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AU BoQ chairman fund hits trouble

Property Here - Thursday, April 25, 2013

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BANK of Queensland chairman Neil Summerson is overseeing a property fund that has recently lost $30 million and has put regular investor payouts on hold.

The Australian Shareholders Association says Mr Summerson's position as the fund's chairman could have a bearing on his bank role.

It comes after BoQ in 2012 suffered the first bank loss in 20 years, blamed on bad debts caused partly by a sudden drop in property values.

Mr Summerson is chairman of APGF, listed on the Newcastle-based National Stock Exchange. It handles property funds management, investment and development, and until last year owned the Blue Tower in Brisbane's CBD.

Formed in 2006, APGF last year lost $26.2 million in a result hit by property revaluations and goodwill impairment. It lost another $5 million in its latest half results.

The fund is conducting an orderly asset sell-down and quarterly distributions are not paid in this time. However big distributions are paid when assets sell, and investors have gotten 55 a security since 2006.

APGF last week launched a proposal to buy back some investor securities, and give them preference shares.

The buy-back is funded by an $8.5 million loan bearing 10 per cent interest from APGF directors and private company Leyshon, a large APGF shareholder. That loan ranks ahead of shares for repayment.

APGF said the loan was the best available and a show of support by its directors and Leyshon to the fund.

Mr Summerson, in an emailed statement as BoQ chairman, said: ``Most people understand the global financial crisis severely impacted property and financial services sectors here in Australia and overseas. (APGF and BoQ boards and management had) responded appropriately to the challenges they faced and have always sought the best possible outcomes for shareholders.''

APGF said: "As for all property funds, the last few years have been challenging for APGF''.

Australian Shareholders Association chairman Ian Curry said corporate disappointments are of interest to investors and would be examined at BoQ's annual meeting.

Mr Curry pointed out in Mr Summerson's case that many property funds had encountered problems.
BoQ's loss last year suggested the lender had lost focus, he said, although the bank was turning around.

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