INDEPENDENT NEWS

Waltus Appeals Securities Commission Ruling

Published: Sat 2 Sep 2000 05:45 PM
Media Statement
Waltus Property Finance Appeals Securities Commission Ruling
Puts Half Million In Trust As Investor ‘Guarantee’
Editors Note: Waltus Property Finance was established in November 1999 and is totally separate and independent from the better known company Waltus Investments Ltd.
Wellington, 1 September
Waltus Property Finance said today is had appealed a Securities Commission ruling to cancel the registration of its Prospectus.
“The Commission’s decision is based on a spurious interpretation of one word,“ said company Chairman John Hodge.
“We strongly disagree with this ruling and have received legal advice which supports our position.
“The Commission’s actions are unsubstantiated and, based on how they have handled such issues with other companies in the past, extremely heavy-handed.
“In our view this action raises some serious questions.”
 Why has the Commission waited nearly a year after the initial Prospectus was registered to raise these concerns?
 Why wasn’t Waltus given the opportunity to amend the Prospectus instead of unilaterally throwing it out?
 Why has the Commission waited to publicly announce its actions until the eve of a special meeting to approve one of New Zealand’s biggest property mergers involving a Waltus publicly owned company, a move that could unfairly prejudice this totally unrelated matter?
 Why was Waltus not given the opportunity to remedy any potential misunderstanding through a simple, direct communication with its investors, as might normally be expected? Something which Waltus has offered to do.
mtc
Waltus is so confident the Commission’s concerns are baseless and that investors have nothing to worry about they have set up a $500,000 trust fund, to be managed by an independent solicitor, to act as surety should any investor demonstrate a loss as a result of the Commission’s interpretation.
The dispute regards the interpretation of the words ‘Person or group of related persons’ as described in the Prospectus versus the definition of ‘Persons’ in the company’s Trust deed, and a perception of extra ‘risk’ associated with this.
“The Commission’s argument is a totally technical one and in the opinion of our Independent Director and our legal advisors, has no material significance to investors and does not threaten their investment in any way,” Mr Hodge said.
Waltus Property Finance, in its establishment phase, has made loans to other companies with which its Directors already have an association. This is inherent in the Trust Deed and Prospectus, but the Commission has challenged the wording used.
“There is nothing unusual or ‘risky’ with this approach as implied by the Commission. In fact, it is prudent for us to have a hands on involvement in the companies in which we invest so that we can actively manage the investment on behalf of our investors.
“We don’t just lend the money and then turn our backs and hope for the best, and no prudent investment company does.
“What’s important is that in every instance, Waltus Property Finance has invested in the opportunities available which have the greatest investment potential, and therefore the greatest potential return for our investors.
“Furthermore, every loan made is first approved by the Independent Director and legal counsel to ensure that it complies with the Trust Deed.”
The appeal will be heard in the High Court.
ENDS
For further information please contact: Robert Brewer, 021 505 044

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