Estate Mortgage Faces Cac Inquiry
Sydney Morning Herald
Wednesday May 16, 1990
The Victorian Corporate Affairs Commission has started a private hearing into "certain activities" of Estate Mortgage Managers and associated companies.
A senior CAC officer said yesterday the in-camera hearing, at which witnesses can be compelled to give evidence, began on Monday. It has now been adjourned while the CAC gathers further information.
The officer said the hearing had been convened to expedite investigations into the group's management after the CAC decided there might have been a contravention of the Securities Industry Code.
Estate Mortgage Managers director Mr Richard Fisk said yesterday that the investigations were expected "in the light of the moratorium being called".
Meanwhile, Estate Mortgage group unit holders in five of the trusts who have put in redemption applications since March 31 will not receive any income apart form the March quarter distribution, according to legal advice obtained by the trustee.
This conflicts with advice issued two weeks ago by the trusts' manager, whose legal advice was that entitlement to income stopped as soon as the manager received the buyback request. It also implied that anyone who had requested a buyback would not have voting rights.
The Estate manager offered to restore income and voting rights to any investor who withdrew a buyback request.
However, Burns Philp Trustee general manager Mr Bob Young said yesterday the trust deeds had made no provision for the withdrawal of buyback requests.
"A unit holder is probably not entitled to withdraw his request and any purported withdrawal is likely to be ineffectual," Mr Young said.
Unit holders in the Income Trust Number One will continue to receive income until their buyback request is paid out. However, unit holders in the other five trusts are not entitled to any income between the period their buyback request was received and the eventual payout of their money.
This will leave many unit holders who have put in redemption requests both without their money during the moratorium period on buybacks, and without an income stream.
In acknowledgement of the Burns Philp statement, the Estate Mortgage manager said yesterday that with NCSC approval, unit holders could vote on changes to the trust deed at the meeting which must be held by July 3.
© 1990 Sydney Morning Herald
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