Angry Ascot letter slams rival's actions

Ascot's Sandy Maier. Photo / Simon Baker

Unitholders told they have been denied rights over Vital Healthcare resolutions

Lawyers for the manager of NZX-listed $517 million landlord Vital Healthcare Property Trust told opponents that directors feared Securities Act breaches if they buckled to calls rallying investors.

Paul Oldfield and Kate Helem of Harmos Horton Lusk in the Vero Centre wrote to outspoken critics Ascot Property Management, rejecting calls for resolutions to be put to the trust's annual meeting on December 6.

Ascot has criticised a now-ditched $14 million payout once proposed to ANZ's OnePath for Vital's management. Ascot also wanted to be appointed to run the trust short term, while making arrangements to internalise management and it wanted investors to vote on its proposals.

But lawyers said that could breach the Securities Act and last week Vital sent out its notice of meeting saying Ascot's proposals could be illegal.

Ascot has responded, sending a seething letter to unitholders saying they have been denied their rights.

Ascot's Sandy Maier, David Glenn and Craig Priscott accused ANZ's OnePath of silencing opposition at next month's meeting.

"OnePath is not putting the Ascot proposal to investors at the forthcoming meeting. We believe this is a real slap in the face for those nearly 20 per cent of unitholders who signed the Ascot proposal in the first instance. We believe these unitholders should make their feelings clear at the upcoming meeting," the Ascot executives said.

"Since the time that Ascot submitted its proposal, the independent directors of Vital have sought to undermine it. The hostility culminated in their lawyers sending Ascot a letter alleging that for technical legal reasons they were unable to submit the Ascot Proposal to the meeting of unitholders without an exemption from the Financial Markets Authority. OnePath's view was that they were under no obligation to seek an exemption and that the trust should not have to bear the cost of applying for one. In our opinion, the refusal of OnePath to obtain an exemption - assuming one is even necessary - is prejudicial to the rights of the unitholders that signed our proposal and is in direct conflict with its own duties as the manager of the trust," Ascot told unitholders.

"Ascot entered this process because we believed that the original $14 million price to be paid to the manager was far too high. This position was vindicated when even the independent directors withdrew their support under heavy investor criticism. We didn't believe the internalisation was worthwhile at the $14 million price and we still don't. In that sense this process has been at least partially successful."

In July, OnePath director John Body said Ascot was acting in its own self-interest and Body defended Vital and Argosy Property Trust, also run by the same manager. It was disingenuous of Ascot, which manages nine healthcare properties, to claim it was working in the interests of Vital unitholders, Body said.

* Vital Healthcare Property Trust annual meeting, 2pm December 6, South Stand, Eden Park, Auckland.