ING deal riles MFL investors

By ANNE GIBSON

Investors in a large superannuation scheme are opposing a listed property trust's takeover proposal for $282.7 million worth of real estate.

ING Property Trust is seeking unitholder approval to buy 71 properties from MFL Mutual Fund and SIL Mutual Fund, funding the deal by issuing more units and borrowing $100 million.

ING's unitholders are due to consider the proposed acquisition at 10am next Thursday at Totem, at 104 Customs St West, in Auckland.

But MFL investor Peter Lewis, of Epsom, is urging MFL Mutual Fund investors to unite to stop the deal because, he says, it is to MFL's disadvantage.

He has called on MFL investors to write to the fund's directors demanding a special meeting on the issue.

Another MFL investor, Rene Simons, of Auckland, also questions the deal.

He said last week that because ING managed the MFL fund, there was a potential conflict of interest in the proposal and he asked why the funds would want to sell property when the market was doing so well and the returns were high.

ING Property Trust director Andy Evans said last week that the deal was a win-win situation to the benefit of all investors.

The MFL and SIL funds could replace their direct property holdings by buying shares and units in listed property trusts and companies here and overseas to diversify their interests, he said. The deal also gave ING a large amount of property, some of which would be sold.

But Lewis said the deal had no up-side for MFL investors, adding that he had held investments in the scheme for about 30 years.

He opposed, and expected most MFL members would oppose, the move which was a complete reversal of the concept that had established and supported MFL.

"If members had wanted to invest in shares, bonds, or other paper investments we could have chosen to do so," Lewis said.

"Members are well aware of the opportunities available for manipulating paper investments, and when we look at the major participants in the proposed deal we do not find much reassurance that such manoeuvres will not affect our investment," he said.

The trust's management was partly owned by Symphony Investments, associated with the former failed Chase Corporation, Lewis said.

"At the very least, the MFL directors should canvass the opinions of the members and hold a special general meeting where the matter can be openly discussed," he said.

The two superannuation schemes have about $900 million worth of assets and about 48,000 investors, ING said last week. ING's proposal is subject to Overseas Investment Commission approval.