"NZSA is mindful that retail shareholders are caught in the crossfire in such situations, as we observed with retail shareholders in QEX Logistics during 2021/22."
QEX delisted from the NZX early this year.
"We believe that retail shareholders should be mindful of the risk associated with investment in a company with near-majority shareholders," Mander said.
Mander said the NZSA recognised the potential benefit of a founder-shareholder on a board.
"However, we believe that investors should be able to rely on a major shareholders' full commitment to the shareholder culture and governance standards associated with being a public company.
"We question whether this full commitment has been demonstrated at NZ Automotive Investments."
Mander said NZSA will not support the director nominations for NZ Automotive, nominated by Sena.
"A majority of independent directors is a critical factor in protecting the rights of retail shareholders, regardless of the ownership structure associated with the company," he said.
"Given the situation, NZSA does not consider that the directors proposed by David Sena to be independent."
The company, which owns the nationwide car dealership 2Cheap Cars, had nearly $10 million wiped off its market capitalisation after four of its directors resigned citing "irreconcilable differences" between them and remaining director Sena.
One of those who resigned was Eugene Williams, who owns 34 per cent of the company.
Mander said retail investors had been caught in the crossfire between two majority shareholders.
He said shareholders can support the association's position by appointing NZSA as their proxy for the upcoming NZ Automotive Investments shareholder meeting.
Shares in NZ Automotive last traded at 58c and have lost 50 per cent of their value over the last 12 months.
