Waltus Property Finance is asking the High Court to overturn the cancellation of its prospectus by the Securities Commission.
The cancellation comes on the eve of a contentious special meeting to merge 29 investment syndicates promoted and managed by the Waltus parent company.
The meeting, scheduled for Tuesday, has already been deferred once in the face of strong opposition from shareholders in some syndicates.
Waltus is furious with the commission.
"The commission's decision is based on a spurious interpretation of one word," said chairman John Hodge. "We strongly disagree with this ruling and have received legal advice which supports our position."
The company failed in an attempt to get a judicial review yesterday, and has lodged an appeal with the High Court.
Commission chief executive John Farrell said the prospectus and investment statement, both dated May 12, 2000, were cancelled because the commission believed they were misleading.
Its concern centres on differences in the wording between the trust deed and the investment statement and prospectus.
The statement on who the finance company could lend to was considerably less restrictive in the trust deed than in the other documents, Mr Farrell said.
As a result of the commission's decision, Waltus Property Finance can no longer use the cancelled prospectus to raise money and must return all money received to subscribers.
Outraged Waltus appeals
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