The New Zealand Shareholders Association has called for Dorchester Pacific to be liquidated in a bid to recall $45 million spent by the troubled finance company in the past two years.
The association has written to Dorchester chairman Barry Graham requesting a wind-up resolution be put to shareholdersat the company's annual general meeting on August 21.
Dorchester announced plans to ask its investors to approve a "deferred repayment plan" or moratorium last month. Graham cited the rapid decline in the property finance market and a continuing fall in reinvestment rates for its decision to wind down the business.
But yesterday Shareholders Association chairman Bruce Sheppard said it saw the decision to call for a moratorium as an act of insolvency and it was therefore appropriate shareholders consider whether or not liquidation was a better option for the company.
Sheppard said appointing liquidators might allow several transactions completed in the last 24 months to be "voided" or cancelled, bringing the cash back to the company and improving the outcome for shareholders and debenture holders.
Those transactions include the $25 million Dorchester paid for a stake in St Laurence which was written down by $11.4 million in March and two loans of $10 million each repaid to interests associated with Kevin Podmore - the main owner of St Laurence - and cornerstone investor in Dorchester, and interests associated with Hugh Green Investments.
Sheppard said if the resolution was put to the meeting the board would also have to decide whether to allow Podmore and Green, who are major Dorchester shareholders, to vote.
"It is our view that they are conflicted and thus should not be eligible to vote on the resolution," he said. Sheppard said if the resolution was not allowed to be put at the AGM he would call a special meeting for it to be put to shareholders.
Graham said he was not prepared to comment on the letter as the company had yet to officially receive it. Any further comments would be subject to the board's discussion and advice, he said. Dorchester shares closed yesterday at 20c.
