Advisor Seeks Report On Aust-wide
The Age
Sunday May 24, 1992
Another financial advisory group has entered the battle for the $133 million Aust-Wide Flexi Property fund, requesting that the trustee commission an independent expert's report on the manager's past conduct.
The Melbourne-based Advisor Group wrote on Friday to the fund's trustee, Permanent Trustee Australia, warning that the recent spate of public allegations about the fund had exacerbated the despair investors felt about the fund's performance.
As a gesture of good faith, the group asked that an independent report be commissioned to look into the conduct of the guardians of the fund, with broad terms of reference drafted by representatives of the managed funds industry.
Advisor said it had put many clients into Aust-Wide and warned that failure to commission an independent report could have ``serious consequences" not just for the fund and unit-holders but also for Permanent Trustee itself.
The general manager of Aust-Wide Management, Mr Graham Jones, said an independent report was unnecessary and he would oppose the proposal.
He said the Australian Securities Commission had conducted an audit of the Flexi fund at the start of the year and had raised only minor concerns that amounted to ``petty cash".
He said the trustee had already commissioned independent reports from the accounting firms Duesbury's and Ernst and Young on a set of proposals Aust-Wide had developed for restructuring the fund. They would be sent to unit-holders in the next fortnight ahead of a meeting next month.
ASC guidelines for property trusts also require that the meeting of unit-holders vote on a motion to reappoint the trust manager, but Mr Jones said this did not require an independent report.
He said he agreed with Advisor that allegations about past investment decisions were confusing investors but he said they had been ``cooked up" by a rival manager, Global Funds Management.
He said the Aust-Wide Unit-holders Action Group, which was trying to replace Aust-Wide, was backed by Global and did not represent unit-holders.
In the last two weeks, two financial adviser groups, FPI and Count Financial Group, have come out in favor of ousting Aust-Wide as managers of the Flexi fund.
Allegations against Aust-Wide have centred on the fund's appalling investment performance _ the value of ordinary units has fallen by 59 per cent in the past year _ and on a series of deals between Aust-Wide Management and the developer of an office tower at 1 O'Connell Street in Sydney, which lost $85 million of investors' money.
© 1992 The Age