Shareholders in a public company founded by the Francis family have approved a deal to pay a connected business $17.5 million for one of Auckland's less popular properties.
Investors in NZX-listed Kermadec Property Fund voted 93 per cent in favour of buying the Finance Centre podium between Queen
St and Albert St from a subsidiary of Augusta Group controlled by the Francis family.
The property has been home to a list of business failures over many years such as a rugby hall of fame.
Mark Francis, Augusta's managing director, said the podium's vendor was Augusta Developments 95, a subsidiary of Augusta Group owned by his father Peter Francis. His wealth is estimated at $50 million and sons Chris and Mark run Augusta Funds Management, which is Kermadec's manager.
Mark Francis said Kermadec's shareholders paid less for the property than Colliers International's valuation in December of $19.1 million.
It was also in Kermadec shareholders' interests to buy the podium which shares boundaries with Kermadec's two largest properties: Brookfields House and the Finance Centre Carpark.
"Losing control of the podium would significantly limit Kermadec's strategic value and future re-development options for these properties," the company said. The deal is due to be settled by July 1.
Kermadec, which listed in December 2006, is trading around 80 cents and has eight properties valued at $145 million. Just over 10 per cent of Kermadec is in the hands of its founders - Starline Group's Jamie Peters and the Francis family.
Paul Glass of Brook Asset Management, which does not own Kermadec shares, said: "This is an outrageous transaction.
"You have to wonder what the retail shareholders were thinking of when they approved this deal."
PricewaterhouseCoopers prepared an independent appraisal which said the deal was fair and would increase Kermadec's asset base but the company would still be about $100 million smaller than the next largest listed property vehicle, leaving Kermadec the smallest of the eight listed investors.
