31 August 2010

Request to Convene a Meeting of Unitholders

Balmain Trilogy Investment Management Pty Ltd (Balmain Trilogy) is in receipt of another requisition to call a meeting of unitholders. The requisitioning members represent only 1 % of unitholders, and are essentially the same group who requisitioned Balmain Trilogy to include Resolution 3 of the Notice of Meeting & Explanatory Memorandum relating to the 1 September meeting.

As with the statement accompanying the previous requisition, the current statement is again misleading, confused and ill-informed in several material respects. A copy of their requisition together with a table which sets out Balmain Trilogy's preliminary response is available by clicking on the below links.

As you can see the statement proposes for 12 separate resolutions to be considered regarding changes to the Fund's constitution. These 12 resolutions have been listed in an ad hoc fashion, and in some instances not only demonstrates a lack of understanding of mortgage funds, but also basic economics. Further they add no benefit to unitholders over what is already proposed by the New Strategy. In fact, their proposals, if implemented would have a detrimental impact on the operation of the Fund and are not in unitholders' best interests. In our opinion, the proposals put forward by these minority members are not representative of the wider unitholder community.

As their second requisition was received well after the Notice of Meeting for the 1 September meeting was issued, it was only possible to deal with their first requisition in the Notice and not their second. As such a separate meeting of unitholders will need to be held to consider the second requisition. Unfortunately, despite the flawed and non representative nature of these proposals, theoretically this minority group could continue to requisition meetings and waste significant resources of the Fund. The cost of holding a meeting in the Fund is substantial. The fact that within a period of less than two months they have already requisitioned 2 meetings should cause unitholders concern as it suggests disorganisation and a disregard for Fund resources.

Balmain Trilogy welcomes the input of unitholders in determining the future of the Fund, as evidenced by the Investor Committee and the substantial soundings which took place in developing the new Strategy. However, in opinion, this group is wasting Fund resources and as such we hope that the requisitionists will withdraw their requisition.