Waltus cleared of double-dipping in merger case

By Campbell McIlroy

Friday 14th September 2001

SHAYNE HODGE: Made it clear cut there was no case to answer.

The controversial merger of 27 Waltus property syndicates played out its final chapter this week as the High Court cleared the company on charges of double-dipping.

Master Jim Thomson described the action by minority shareholders as a somewhat opportunistic submission made late in the original hearing.

The case centred on whether pre-paid promotion and administration fees paid by the syndicates to Waltus had been built into the new proposed management fee arrangements.

Master Thomson said the new fee structure did resolve the perceived problem originally identified.

Waltus Property Management director Shayne Hodge said decision made it very clear cut that there was no case to answer.

"But the cost has been considerable and these objectors flew in the face of a clear cut democratic vote. And it has done nothing to add value to the whole exercise."

Waltus submitted during the case that promotion and administration fees were one-off, upfront, non refundable fees that had been written off in the year received and therefore were not an asset in the books of the syndicates.

A statement from the company said it was able to show it made a number of compensations in the merger proposal which exceeded the amounts already paid, and therefore, investors were not being asked for a double payment.

The merger proposal was passed by an 86% majority of the investors who voted in November last year.

High Court action by a group of minority shareholders, led by Brian Moyle and Murray Weatherston, representing 3% of the new company, failed to prevent the merger proceeding.

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