Call for DNZ heads to roll over planned revamp

Three independent directors of the DNZ Property Fund are being called on to resign.

MMG Advisory Partners is trying to rally thousands of DNZ shareholders to remove directors Simon Botherway, John Harvey and Mark Hopkinson.

Derek Young, MMG's chief executive, opposes DNZ's $130 million capital raising which he said heavily favoured the management company owned by DNZ chief executive Paul Duffy and ex-chairman Alastair Hasell.

Young wants himself and associate David van Schaardenburg to replace Hopkinson and Harvey.

He says Botherway's replacement would be made by a revamped board.

But Botherway says he only went on the board at the behest of institutional investor ING (NZ) and float underwriters Goldman Sachs JBWere.

He says he is there to oversee big changes to improve DNZ, internalise its management and manage a big capital restructuring to slice debt.

The business will be improved by the changes, he says, because existing shareholders had been put in an invidious position by the old structure.

DNZ's own rules ban the directorship change mooted by Young, who has written to investors calling on them to demand a new set of rules to give them a say. Class-B shares, owned by Duffy and Hasell, outvote Class-A shares owned by thousands of investors.

Young said this had to change.

"We have been advocating for some time that existing DNZ shareholders should have the opportunity to have their say about the future of their investment. A recent example of this was at the DNZ annual general meeting when DNZ Management [class B shareholders] used their power of veto to defeat a resolution that would have required any capital raising initiative to come back to you as shareholders.

"MMG believes that DNZ is your company and that you should be able to have your say on any capital raising to ensure that as a shareholder, your interests are represented. One of the key objectives of these new directors would be to have the proposed capital raising revisited," Young wrote.

DNZ investors who have voiced opposition to big changes include Derek Button, Ian Sinclair and Warwick Jenness.

They have contacted the Herald, concerned about suffering financially in the deal which van Schaardenburg predicted would create a 40 per cent value loss for existing shareholders.

Jenness said he was helpless to quit DNZ because shares trading on Unlisted were suspended weeks ago. He described the changes as despicable.