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Meeting brought Van Eyk concerns to a head

Being unable to gain control of Van Eyk was what pushed Australasian Wealth Investments (AWI) to decide the shareholding was no longer part of its long-term strategy, its chairman says.

Monday, September 29th 2014, 6:00AM

by Susan Edmunds

Van Eyk is in liquidation after striking trouble when four of its funds were invested in an illiquid asset and money could not be repaid on demand.

AWI told the ASX last month that with a 36.2% stake, it wanted out of Van Eyk. “Van Eyk Research is no longer a strategic asset — we are seeking to maximise value, by any means possible, from this investment".

In February, it had signalled that it wanted to take control on the company – despite the fact that Perpetual Trust, of which AWI chairman Andrew Barnes is also chair, had begun to pull money out, concerned at what was happening at Van Eyk.

Barnes said an EGM for AWI was called earlier this year, at which the matter came to a head. “At the EGM, we didn’t manage to get a representative on to the board… once we could not get control of the company, or a representative on to the board, we had significant risk and no control. If you have no control, you can’t do anything with it. If you can’t do anything with it, you have to decide at what point you’re going to continue to use it to fulfil a strategy and at what point it’s just an investment. In the absence of being able to take control, it’s just an investment and no longer strategic.”

The AWI decision had been made independently of Perpetual’s decision to pull back, Barnes said.  “They’re two different companies with two different approaches.”

The AWI EGM was very brief, Barnes said, and soon after it finished another batch of Van Eyk shares became available, which he said went into Van Eyk chairman and chief executive Mark Thomas’ control. “Where those shares are now is, I understand, a matter ASIC is looking at.”

ASIC is reported to have raided Van Eyk’s offices in Sydney as part of its investigation. FMA spokesman Andrew Park said: “The FMA is liaising with ASIC and making its own inquiries into the Van Eyk and Blueprint funds. We are particularly concerned about conduct issues in NZ and where these issues impact NZ investors.”

The illiquid asset that has caused Van Eyk’s trouble is believed to be a real estate development linked to the funds’ underlying manager, Artefact.

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