In our opinion the original DNZ structure, as designed and promoted by Money Managers, was fundamentally flawed and biased toward a few key people who controlled the enterprise.
To understand the situation we quote Brian Gaynor from the Herald
“The origins of DNZ go back to the 1996 to 2001 period when Money Managers established 32, mainly single property, syndicates.
Following the appointment of Paul Duffy as chief executive in 2001 these properties were merged into three companies; DNZ Income, DNZ Foundation Property Fund and DNZ Retail. On September 30, 2008 these three companies amalgamated, together with DNZ Tauranga, to form DNZ Property Fund.
There were two unique features of this group of companies.
The first was the external management contract, which was previously owned by Paul Duffy, Alastair Hasell and Doug Somers-Edger until the former two bought out Somers-Edger a few years ago. [nb this is said to be for $15 - 20million ed] The management contract, which was extraordinarily lucrative as far as Duffy and Hasell were concerned…
The second was the capital structure whereby there were 469,965,609 “A” shares, held by the public, and only 10 “B” shares, held by management. Under the constitution the “A” shares appointed one of the six directors with the “B” shares appointing the other five.
In effect the “B” shareholders had almost total control over the company and the “A” shareholders did not get to vote on the current capital raising or the purchase of the management company.”
read more at Brian Gaynor: DNZ offer fresh slap in face for small
The whole historic structure as established by Money Managers has been roundly criticized by former board member – Simon Botherway.
“I would never have advocated anyone invest into the structure established by Money Managers.
Why investors were put into such a structure in the first place is a question which should be put to Money Managers.
Their principals and associates have benefited from this arrangement. The value transfer from shareholders to manager took place when those poorly advised investors were convinced to part with their money in the first place.”
DNZ has thousands of existing shareholders, many of whom bought into the property business via Money Managers.
read more at Director slams old DNZ structure
How should DNZ Proceed?
Basically there are no easy decisions when looking at what we should do. None of the options so far identified have great appeal and they all have unpalatable aspects. It is very much a case of selecting the least bad alternative.
To summarise our view on how the company should proceed:
| Liquidation /
Wind Down |
NZX Listing with Capital Raising | |
| Debt Level % | Slowly addressed | Resolved quickly |
| Dividend | Probably cease | Should recover over time |
| Share price | Not applicable | Should improve over time |
| Ability to sell shares | No real opportunity to exit | Traded on an active market |
| Management Contract | Entitled to claim as a creditor before any payments to shareholders | Will need to be bought out |
| Company Constitution | Not addressed | Resolved |
| Practicality | Legally difficult, will require a High Court winding up order | Should proceed relatively smoothly |
| Time to exit company if desired | 3-5 years, when liquidation finalized | 6 months, when float happens |
| Preferred | This Option |
To read more on this view our letter to shareholders:
To_Every_DNZ_Shareholder-final
We promoted two candidates to the board to represent small investors interests.
1% is all we were short of getting someone on.
But we take heart because from the process we:
- Learnt a lot about DNZ and gained clear insight into how it can prosper given the right foundations
- Welcomed a lot of people to our group who, up to then, and never heard of our organisation
- Managed to influence the future direction of DNZ – MMG wanted a managed wind-down but have changed tack to now support a direction which we broadly promoted.
We now know the key people in DNZ and will be watching to ensure they act in all of our interests.
Not a lot has been happening with comments lately!!! How do “we” vote for the DNZ meeting that is happening on the 10th August. Are “we” in favour or re electing Mr Storey and Mr Harvey as Directors?? Are “we” in favour of the Directors to be authorised to fix the fees and expences of the auditor of the company?? I would appreciate your comments please. Thanks, Gail.
Beware Energy Securities LP Offer
Read carefully Payment details
10 equal annual installments
Energy Securities is a company associated with Bernard Whimp well known for oppurtunistic share offers
thanks for the warning,offer just arrived today.
The greedy Great Whites must have taken such enormous chunks they left a few crumbs.
Obviously they were full to the gills and a few of their mates are now on the scene and leaping over each other to scalp us.
Number two offer arrived today, how many more .
Maybe the culprits at the top will have a conscience and offer us its true value. They would come out laughing and still counting their millions.
Don”t hold your breath.
Rene
More sharks are circling, Carrington want the remains that may be available after MMG experts? have had more than their fill of our hard saved retirement funds.
We have been ravaged by these hungry crafty bastards but there are optimists who want the crumbs we MAY still hold.
Financial advisors? Boy have we learned a lesson.
Again thanks for the warning, how does this conman get personal details, name and address etc
Thank you for that information about Carrington – it confirms my thoughts about the letter. I had searched the Companies Office Website also trying to find the background of Carrington Securities LP.
I assume that with the closing date 9 August 2010 anyone accepting the offer would not then be entitled to the distribution due on 15 August????.
I will certainly return the form with my thoughts on his behaviour and hope other DNZ investors do likewise.
I too have just received the Carrington Securities offer.
It is an insult,
It is unscrupulous.
It is preying on the vulnerable
Your shares will be worth much more that this offer if you wait until the end of August.
So if you want something to do – take the reply paid envelope and get a felt tip marker and write something like
“THIS OFFER SUCKS”
or “THIS OFFER IS UNACCEPTABLE”
or “HOW DARE YOU”
Then you can derive a little pleasure from having Carrington Securities pay to have your very important message of displeasure to be delivered to their office.
I’ve just done it !!!! and I feel alot better!!!
We have just got a letter from Carrington Securities LP offering to buy our shares for a very low amount.
No way! But there’s no way we would buy any more shares in DNZ either.
I’ve been looking up Carrington Securities LP on Google. Very interesting stuff there.
If somebody is trying to buy them they can’t be completely worthless. Let’s see what happens next.
There are lawyers in business to obtain redress for ripped off people for a percentage of compensation won in a class action against illegal use of investors money and dubious advice from Money Managers
There are investors in DNZ and First Step with enough knowledge and skill to arrange this and the cost of the fee,if won,would be shared by all. No recovery no payment.
I am not clever enough to know if this is a viable step
to pursue. Enough of you are. Best wishes. Rene
See more E.Mail Re. DNZ on this Web site under OUR STORIES.
Shame that the govt. of this country has no guts to protect the elderly of this country. Who will invest money in this country with wild west investment rules
I lost most of my savings in First Step and now in DNZ
Thanks Money Managers .
Somers-Edgar is still involved in MMG advisers through NZ Funds Management
Could not understand why debenture holders agreed to convert debentures to shares. I held debentures because I knew I would still get my 9% interest but majority decision prevailed against my vote.
Really gave up hope when I discovered Hassell’s son also employed by DNZ.
I have just sent the following e-mail to DNZ.
“Why don’t you have a daily activity report for DNZ shares on the Unlisted web site. This update every Friday at 5pm is not good enough. We, the share holders, want better than this. Considering what you have recently done to us, we need a better reporting system to see what is happening to our remaining diluted shares other than a weekly report”.
When I was sold my investment in the Dominion property fund it was to all go into the Johnsonville retail Shopping centre and it was promoted by Somers-Edgar every Sunday morning on Radio Pacific as a fund with almost no debt and the returns would be 8.5% at least with capital growth. This was sold to me by Alan Brake the Taupo Money Manager man and in fact I remember about four years ago a sales pro mo at Chantillys Motel conference room with about 12 or 15 punters and the them was why would you persist with res rentals with a return of about 4% when you could get 8 or 9 % in this fund with no work or risk.Well I hope those 12 or 15 others there kept their rentals as at least they will get their money back.When I called into talk to Alan Brake about three weeks ago, guess what .He has deserted.He has been charging me a fee every year to look after my interests.[ha ha] We are now told the Feb payout is in doubt which means we are not going to get it.Where is all the money going.
Ian Redgrave
mmg on the 2-12-09 have my DNZ shares at $2.1077 per unit, DNZ value .82c.
My understanding was that before the consolidation and the DNZ share offer we could only sell our shares on the secondary market at a value of around .43c. per unit.
Could someone explain what is going on, and what value are our DNZ shares if we wanted to sell them.
What about including the DNZ fund.We investors/shareholders have been totaly screwed.We have been milked by Duffy and Hasell.This is worse than HanoverAt least Hanover investors look to getting back around 76%.What about a class action against them and the advisors who have been charging a 1% annual fee to look after my interests.[ha ha]
The payment of $43 million dollars to Duffy & Hasell is corporate greed at it’s worst.
The DNZ board has ignored shareholders and been manipulated by Duffy and Hasell. They have with their masterly management reduced shareholder value to a ridiculous level – and they get $43m for this brilliance.
This must NOT be allowed to happen.
We have to act at a grass roots level to make Duffy & Hasell realise that this is insulting to us 8000 or so existing shareholders.
I propose to place adveriisments on the financial pages of NZ newspapers exposing this corporate greed and I am looking for financial support for this initative.
If you can support me please email at dnzsucks@yahoo.com
One correction it was twenty million payout to Paul Duffy and perhaps Paul has made a lot of statements since we as the original investers ,in DNZ PROP[ERTY FUND put a lot of trust in him, as a retired couple we are dissappointed .
Lets hope somethimg more positive and honest comes out of this whole exercise
Will
I was lucky that I withdrew all my first steps investments just in time before the rot set in, I must admit I was surprised when I found out Money Managers had been been putting the money into car finance instead of the four levels of risk investments.
We have not been so fortunate now with the DNZ PROPERTY FUND and received our computer share statement yesterday which showed we had 8500 shares wiped without any notification,and that the one for one on share offer if not taken up would have a further dilution of shares as I understand
Take my advice dont trust Paul Duffy C.E.O. and he still is the C.E.O after getting his twomillion
It makes one sick
We now have DNZ to add to the list of schemes promoted by Money Managers that has lost us considerable ammount of money.When will it stop or is there more gloom to come. I just hope if there has been laws broken those accountable get their just rewards
on TV3 Business Breakfast this morning DNZ property fund director Simon Botherway talked about the share offer. If you missed it, here’s the link to the video clip.
see http://www.3news.co.nz/DNZ-full-steam-ahead-with-IPO/tabid/369/articleID/131360/cat/41/Default.aspx
if you cant open link, here’s is key points.
1. Problem arose when Structure of the company [before the current process] was put together- it had A & B shares and the managers wielded considerable powers and they deeply entrenched.
He said that YOU COULD MAKE A CASE THAT PEOPLE THAT WERE INVESTED IN IT WERE POORLY ADVISED and that it was not something that he would have vested in personally.
2. he has done due dilence and would not have come on board if there wasnt ant tidying up process set in place.
3. links from the past have been severed
4. other listed property trsuts were unit trusts no protection from companies act. Being externally managed manifest itself in managers accumulating assets andtoo much debt. Internalisation would lead to better or more appropriate standards of corporate governance.
Watching this interview, I think We can take heart that whilst we have certainly been poorly advised [and perhaps if we can put this case together , we have a legal case against Money Mamagers] we are moving forward, albeit from a very much lower base.
The buildings in the portfolio whilst not trophy buildings, are quality buildings with good tenants and the WALT of 4.9 years is very good for the property sector
re point (a) the shareholding was consolidated in a 2 new for 5 old shares so technically it is not reduced. BUT at the new price of 82cents per new share it implies a price of 32.8cents per old share versus the Oct 09 NTA of $84.31.this price is even worst than that of National Property Trust NAP [49cents] which has been the worst performer among the listed property trust and i do recall DNZ crowing that they were indeed more blue chip that the likes of NAP.
I could not see where they got the go ahead for the share consolidation. i spoke with MMG Hamilton and they didnt have any answer, said their head office was checking on this too.
I didn’t vote for the last merger of various funds as I was not at all pleased with the valuation used and the treatment of the depreciation making my new holding worth automatically less. unfortunately too many people voted for it so it went thru.
the sale of thej management right at a fancy $43m is indeed disgusting
DNZ Property treatment of existing Shareholders is un believeable.
a. Shareholdings have been reduced by three fifths
b. Market share price starts at 82 cents – a breakeven share price on Capital is around $1.70 (yeah right)
c. Dividend payments will be halved
d. CEO Duffy and former Chairman Hassell get a $43 million payout to share
In y opinion DNZ (Duffy) has been deceitful in the way they merged all funds and with NTA’s values they quoted (the last on 7 October 09 at 84.31 cents). Their way out now is by saying “the market will decide”.
I’m sure new investors will benefit but I don’t know how DNZ will ever be able to look the old original Shareholders in the eye – and the problem is I don’t think they even care!
PS – I think Duffy was originally appointed by Doug Somers !!!!!