Court orders observers for Perpetual Trust
Fri, 13 Jul 2012 2:03p.m.
The High Court has ordered two independent observers to keep tabs on Perpetual Trust's cash management and mortgage funds amid concerns over related party loans.
Ahead of a substantial hearing early in August, Justice Paul Heath yesterday made an interim order for Pyne Gould subsidiary Perpetual to appoint Vivian Fatupaito and Christopher Duffy of WHK to oversee the activities of the two funds.
According to his judgment, Perpetual will also have to get an independent valuation for five properties put up as security by Torchlight Fund No.1 LP, which is managed by Pyne Gould principal George Kerr.
The order was made at the request of Trustees Executors, the funds' statutory supervisor.
"Sensible arrangements have now been made for interim orders to be put in place pending a substantive hearing on 3 August 2012," the judgment said.
Perpetual yesterday froze repayments of its $56.2 million mortgage fund following a surge in redemption requests after details of the cash fund's $28m loan to the Torchlight fund emerged.
The loan attracted attention from Trustees Executors, which passed on its concerns to market watchdog the Financial Markets Authority.
Perpetual disputes the FMA's interpretation of the loan, but has asked Torchlight to prepay the facility ahead of schedule, which it expects to be completed this month.
Justice Heath said the interim order "will enable the statutory supervisor to monitor" whether the repayment has been made, and let the court be "more fully apprised of developments when it deals with the substantive application".
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