By Chris Hutching
Friday 14th December 2001 |
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Securities Commission chief executive John Farrell confirmed that all subscriptions must be returned to investors before Waltus issues a new amended offer document.
The commission recently issued a general warning about contributory mortgage schemes and last week ordered another company, New Zealand Commercial Mortgage Brokers, to cease acting as a contributory mortgage broker and hand over control of the company to Christchurch chartered accountants David Crichton and Keiran Horne.
Waltus principal Shayne Hodge said commission had concerns about the definition of what was deemed to be a contributory mortgage. The offer document had been drawn up by law firm Phillips Fox and a second opinion from Chapman Tripp supported the wording, he said. But the commission's view was different and the offer document was being redrafted.
"We're most concerned to maintain the confidence of our investors and financiers. We feel we've been caught in the middle on this one but we'll simply get on as quickly as we can."
For most investors the decision to subscribe is a matter of protecting their existing investment in the Prime Properties syndicate, which owns one of Auckland's top properties, the KPMG Centre.
The money will be used to refinance the property after Commonwealth Bank declined to roll over a $24 million loan because of concerns about the declining value of the property and the KPMG leases that run out in 2005.
Waltus directors secured most of the funding from another bank and issued the contributory mortgage offer to raise $8 million, which Mr Hodge said had been fully subscribed. Some analysts said Waltus paid too much for the building - $50 million - in 1997. Latest valuations put it at $42.273 million.
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