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Viking principal Brent King has taken another swipe at fellow listed company Dorchester Pacific, in which Viking has a 7 per cent stake it is trying to quit.
The former Dorchester managing director told Viking shareholders at Friday's annual meeting Viking would take a $4.2 million loss on its Dorchester stake in the September quarter when it was marked down to its market price.
Its Dorchester shares were last valued at $2.29 each at March 31 but today at $1.05.
King, who quit Dorchester in February 2006, on Friday repeated comments he made in a Sunday Star-Times interview last Sunday that he had lost confidence in Dorchester and its management.
He strongly took issue with Dorchester's decision to reverse his policies of diversifying assets and risk and to focus on property, particularly its investment in St Laurence.
King said that during his last two years at Dorchester, he positioned it for the kind of downturn being experienced by finance firms. It had spread its lending book to disperse risk. "I have to say that the current policies being undertaken are reversing much of this strategy."
Mark Simpson, Dorchester's former chief financial officer, who quit with King, said shareholders had relied on Dorchester's forecasts that it would trade ahead of 2006 in 2007 when they exercised $5.4 million of warrants.
Instead, there had been a $7.47 million "unexplained" reduction in profitability, he said.
He questioned why loan fees were down 29 per cent, or $1.9 million; expenses were up 16 per cent, or $4.2 million; insurance marketing costs were up 21 per cent, or $500,000; and noted Dorchester's cash was down 47 per cent to $34.5 million with most of that spent on buying intangible assets.
He said the largest item affecting the 2007 result was a revaluation up of its Shortland St, Auckland, property by $3 million and this was not mentioned in any written statements from Dorchester.
In response Dorchester chairman Barry Graham said he found the comments to be contradictory, inaccurate and extraordinary.
"The board has accepted management proposals for the future direction of the company in a more challenging finance market and economic environment, and these have been endorsed by major shareholders,"he said.
"We note Viking's decision to sell down their holding of Dorchester and welcome this move."
Dorchester managing director Andrew Walker last month said the company was on track to deliver a net profit in excess of $6 million in the 2008 financial year.
- NZPA, staff reporters
