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Canadian financier Paul Reichmann has been forced to sell his remaining stake in London's Canary Wharf development, British media reported Monday. ((Robin Nowacki/Associated Press))

British media reports say Canadian businessman Paul Reichmann has given up his stake in London's Canary Wharf development.

Property developer Songbird Estates PLC announced Monday that it has increased its stake in Canary Wharf Group to almost 70 per cent after acquiring a nearly nine per cent holding from German lender Commerzbank AZ, for the equivalent of $177 million.  

According to London's Daily Telegraph newspaper, which cited unnamed sources close to the matter, those shares belonged to Reichmann but had been used as collateral against loans to Dresdner, a Commerzbank subsidiary.

Dresdner was acquired by Commerzbank earlier this year.

Unclear why collateral being called in

It is not clear why the collateral is being called in, but it raises questions about the real estate tycoon's finances.

Reichmann holds about an eight per cent stake in Songbird, but that equity is likely to be diluted to almost zero after Songbird issues $1 billion in new equity. That's expected to happen later this week, the Telegraph reported.

Reichmann, 78, was the driving force behind the landmark development, a massive complex that covers more than 38 hectares, after brokering a deal with then-prime minister Margaret Thatcher in 1987. The deal would end a 22-year association with the luxury real estate development.

The massive scale of the development project in London's eastern docklands led his Toronto company, Olympia & York, then one of the biggest real estate developers in the world, into bankruptcy in 1992. Reichmann fought back, reacquiring Canary Wharf from banks in 1995.

In 2004, he lost control of Canary Wharf for the second time as the Songbird consortium acquired a controlling stake for nearly $3 billion. Reichmann maintained his small stake of 8.45 per cent of the Class B shares.

With files from The Canadian Press