This article is from the Australian Property Journal archive
CROMWELL Property Group’s board has been spilled after taking a second strike against its remuneration report at yesterday’s annual general meeting, the latest flashpoint of a drawn-out tussle for control of the group.
Major shareholder, Singaporean investment house ARA Asset Management has been gradually upping its stake to nearly 30% while putting forward a proportional takeover bid, and in September had its nominees appointed to the board after multiple failed attempts.
Among those was Gary Weiss, who had come close twice before, while shareholders also voted prolific director and fellow ARA nominee, ABC board member Joe Gersh.
ARA and the Tang family, which owns 16.6% through Haiyi Holdings, were largely responsible for Weiss and Gersh being voted onto the board, and their combined vote was again instrumental in triggering a board spill yesterday. Cromwell must now hold a spill meeting within 90 days.
Cromwell’s shares went into a trading halt ahead of the meeting.
While the tensions between Cromwell and ARA began more than 18 months ago following Cromwell’s failed takeover bid for UK-listed RDI REIT, the spat has taken in accusations of conflicts of interest as the parties duked it out for Brisbane office buildings, Cromwell freezing ARA out of a $375 million capital raising, and accusations from ARA that Cromwell has a poor investment track record – in particular, its investment in a near $1 billion portfolio of “high risk Polish retail assets” that have taken a valuation hit.
Cromwell had previously suggested Weiss had taken on too many board appointments, including at Ardent Leisure and Estia, to be devoted enough to the group.
Cromwell reported a full year operating profit increase of 27.0% to $221.2 million, ahead of its own guidance, and a 13.3% increase in statutory profit to $181.1 million.
