Century Funds Management will investigate Opus Capital’s related-party dealings should it be picked to manage the Opus 21 fund at an upcoming unit holders’ meeting.
“As manager of Opus 21, Century will promptly and vigorously pursue Opus Capital Limited and its directors in relation to the related-party dealings and if the transactions were inappropriate, seek compensation for you,” Century parent Over Fifty Group managing director John McBain told financial planners in a letter.
Century said original unit holders had lost 74 per cent of their investment in Opus 21 under Opus’s management.
“Opus blames the global financial crisis for investor losses, but this ignores Opus’ own actions and related-party dealings,” McBain said.
“Opus lent $17.3 million from Opus 21 to Opus G1, another Opus fund, without your consent and has now advised that Opus 21 has already lost 90 per cent of this investment and a loss of the whole $17.3 million seems likely – a loss to Opus 21 investors of 8.1 cents per unit.
“Opus 21 bought two properties, which were leased to Tretecnic, a company related to two Opus directors, without obtaining independent valuations. Tretecnic went into liquidation, resulting in a $17.8 million loss for Opus 21 investors – a loss to investors of an additional 8.4 cents per unit.”
He said Opus 21 also made a rights issue in late 2009 at 35 cents per unit when it was stated net tangible assets (NTA) stood at 81 cents per unit, but within months of the closing of the rights issue, Opus announced that Opus 21’s NTA per unit was only 26 cents.
“Surely the directors of Opus should have disclosed more about the risks of the G1 loan and the Tretecnic liquidation,” he said.
Opus 21 investors have already called a meeting to be held in Brisbane next Monday to consider changing the management of the fund from Opus to Century.
Century said should it become the manager of Opus 21 it would take actions including raising money to reduce the fund’s loan with Suncorp, reducing management fees and administration costs, and looking to distribute 100 per cent of the income the fund generated.
Opus 21 holds about $240 million worth of commercial property in Queensland and Victoria.
Opus Capital did not respond to InvestorDaily‘s request for comment by deadline.
