Radius investors have received two alarming letters in the last few days, one from Radius titled “Radius Properties Limited – External Interference” and one from David Glenn titled “I Believe Your Investment in Radius Properties Limited is AT RISK.”

In short, David Glenn is concerned that the current managers and directors of Radius Properties Ltd are exhibiting a continuing pattern of poor judgement, seriously prejudicing your investment in Radius.

Radius investors Delwyn & Colin Trigg have made a shareholder proposal which, after much subterfuge and obfuscation by Radius, will be voted on at the short-notice AGM on Monday 28 September 2009.

VoV has investigated the allegations very carefully and will outline in this article the background to the allegations and why VoV will be voting in favour of Delwyn & Colin Trigg’s proposal…

Shareholder proposal blocked
HGM Services Ltd, a shareholder in Radius, submitted a written Shareholder Proposal to Radius on 14 August 2009. The directors of Radius are required to circulate this proposal to shareholders prior to the AGM, but have refused to do so.

Second shareholder proposal blocked
Delwyn & Colin Trigg, shareholders in Radius, submitted a written Shareholder Proposal to Radius on 9 September 2009. Nine days later the AGM parcel arrived in shareholders’ letterboxes without the proposal. Only after correspondence from the Triggs, David Glenn and lawyers did Radius reluctantly circulate the proposal. However, they managed to delay it so long that there was insufficient time for proxies in support of the change to be received at Radius by the deadline.

Companies Act and Radius constitution breached
The failure to circulate legitimate shareholder proposals to shareholders to consider prior to the AGM and vote on at the AGM constitutes a breach of both the Companies Act 1993 and the Radius constitution.

Annual report delayed
An annual report is required to be completed within five months of balance date. In Radius’ case that means by 31 August. Inexplicably, Radius was unable to fulfil this requirement, and resorted to dubious tactics to obfuscate this fact.

On 4 September 2009 Radius managing director Chris Holmes wrote to shareholders stating that “the annual report is now available for shareholders to review.”

Upon receiving that letter and contacting Radius’ auditor, PricewaterhouseCoopers, it became apparent the annual report was NOT in fact available. It was not completed until at least 11 September, the date of the PWC audit report, which was a whole week AFTER the letter was sent by Radius.

But even then, many shareholders were not able to obtain a copy for at least another week AFTER that because it was not made available on Radius’ website. Curiously, a notice on the website now states, “Shareholders may have had difficultly in downloading the March 2009 Annual Report. This issue has been rectified and the document is now available.” Yeah right. The “issue” was that Radius had not made it available on the website!

Short-notice AGM
Radius sent an undated notice of its AGM which is to be held on 28 September. The timeframe specified in the notice fails to provide the minimum 20 working days’ notice from the date the annual report became available, as required under the Companies Act 1993 and Radius’ own constitution.

As a result, we shareholders have little time to review and analyse the report prior to the meeting, let alone organise proxies or plan to attend. To quote from David Glenn’s letter, “it is outrageous to deny RPL shareholders access to information about a company that they own!”

Pattern of poor commercial judgement
As documented in yesterday’s article, there is a pattern of poor commercial judgement at Radius. The company has taken on debt to move into speculative property development, but Radius has no track record in this area.

What’s worse, they’ve done this with insufficient capital which has resulted in a series of ill-conceived investments that have in some cases failed and been sold at a loss. The Wanaka purchase will likely join that list of failed speculative property developments.

Tony Hannon’s deceptive CV
A UK survey suggests that one in four employers has withdrawn a job offer because they found the applicant lied on their application or CV. It seems Tony Hannon has no qualms about deleting unsavoury job information from his CV, which was circulated to shareholders a few days ago with a letter encouraging us to vote against the Trigg’s proposal.

He conveniently omitted his previous directorship of Northplan, the history of which we all know. He also omitted other boards he served on with his Ferrari-driving fellow director Kelvin Syms. He also omitted a number of failed companies he directed, as detailed below.

Ascot Private Equity – 90% loss
Tony Hannon, chairman of Radius Properties, was previously a director of Ascot Private Equity Ltd. This was a fund worth in the region of $40 million, which under Hannon’s directorship destroyed 90 per cent of investor wealth and is now only worth about $4 million.

In an interesting twist, this fund is now managed by David Glenn, who specialises in turning around distressed funds.

Has David Glenn’s intimate knowledge of the poor decisions and dubious practices that led to the destruction of approximately $36 million of investors’ wealth got Tony Hannon worried and determined to keep him away from Radius at all costs?

Kuwaiti Fund – US$100 million decimated
Tony Hannon was previously a director of investment company Intellectual Capital Partners Ltd (ICAP), which created an Islamic private equity fund worth US$100 million with Kuwait Finance House (one of the world’s largest Islamic banking groups, with total assets of over US$9 billion).

The fund was registered in Bahrain and regulated by the Bahrain Monetary Agency, which was investing in New Zealand and Australia.

A large proportion of the US$100 million fund has now been lost, and it is understood the Kuwaitis and Bahraini involved now have a poor view of New Zealand as an investment destination, and of the ethics of New Zealanders.

IMP Diversified Income Fund – moratorium
Tony Hannon resigned as a director of IMP Diversified Income Fund Ltd when it entered into a moratorium agreement in June 2008 owing investors $16.5 million. Investors are still owed 60 cents in the dollar and have been told not to expect full repayment.

Company accounts show the fund made a loss of $2.3 million for the year to June 2009 and a loss of $10.6 million in 2008. The most recent accounts show a position of negative equity which has triggered a revaluation of the capital equity stock to 1 cent.

IMP’s manager was I-CAP Partners Ltd, a director of which was none other than Tony Hannon.

VoV is sure there is more but this list and the Radius skulduggery will be sufficient for you to form an opinion on whether you want Tony Hannon and Chris Holmes controlling the company you are invested in (with no escape).

VoV will be attending the meeting on Monday and voting in favour of the Trigg’s proposal. As it is too late for you to submit a proxy, you are encouraged to do the same.

Radius AGM
Where: Gilbert Room, Kingsgate Hotel, 92-102 Gladstone Rd, Parnell, Auckland.
When: Monday 28 September at 3:30 pm

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Tags: Ascot Private Equity Ltd, Chris Holmes, David Glenn, I-CAP Partners Ltd, ICAP, IMP Diversified Income Fund Ltd, Intellectual Capital Partners Ltd, Kelvin Syms, Northplan, Radius Properties Ltd, RPL, Tony Hannon, Vestar

This entry was posted on Friday 25th September 2009 and is filed under Radius Properties. Both comments and pings are currently closed.