Minority Shareholders Meet to Discuss Du Val Property Group’s Future Amid Statutory Management

The minority shareholders of the Du Val Property Group convened in Hamilton yesterday to address the recent developments that have seen the company, alongside 67 affiliated entities, placed into statutory management by the Financial Markets Authority (FMA). In response to these actions, the shareholders have formed a dedicated committee, which has successfully petitioned the courts and the FMA to recognize them as an interested party, represented by legal counsel.

With this recognition secured, the shareholder committee has now taken further steps, formally requesting a meeting with Minister Andrew Bayly to discuss the Du Val Property Group, which is solvent based on the information from the company accountant, and advocate for the removal of the company from statutory management. The shareholders are urging for control of the company to be returned to them so that they can elect a new board of directors and CEO. Their primary goal is to resume trading, complete the company’s ongoing development projects, and thereby repay funders, investors, and shareholders.

In a letter dated 3rd September 2024, Karl Lindeman, on behalf of the majority of the minority shareholders, outlined their concerns to Minister Bayly regarding the statutory management of Du Val Property Group.

The key points included:

• The appointment of interim receivers and a statutory manager was made based on incomplete and unverified information, including unsubstantiated assertions about the company’s solvency.

• The shareholders have received little communication from PwC and the FMA regarding the reasons for statutory management, with the first substantial information only arriving recently, the publicly available PWC report.

• The shareholders were never consulted or asked for the financial data of DVPG’s development projects, which is critical given that Du Val Property Group is a large-scale property developer managing six major developments.

• The PwC report failed to account for the financials of these developments, and the company accountant confirmed that DVPG had $5.1 million in its accounts as of 1st August 2024.

• The international financiers backing DVPG’s projects continue to pay sub-contractors directly, demonstrating confidence in the company’s solvency and ongoing operations.

Concerns were raised by shareholders about the high costs associated with statutory management, which lacks transparency as there are no requirements for statutory managers to provide reports. Shareholders described the process as “very secret squirrel,” with little visibility into the activities of the statutory managers. This is especially concerning given that PwC, which previously served as interim receivers, has now been appointed as the statutory managers, raising potential conflicts of interest and, more critically, concerns of self-interest on the part of John Fisk and his team.

Further adding to the shareholders’ unease was the recent PWC tax scandal in Australia, brought to the attention of the group by a member this week. The shareholders see this, along with the lack of transparency from the FMA and the courts, as highly alarming. They are worried that the statutory managers’ fees are draining any potential trading cash flow, effectively eroding any chance of financial recovery for the projects, developments, funders, investors, and ultimately, the shareholders.

"Karl Lindeman, spoke from the heart expressing complete shock over the lack of engagement from John Fisk at PWC, as despite being contacted in writing several times by the shareholders committee, not even an acknowledgment was received”.

“Our legal counsel has also applied to the FMA under the Official Information Act to obtain the file and the reasonings why such extreme measures was taken”.

 “We are entitled to know if there is something wrong here, as it ultimately affects all of us, the FMA are here to protect us yet no information received, no communications, so it is fair to say are our best interests being considered in this entire process”.

"This process has been absolutely devastating for all parties involved, we need to know, we have a right to know, come on FMA what is the real agenda here”.

The shareholders are still awaiting a meeting date from Minister Bayly, considering he was given seven days to meet, a deadline that expires on Tuesday. Despite this, they remain committed to pressuring the FMA, courts, and statutory managers to ensure transparency in the process. The shareholders feel that each passing day further jeopardizes their financial recovery, while they watch costs rise with little to no explanation.

Another point of concern raised at today’s meeting was the FMA’s letter to Du Val Group dated 2nd July 2024, which expressed satisfaction with the mortgage fund investors transitioning to shareholders. This raises the question of why John Fisk is now considering a reversal of this transition and attempting to rescind shareholder status back to investor status. “What does he know that we don’t?” asked one shareholder during the discussion. This uncertainty has only added to the frustration and concern within the group.

The shareholders concluded that this is yet another sad chapter in the ongoing struggle for transparency, with so many investors at risk of losing their financial stake in Du Val Property Group. They remain steadfast in their efforts to regain control of the company and to secure a future where their investments and the projects they support can recover.