Change on way for Kiwi

The manager of New Zealand's largest developer and landlord will have to take more account of investors' views if a series of proposals being put to a special meeting tomorrow succeed.

The Auckland meeting is the result of an investor revolt against management of the $1 billion-plus Kiwi Income Property Trust. About 22 per cent of investors agitated for the meeting, which will be chaired by Australian Sean Wareing, despite calls for him to step aside for an independent chairman. Wareing is chairman of Kiwi's manager.

Kiwi's manager is owned by Australia's Commonwealth Bank, which also owns Colonial Mutual Life Assurance Society, being investigated by the Securities Commission for potential insider trading.

A band of six institutional investors led by Brook Asset Management are behind the push for big changes at Kiwi which could, in turn, lead to a corporate governance overhaul of the listed property sector. The changes proposed would align the rules governing New Zealand's largest trust with those of the Companies Act 1993.

"The motions address the critical absence of a number of democratic rights which are enjoyed by investors in companies," Kiwi's meeting notice said.

If the motions succeed, the trust will have to take more account of unitholder's views and accept calls from fewer investors for special meetings.

Discussions at tomorrow's meeting will also include Kiwi's controversial Sylvia Park development at Mt Wellington, which sparked an extraordinary meeting in January to alter the trust's debt limits.

Kiwi failed to find a joint-venture partner for the $538 million project, despite indicating previously that the project would not be on the trust's balance sheet, that funding was beyond the trust's capacity and that Colonial would financially assist.

Simon Botherway, of Brook, said Kiwi did not have a mandate to undertake a development such as Sylvia Park.

He said Kiwi should have gone back to investors to get the go-ahead for investing in a project that was adversely impacting distributions, rather than enhancing them, as claimed at the special January meeting.

* Kiwi unitholder meeting, 11am tomorrow, Ellerslie Event Centre, Ascot Ave, Greenlane.

THE PROPOSALS

* The manager be required to hold a general meeting, rather than it being an option.

* That unitholders' motions be put to meetings as a matter of right, rather than at the manager's decision.

* The number of unitholders needed to call for a meeting be lowered from 10 per cent to a 5 per cent threshold.