A Bermudian-based investment firm has accused Braemar Hotels and Resorts — a company in which it is a major shareholder — of “a brazen act of self-dealing”.

Al Shams Investments, which is owned by Syrian-American businessman Wafic Rida Said, sent a bluntly worded letter to the Braemar board after the hotels group made large payments to terminate a contract with Ashford, an advisory firm controlled by Braemar’s chairman, Monty Bennett.

In its letter to outside directors dated Monday, Al Shams accused Braemar of “a betrayal of shareholders” and threatened to take legal action against the firm.

Al Shams is Braemar’s largest shareholder. Its missive comes after Braemar announced last Friday that its board has approved a management spin-out and plans to become a self-managed real estate investment trust. It will also terminate an advisory agreement with Ashford.

Dallas-based Braemar said it will buy out its contract with Ashford using proceeds from recent asset sales and future disposals. Filings this month show that Braemar has agreed to sell three hotels, including The Ritz-Carlton Sarasota, for $437.5 million.

“Al Shams Investments Ltd warned you — repeatedly and unambiguously — not to act without shareholder consent,” Al Shams wrote in its letter.

“Instead, you have completed one of the most brazen acts of self-dealing we have ever witnessed in a public company.”

A Braemar spokesman said in an e-mail that its board has “implemented virtually every other aspect of Al Shams’ suggestions”, including refreshing the board and becoming a self-managed REIT.

It added that the advisory agreement with Ashford has been in place since Braemar’s initial public offering and that the company is selecting the new board members with an outside search firm, without involvement from Ashford or Mr Bennett.

“Al Shams’ sanctimonious attacks are nothing more than an attempt to mislead shareholders and hide its true intentions,” the spokesman said.

Braemar shares, which have fallen by about 30 per cent this year, were trading at $2.01 in New York yesterday afternoon. Al Shams holds roughly 9.5 per cent of the stock, data compiled by Bloomberg shows.

Mr Bennett did not immediately provide a comment and representatives for Ashford did not respond to a request for comment. A representative for Al Shams declined to comment.

Al Shams said it will “pursue every available legal remedy” against Braemar's directors, Mr Bennett and anyone involved in the transactions.

In its statement last Friday, Braemar said it had “worked tirelessly to exhaust all available options to maximise shareholder value”. It said that while a sale of company was explored, “there was superior value creation” in terminating the advisory agreement, spinning out management and remaining public.

Braemar also said that Mr Bennett and other board members, with the exception of chief executive Richard Stockton, will step down. It plans to nominate five new independent directors and implement governance reforms.

Al Shams wants Braemar to hold its annual shareholder meeting immediately and plans to start a proxy challenge by opposing company-selected candidates and nominating its own.

Syrian-born Mr Said is the founding benefactor of the Said Business School at University of Oxford in Britain.