued by notorious fraudster Gerald Smith over a deal the two made to buy 37 mostly Thistle-franchised hotels.

It has been claimed that Ruhan was involved in a verbal agreement to buy the properties, of which three – the Thistle Lancaster Gate, Thistle Kensington Park and Thistle Kensington Palace – border Hyde Park and had been marked out for conversion into flats, with the promise of “very significant profits”.

Smith was previously jailed himself, however, for 8 years in 2005 after defrauding £35 million from IT company Izoldia.

Funds which should have been forwarded to banking firms controlling pension funds disappeared from the Slough firm.

A qualified GP, Smith had a home in Jersey and another property overlooking the Wentworth gold course.

He also used proceeds from the fraud to pay for a £1.8 million deposit on a Yacht and spent £100,000 refurbishing his Jersey home.

Though he was released after serving four years in prison, Smith has been banned from being a company director for 15 years and has been ordered to repay £41 million pounds, money which the Serious Fraud Office has confirmed it is still pursuing.

The £100 million High Court action would help Smith pay off his outstanding debt, however.

A writ was issued to the High Court in the name of Orb ARL, a Jersey-based firm of which Dr Gail Cochrane – Smith’s wife – and her two daughters are the sole beneficiaries.

The document reads: “While the deal struck between the parties was later partially recorded and given effect by complex written commercial transactions, the key facet of their deal was agreed orally.

“The claimants would share in the net financial benefits realised from the development and disposal of the assets to be sold by (Orb) to Mr Ruhan. Yet despite now having made profits in excess of £250 million from the project … Mr Ruhan has failed to account to the claimants for their respective share.”

Ruhan, however, denies that a verbal contract for such a large amount was likely to have been made, and asserts that no such promise has been mentioned in any form of written communication.

Though he has yet to invest in the Lotus Formula 1 team, Ruhan joined the Oxfordshire-based outfit’s board of directors in March.

Finnish driver Kimi Raikkonen, who won this season’s opener in Australia, currently stands second in this year’s Drivers’ World Championship, whilst Lotus themselves lie third in the Constructors’ standings.

With regards to the court case, a spokesman for the tycoon said: “Mr Ruhan asserts the claims against him are spurious and entirely without merit. The legal action will be defended vigorously.”

If his case is successful, Orb has agreed that Smith will receive 50 per cent of whatever the court orders Ruhan to pay “up to the amount” that he owes under the confiscation order.