Defaulting investors in agribusiness managed investment group Palandri are set to lose their units as the company commences proceedings against them.
Palandri chief executive Darrel Jarvis said in the first MIS scheme 98 per cent of investors had paid the full amount for their units, while 10 per cent in the America wine scheme were in default.
“We made a call to the investors in the schemes and not all fulfilled their obligations to us,” he said at the company’s annual general meeting (AGM) in Sydney on Friday.
“The total number defaulting is less than 100 clients out of total of about 3000 investors.”
The first scheme was investing in the Margaret River winery and Palandri brands. Investors were required to invest $11,000 up-front for each unit, with further payments totalling almost $9000. They also had to invest a further $2000 for 400 shares in the wine production company.
The America scheme required a $11,000 up-front payment and subsequent payment of $10,450 for wine units and shares in the company. The move was to enable Palandri to market its wine in the US.
Jarvis said discussions with the defaulting clients and their financial advisers had been running for months, but the company was forced to act.
“We have been trying to find ways to support these clients,” he said.
“Some clients have now found themselves in difficulties as the second and third payments became due and we offered various ways to help them.”
The units in both schemes attracted up-front tax deductions from the ATO. Both projects have Product Rulings issued by the ATO, but Jarvis said he did not know what will happen now with tax deductions.
“We have had no discussion with the ATO about the defaulting investors,” he said.
“It will be up to them to make arrangements with the Tax Office.”
The board of Palandri came under questioning from a previous director Rob Palandri over the capital adequacy of the company.
Palandri, who is now running Great Southern Plantations wine investment schemes, noted wine sales for the Margaret River producer were down 65 per cent in the US in 2003/4 and 50 per cent in the UK.
“The decline in sales in the US is substantial and with these statistics, how much capital will the company need to survive the next 18 months?” he asked at the AGM.
Palandri finance director Chris Brown declined to give a figure saying the company had now got over its difficulties with its bankers in February this year.
The wine producer is seen to be vulnerable to a take-over from other West Australian wine makers, with its share price at all-time lows on the London AIM market.
Apart from Rob Palandri, some directors of the listed wine maker Ferngrove Vineyards were also at the AGM and it and Great Southern are seen as potential predators of Palandri.
