KEY POINTS:
A member of the Auckland Property Investors Association's board is calling for a vote of no confidence in the organisation's "autocratic" president, Sue Tierney, amid allegations it is on the brink of insolvency.
Board member Ron Hoy Fong says he has no confidence in Tierney's leadership and that the organisation's financial position is "dismal". He estimates the not-for-profit organisation is losing between $10,000 and $18,000 per month.
Hoy Fong is not alone in his concerns about the association's current management.
A former board member, Dianne McAteer, who resigned earlier this month, wrote to the other board members in January referring to "the financial issues at hand"; stating the board was "in serious trouble" and that "the membership would have a good case for a vote of no confidence".
Its former chief executive David Baty has just resigned as well, also claiming the association has hit financial dire straits.
Board secretary Tony Steindle, the association's honorary solicitor, confirms it is solvent. He responded on Tierney's behalf as she is currently overseas. Funds held by the APIA as at March 31 last year were $134,000, Steindle says, and at the end of this financial year the accounts are likely to show funds of $78,000.
Yet on March 31, 2007, funds held for the association were $262,000. The association's profit and loss statement to November last year shows a loss of more than $81,000.
Baty says association members are unaware how badly the organisation's financial status has deteriorated: "They're still accepting membership fees when in essence they're very close to insolvency."
Feedback indicates association members are dissatisfied with a lack of communication from the board, Baty says, and membership turnover is more than 30 per cent.
The board's minutes of June 23 last year show Tierney noted member feedback indicated "concern about the state of finances for APIA". On August 18 last year, board treasurer Ann Loudon was "very concerned at the loss of $38,000 for the year to date", but the minutes record that "It was agreed that we should not go to the members at this point."
In a discussion document appended to the minutes, under the heading "Finances", it was noted that "Financial sustainability is of critical concern. We are currently using capital reserves. Expenditure needs to be reviewed and limited."
McAteer noted that legal and accounting expenses were high early last year. These services are provided by the legal and accounting firms of which Steindle and Loudon respectively are principals.
Legal fees of $17,000 were charged by Steindle Williams, the firm in which Steindle is a partner, over a two-year period. Steindle says he and Loudon have both declared their interest to the board in terms of their firms being lawyers and accountants to APIA.
Steindle says the association's financial losses result from an expo it organised in November 2007 and the Christmas dinner function held that year, together with costs associated with the departure of a former chief executive, Ashley Church. Board meeting minutes from December 18, 2007 show the association lost $12,000 on the dinner. The total cost of the expo was more than $120,000 and the income was $90,250, with Tierney noting that she was "not expecting" this loss.
Baty asks: "How do you lose $12,000 on a Christmas function and $30,000 on an expo?"
Since then, Steindle says further losses have resulted from dropping membership. On November 3 last year, Loudon noted the projected loss for the year to date was exceeded by $30,000. But Steindle says the board has undertaken cost-cutting measures and negotiated new sponsorship agreements, and now "is in a sound position financially".
One board member, Simon Shreeve, is also a shareholder and director of XLR8 Events, which has owed the organisation $5625 since November 2007, and is now in liquidation. Steindle says the association is pursuing recovery of this amount with the liquidator and that Shreeve did not vote "on matters relating to this debt".
Hoy Fong says he has "brought up the issue of conflict of interest" recently. Five of the seven board members are actively employed serving the property investment industry and Baty says that on the board "they can control a database of business. You're talking a multi-million dollar industry within this captive market."
The organisation has churned through four chief executives in the past 18 months. The first, Ashley Church, resigned following the last board election when Tierney became president.
Dianne McAteer stepped in as acting chief executive until a permanent replacement could be found. Jane Bollard was then appointed to the role, followed by David Baty who quit after three months - as Bollard had.
Baty says he left because of undue interference with his role from the association president and other board members and says his predecessors left for the same reason. Steindle says Bollard told the board she chose to leave the role "as based on the strategic plan she had presented to the board she did not see that she wished to take on the role of its implementation".
Regarding Baty, Steindle says the board "had concerns as to prioritisation of work and his dealings with third parties".
But McAteer, who joined the board once she was no longer the acting chief executive, wrote to the other members in December last year saying: "We have failed to give clear direction to Jane [Bollard] and now David [Baty]. We are still confused between governance and management, and are doing neither well at a strategic level. There is a lack of commercial maturity being shown around personnel management."
In January, she wrote again to the board members saying: "I can't see a way forward with the current make-up of the board ... I have to say a whole new board might be the answer as this one appears to have too much history and bad blood to be able to move forward. The politics are ridiculous."
"If the current president resigns, I think the organisation can go forward," says Hoy Fong. "If it continues the way Sue has managed the [association], nothing will happen."
WHO'S WHO ON THE ASSOCIATION
The Auckland Property Investors Association (APIA) is an independent, non-profit organisation formed to provide professional development and networking opportunities for its members, who are property investors and other professionals involved in the property market.
The current board comprises:
Sue Tierney - association president and head of Ponsonby mortgage broking business Mortgages by Design.
David Whitburn - association vice president and head of property development company Fuzo.
Tony Steindle - association secretary and principle of Ponsonby property law firm Steindle Williams.
Ann Loudon - association treasurer and director of accountancy firm Streetsmart.
Simon Shreeve - director of a home staging, interior design and property makeover company.
The other two board members, Chris Marston and Ron Hoy Fong, are property investors who do not also run businesses directly serving the property industry.
Ructions behind closed doors
The association has been dogged by difficulties at the top since before August 2007 when they first spilled beyond the boardroom during electioneering for board appointments.
Andrew King was then president and Ashley Church chief executive. Only days before members were to elect a new president, Church said he would run for presidency.
Members then received two bizarre emails.
The first, sent on August 14, by Sue Tierney and supporter David Whitburn, referred to issues between board members and problems between the board and Church. "Both Ashley and another board member have strongly objected to Andrew King standing for the board, which has now resulted in Ashley standing ..."
The email denied King was the source of the issues, claiming debate related to "the extent to which the APIA is a profit-making venture".
Hours later, Church supporters - John May, Garth Melville and Annette Kann - emailed members, denying problems between Church
and the board over the association's commercial activities but acknowledged "deep-seated and fundamental problems within the organisation". They said debate related to King's attempted management interference, culminating in an attempted no confidence motion in his presidency.
On election night, Tierney was voted president and King was elected to the board. Church resigned days later.
