DNZ directors in the firing line

Independent director Michael Stiassny said the board meeting next Wednesday would resolve issues. Photo / Sarah Ivey

Angry DNZ Property Fund investors lashed out at the board at a meeting in Auckland yesterday.

The board of the $700 million property-owning business met more than 200 investors at Ellerslie at the end of an 11-stop national roadshow.

DNZ is to hold a special meeting next week to vote on issues including the election of two new directors.

Directors Paul Duffy, Michael Stiassny, Tim Storey and John Harvey yesterday drew the ire of investors such as Ray Bruce, who criticised the way the business was being run and Duffy and Alastair Hasell for wanting $43 million for their management contract. Bruce had invested $600,000 in DNZ since 2002 and he estimated that it was now worth $200,000.

Another investor, Vince Harris, castigated the board for the way directors were elected, calling its moves "immoral" and telling directors: "You have got to be seen to be fair."

Stiassny said the board election next Wednesday would resolve issues.

Peter Bruce, a Blenheim investor standing for the board, told how most of the savings he had put into DNZ had been destroyed.

Vicki Bruce criticised Stiassny for telling investors "to get over it and move on when we're fighting to keep our houses and our life savings".

Investors heard how DNZ's problems were uncertain dividends, limited shareholder rights, high debt levels, low share trading volumes and a low share price.

The board said options for investors to consider were to keep DNZ going as it is, liquidation of the business, a straight NZX-listing, a listing with a capital-raising or a listing with an entitlement offer. All options involve buying out the managers.

Although DNZ's net tangible asset-backing is around $2.20, it trades on Unlisted at only 73c.

Peter Bruce referred to the morning's presentation by DNZ chief executive and executive director Duffy praising profitability and the property portfolio. Bruce said much of investors' money had been destroyed.

"I see that the share price is now a third of what I invested 10 years ago. We have lost two-thirds of the money we invested with DNZ and we've lost all confidence in MMG Advisory," Bruce said, referring to the rebranded Money Managers, which thousands of the DNZ investors visited before parting with their money.

Bruce, of the Money Managers Action Group, is standing for the board with Peter Fletcher of Wellington.

Andrew Barclay of Goldman Sachs JBWere encouraged investors to move on.

"You can move this company forward or you can continue in the mire you are in. Being objective, if you stay in the mire you will be in the same position in a year's time and the share price will be the same. If you move forward, there's a good path," Barclay said.

Goldman owned no DNZ shares and had worked free since June, Barclay said.

"We don't expect to be paid until we move the situation forward."

David van Schaardenburg, also standing for the board and representing MMG, said the only reason the investor meetings were being held was because of the hundreds of hours put into resolving issues by his camp.

MMG clients had about $300 million in DNZ and his camp had spent $250,000 in the past few months "to protect your interests", he said, encouraging investors to vote for him.

* DNZ's special meeting will be held next Wednesday, 10am, at Ellerslie Racecourse.