A contest of wills has developed over the future of the Investa Office Fund (IOF) between Cromwell Property Group and Investa Listed Funds Management.
Cromwell last Friday made public the degree of disagreement between the parties when it announced to the Australian Securities Exchange (ASX) that, as the largest unit-holder in the Investa Office Fund, it was calling on Investa Listed Funds Management Limited (ILFML) to withdraw the proposed partial internalisation of the IOF management platform and to cancel the planned unit-holder meeting.
The Cromwell announcement to the ASX said it had made the call following a second major international proxy adviser recommending a vote against the related party proposal.
“We welcome the CGI Glass Lewis and ISS recommendations that unitholders vote against the proposal,” Cromwell chief executive, Paul Weightman said in the ASX announcement. “This is a proposal that lowers the bar in regard to corporate governance. It destroys value for mum and dad unit-holders to whom ILFML owes a fiduciary duty and is a ‘worst of all worlds’ scenario.”
Cromwell announced earlier last week that it would be voting against the related party proposal because it would result in IOF “acquiring future uncertainty, embeds questionable governance practices, and reduces investor value both now and in the context of any potential future third party acquisition opportunity”.
“I find it extraordinary that major institutional funds, who publicly commit to maintain the highest standards of corporate governance and ethical behaviour, are promoting a transaction that two major international proxy advisers have recommended against and which an independent expert was not asked whether it was in the best interests of unit-holders,” Weightman said in the ASX announcement.
“If the promoter, ILFML, had the courage of its convictions it would have allowed the independent expert to offer an opinion on whether this proposal is in unit-holders’ best interests. In my opinion, the reason they did not is obvious.”
“As the CEO of the largest unit-holder in IOF I call upon ILFML to do the right thing by all unit-holders and withdraw their proposal, and not spend a further cent of unit-holders’ funds pursuing it,” Weightman said.
