CYRE Trilogy Group has called on ASIC to intervene in its battle with Queensland property group, Australian Property Growth Fund (APGF), over the sale of a property trust.
CYRE Trilogy directors Rodger Bacon and Peter Arnold have written to the corporate regulator urging for the deferral of a PFA Property Trust (PFA) unitholders meeting on 25 July.
“What we must do is have this meeting deferred and ASIC has the power to do that,” Bacon told InvestorDaily.
Bacon and Arnold said the deferral is critical as the 4900 unitholders of the $444 million trust need to be properly notified of the terms of APGF’s sale and allowed time to consider other options.
CYRE Trilogy believes investors should vote against the APGF proposal at the meeting because of the existence of an alternative deal which it believes better serves investors, namely a CYRE Trilogy deal.
“CYRE Trilogy has committed to giving 50 per cent of all sales and performance fees up to a maximum of $9.8 million back to unitholders in the PFA if it wrests control of the management rights of the trust from the Queensland-based property group APGF,” CYRE Trilogy said in a statement.
“APGF has proposed the sale of the management rights of PFA to Charter Hall for an upfront fee of $5 million payable to APGF.
“The only real beneficiary of this proposal is APGF, who will in an on-going role continue to influence management of the fund.”
Bacon said APGF was requested to provide a copy of the register of the PFA 13 weeks ago and so “is in blatant breach of the Corporations Act”, as the law required the register to be supplied within seven days.
Earlier this month, CYRE Trilogy Group called on financial planners to help stop the sale of PFA, which Bacon said garnered surprising results.
“We got a lot of phone calls . there was a big group,” he said.
Bacon and Arnold said PFA uniholders prompted CYRE Trilogy to approach APFG for the unitholder register, however as they have been “block” from contact they cannot detail their offer.
“You must have the register to speak to the unit holders about the offer. We can’t do it,” Bacon said.
“We had to resort to taking out an ad in the Couriermail [newspaper] to speak to advisers and investors to tell them we have a better deal.
“APGF is being paid to do this deal and they just pocket it and does not go to the investors.”
Asked what CYRE Trilogy will do if unitholders vote in favour of the APGF offer, Bacon hinted legal action may be a next possible step.
“It’s a lost opportunity. I’m sure ASIC will continue to look at that and it might be the case that the deal is not allowed to go through,” he said.
“So it would lie with ASIC and usually that means that it will end up in the court where ASIC will argue the case and the others will defend the positions as they can.
“[However] at the end of the day nobody likes to waste money and time on court cases.”
Last week, APGF managing director Geoff McMahon said its board did not believe providing the register to the “property fund predator” was in the best interests of PFA unitholders and it had been dealing with its constant interference.
“CYRE Trilogy has a history of opportunistically attacking unlisted property funds for their own benefit and destroying unitholder value in the process,” McMahon said.
“PFA is a financially stable and well-managed fund. We do not see the benefits to PFA unitholders of allowing CYRE Trilogy to become involved in PFA.”
PFA unitholders had already provided encouraging positive feedback on the proposal ahead of the unitholders’ meeting to vote on the proposal on 25 July, with about 98 per cent of unitholders who had voted to date being in favour of the proposal, he said.
The APGF board maintains its view to change the responsible entity of PFA to Charter Hall Direct Property Management, as it holds a track record of outperformance for its unitholders.
