SPI Capital survives vote

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Property syndicator SPI Capital has survived a vote by investors to oust it as manager of the Christchurch-based Gloucester Syndicate.

Wednesday, March 24th 2010, 5:48AM 2 Comments

by Jenha White

Investors were concerned about the management of the syndicate after SPI Capital borrowed $1.08 million against a property without the knowledge of investors to facilitate the establishment of another syndicate.

A special meeting was held on Friday with a number of motions including one to replace SPI as manager.

SPI Capital managing director Murray Alcock said, after the meeting, the loan was undertaken with the view that the loan was consistent with the ownership and management deed and for the interest of the investors.

However, investors were concerned that the deed had been breached by the loan after Brown Lawyers, acting for investors in the syndicate, found that to be the case.

In the meeting last Friday, investors did not meet the threshold in voting against the retention of the manager.

Investors needed a vote of more than 50% but with 48 investors that did not vote the investors only reached 39.5% of votes. Of those that actively voted 50.8% were against the retention of the manager.

Resolution two was a vote on changing the management agreement and ownership deed which required a vote of 75% but only reached 38% and the vote in favour of removal of the manager needed a 90% vote but only got a 41% vote.

This meant there were no changes made as a result of the meeting.

Alcock says SPI Capital is currently arranging repayment of the loan as part of its commitment to the syndicate.

An SPI spokesman says there is no fixed date for the repayment of the $1.08 million loan from AXA which has indicated that it does not intend to take any specific action in regard to the breach by SPI of the 55% loan to value ratio.

An investor of the Gloucester Syndicate who wants to remain anonymous says the mission from the outset was to bring to investor's attention to what had happened to their investment and to provide the information for investors to make an informed decision based on the facts.

"We are still very concerned with the situation but cannot do anymore than we have already done which was to provide investors with the opportunity to vote."

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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