Fund manager Pelorus Property Group (Pelorus) has accused Centro Properties Group (Centro) of intimidating investors, following a bid by Pelorus to wrest control of $37 million in assets from the beleaguered group.
In a letter sent to investors yesterday, Pelorus executive chairman Seph Glew and managing director Stuart Brown rejected Centro’s warning to investors that they would be forced to pay the costs of a meeting to elect Pelorus as the new manager of the Centro MCS 16 syndicate.
“This seems to be a blatant attempt to intimidate Centro MCS investors,” Glew and Brown said.
“Pelorus has undertaken that it will meet any costs that might otherwise be payable by members.”
New Zealand financial advice firm Money Managers, whose clients make up a significant proportion of the syndicate’s 163 retail investors, asked Pelorus to take over MCS 16, one of the debt-stricken group’s 30 unlisted property syndicates.
Investors put between $10,000 and $200,000 into the fund, which has a loan to valuation ratio of 54.6 per cent.
On January 23 Centro suspended the syndicate’s distributions and said it was sourcing debt facilities to fund the syndicate’s only asset, the Centro Toormina redevelopment.
Pelorus said if appointed as manager it would cut management fees by 10 per cent. It indicated its intention to target between nine and 11 more Centro syndicates.
Centro MSC syndicates manager Gerard Condon wrote to investors on February 21 rebutting Pelorus’s claims that Centro was charging new fees and would not honour the syndicate’s time frame.
“We believe these statements are incorrect and misleading,” Condon said.
He said any changes to fees have already been approved by unit-holders and the company would honour time frames.
Centro releases its delayed half-yearly results tomorrow.
Investors will vote on the Pelorus bid on March 31.
