S’pore, Aussie property fund managers in shareholder spat

SINGAPORE: Cromwell Property Group has narrowly fended off an attempt by Singapore’s ARA Asset Management Ltd to get its preferred candidate onto the board, the latest tussle between the Australian real estate manager and its largest shareholder.

At an AGM in Brisbane, 51.3% of shareholders heeded Cromwell’s call to vote against Gary Weiss, said a filing from the company.

ARA’S nomination had come during a campaign to change Cromwell’s business strategy and boost the stock’s value. Cromwell has argued that ARA is trying to exert control without paying for the privilege, and with a future listing in mind.

Before the meeting, Cromwell had said Weiss is conflicted because he sits on the boards of companies including Straits Trading Co, which holds shares in ARA. For its part, ARA had said Weiss wasn’t involved in any commercial transactions or management that would result in conflicts.

ARA signalled that it won’t give up its campaign despite the setback.

“The result provides ARA with encouragement to continue to seek necessary change through direct engagement and dialogue with our fellow Cromwell securityholders,” ARA said in a statement.

While Cromwell representatives declined to comment on the result, chairman Geoffrey Levy described it as “pleasing,” according to the Australian Financial Review.

“It’s pleasing that people – including all the corporate governance advisers – accept that it’s not appropriate if the director appointed to the board by a competitor is effectively an associate of that competitor,” Levy said after the meeting, the AFR reported.

ARA first entered Cromwell’s register in May 2018 when it acquired a 19.5% stake. The group, which now has more than S$83bil (Us$61bil) in gross assets managed, has since increased its interest to just under 24%.

ARA says that it’s becoming “increasingly concerned” about aspects of Cromwell’s performance. The company’s investments in Europe, including in the Polish retail sector, have been largely destructive to shareholder value, it said in an emailed statement.

“Our focus is on ensuring the underlying performance of the Cromwell business improves, which will, in turn, maximise the value of Cromwell securities over the medium and long term,” ARA said.