The Australian Securities Exchange has launched an investigation into the micro-cap fund behind the proposed $180 million redevelopment of the historic Waltons Building in Brisbane’s Fortitude Valley.
The $6 million Millinium’s Alternatives Fund (MAX) was suspended from trading by the ASX on August 30, a day after a meeting of unitholders was held to vote on whether to oust the fund’s responsible entity Sydney’s Millinium Capital and replace it with WA-based Primary Securities.
Replacement of the fund manager could scupper the redevelopment project, which has seen Millinium secure Torrens University as the stage one anchor tenant and propose a 30-storey student housing tower for stage two.
The deal to acquire the classic red brick buildings above Fortitude Valley train station is due to settle on September 20.
Millinium Capital stated – through an ASX announcement on August 29 – that unitholders had rejected the resolutions to oust it with just a 28.19 per cent ‘for’ vote, while also claiming the meeting was “improperly convened”.
However, minutes of the August 29 meeting obtained by The Australian Financial Review dispute this and show that all three resolutions were carried on a ‘for’ vote of 76.6 per cent by unitholders present and those represented by proxies.
A spokesman for the ASX confirmed it had imposed the suspension and there was an ongoing investigation,
“We’re examining the company’s recent activity. The stock will remain suspended for the time being,” he said.
It is understood that complaints relating to MAX are also being assessed by the Australian Securities & Investments Commission, though this has not yet progressed to an investigation.
A spokesman for Millinium Capital declined to comment.
A letter it sent to all unitholders on August 23 – but not published on the ASX – urged them to vote against the resolutions, warning that if they did not, they risked losing “transformation opportunities like the Waltons Project in Brisbane”.
In a letter dated September 3 and sent to Millinium’s lawyers HWL Ebsworth, Primary Securities said members of MAX had “resolved to change responsible entity”.
“Primary has consented to be the new responsible entity.
“We require Millinium to recognise that the meeting was properly conducted and to lodge a notice of change of responsible entity,” the letter concluded.
New Zealand fund manager Greg Marshall, who is assisting the MAX members who called the meeting to oust Millinium Capital – Mahauga Trustee Co Ltd and Salvesen Family Acct – said it was “time for ASIC to do its job”.
Asked what would happen to the proposed Waltons Building development if Primary Securities took over as manager of MAX, Mr Marshall said if the deal stacked up it would “of course act in the best interests of unitholders”.
Mr Marshall’s Logic Funds underwrote the capital raisings for MAX that occurred from December 2015 to December 2017.
The fund was previously called the Van Eyk Blueprint Alternatives Plus Trust. Van Eyk, a research house, collapsed in 2016.
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