Financial planning group Dixon Advisory has lambasted the board of listed investment company van Eyk Three Pillars (VTP) for not disclosing significant issues in an explanatory memorandum (EM) it sent to shareholders ahead of a meeting called to oust VTP's board.
In a letter mailed by Dixon to VTP's shareholders, Dixon executives Alan Dixon, Alex MacLachlan, Chris Brown and Chris Duffield said they had serious concerns about the ability of VTP's non-independent directors to act in the best interest of VTP shareholders.
VTP failed to inform shareholders about the interwoven relationships among its directors and 25-year investment management contracts given to research house van Eyk Research (VER) and VTP Management to manage VTP's portfolio, the letter said.
Non-independent directors, VER chief executive Mark Thomas and former Employers Mutual chief executive Cameron McCullagh, had shareholdings and directorships with VER, it said.
"We are not suggesting that the directors of VTP have engaged in any unlawful or improper conduct, but we are very concerned that these relationships are an obstacle to there being robust and truly independent debate around the VTP board table," Dixon's letter said.
VTP's 25-year investment management contracts with VER and VTP Management provided for excessive certainty of retention and compensation, it said.
VTP also had not disclosed to shareholders through an Australian Securities Exchange (ASX) announcement that VER founding director and former managing director Stephen van Eyk had resigned last month.
Van Eyk remained on the VER investment committee as a consultant to the company and a major shareholder, VTP told the ASX on 22 September.
Dixon's letter urged VTP shareholders to vote to dismiss all VTP board members at an extraordinary general meeting on 29 September and replace them with Dixon, MacLachlan, Brown and Duffield due to VTP's poor disclosure and stock performance.
"VTP's share price performance has been, in a word, terrible. VTP has underperformed the ASX 300 Accumulation Index by 42.8 per cent since inception," the letter said.
"The new board would seek to quickly restore full value to the shares and act in the interests of all shareholders."
Thomas told InvestorDaily: "Dixon's claim that VTP is an underperformer is rubbish and we disproved that in the analysis in our explanatory memorandum."
"Claims that the board of VTP would adopt a significant change in strategy [referring to the Term Asset-Backed Securities Loan Facility (TALF)] is completely untrue. As part of a conversation with Dixon we presented one of many ideas, including investing in TALF, as part of a normal discussion point."
In its EM dated 1 September, VTP said appointing the four "Dixon Advisory executives to control your company is not appropriate corporate governance nor in the interests of shareholders".
VTP recommended shareholders vote against each of the Dixon resolutions in the upcoming meeting, except for the resolution to approve a 25 per cent on-market buyback.
