Tensions high at DNZ meeting

Hundreds of investors in the controversial DNZ Property Group met in Auckland yesterday to vote on the future of the business.

But DNZ's management said it could not declare the outcome of the meeting immediately and needed to count votes.

Some investors expressed anger at how the $700 million real estate conglomerate was run.

A Tauranga investor called for the Commerce Commission to investigate the management contract jointly owned by Alastair Hasell and executive director Paul Duffy.

The investor also wants the Government to suspend that contract and said Duffy and Hasell were not entitled to the $43 million-$50 million valuation put on the management contract.

But others backed the management.

Matthew Goodson of BT Funds Management, which holds about one million DNZ shares on behalf of clients, said he supported the management.

"We do have confidence in the board, which has inherited a very difficult situation and has done an excellent job of moving DNZ forward," he said, referring to Duffy and fellow directors Michael Stiassny, Tim Storey and John Harvey.

Some investors backed Duffy, describing him as one of New Zealand's best property managers. Duffy did not speak.

The meeting's first resolution sparked the most controversy, as shareholders debated a no-confidence vote in the existing board, a motion put by MMG Advisory Partners.

One investor said he lacked trust in both the board and management.

"We have been ripped off. The board has been dominated by the manager which is hopeless," he said. Storey attempted to move on but shareholders shouted him down.

Peter Bruce of the Money Managers' Action Group sought investors' vote for a boardroom seat.

"DNZ is a good company, well-managed with good assets and profitable. So why is my share price a third of what I paid 10 years ago? Why can't I sell the shares? Why is the dividend getting poorer and poorer? We're frustrated because we have a great company but it's worth a lot less than we paid for it. These are bitter pills to be swallowed and no one can pull a rabbit out of a hat," Bruce said.

Peter Fletcher, also of the group and also seeking election, said he invested in DNZ via Money Managers in 2006 "and I've spent the last few years wondering what went wrong".

"I've put a lot of effort into unravelling First Step and now DNZ. Both suffer from the same design faults: shareholders were rendered virtually powerless by the constitution and maximum fees were heisted from the investment."

David van Schaardenburg, a partner in NZ Funds Management and non-executive director of MMG Advisory Partners, sought election and told the meeting he had achieved a number of successes, including ditching the former capital-raising proposal, creating a shareholder voice with two board seats and ensuring the managers seriously considered his proposals.

DNZ plans to hold its first meeting of a new board on Monday. DNZ's shares are in a trading halt on Unlisted.