Loan will be repaid: SPI

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A $1.1 million related-party loan will be repaid and investors in the Gloucester property syndicate won't lose out, syndicate manager SPI Capital says.

Monday, August 27th 2012, 7:04AM 3 Comments

by Niko Kloeten

Last week Good Returns reported concerns by some investors about SPI's plan to wind up the syndicate after finalising an insurance pay-out of more than $40 million for its building in the Christchurch CBD, which will be demolished.

Accountants Cliff Jones, Robert Gale and Bill Cooney have sent a letter to investors urging them to vote against the proposal, which will be heard at a meeting this week.

SPI Capital director Murray Alcock has responded to their letter, which he described as "vitriolic" while calling Jones, Gale and Cooney a "clique."

He said SPI "strongly asserts" that it didn't breach its duty of trust by making the $1.1 million advance, and rejected their claim it would leave investors $5000 per unit out of pocket.

"The advance is due for repayment on the settlement of that asset and investors will receive the net proceeds from that repayment. There is no loss of $5000 per unit to investors," he said.

"Repayment of the loan advance has always been linked to an event - the sale of assets to realise the advance back to the syndicate. When the sale happens, the repayment will happen. There is no change and no broken promises."

He also said the accountants' claim of SPI charging for meeting costs at $36,846 was incorrect.

"The syndicate paid for the costs of the single extraordinary meeting ($13,500) at which the vote of confidence was asked for by the Manager and which was passed by a significant majority."

Alcock said resolutions "cannot be changed by individual members at their whim... no new resolutions or changes to the resolutions can be made before or during the meeting as this would disadvantage those not presented with the opportunity to vote or have their say."

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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