unit holders demand meeting

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    Unit-holders voice anger at Packer management
    By Christopher Webb
    September 16 2002

    Two small unit-holders in the Packer family-controlled CPH Investment Corp are trying to get support for a meeting that could consider a number of motions ranging from a wind-up of the trust to an apology from management.

    A five-page document is doing the rounds of various stockbroking institutions. It is headed, "Important: This concerns your investment in CPHIC! Action must be taken now to restore confidence".

    The document tells shareholders that units in the Packer family-controlled cashbox, now fetching around 38 cents, are trading at close to their all-time low of 34 cents.

    "Unit-holders who participated in the capital raising in July, 2000 at an entry price of 60 cents are suffering considerable pain with a 38 per cent loss on their investment," it says.

    "This is unacceptable to unit-holders who require at least an adequate return on investment."

    It carries a graph of the CPH unit price from the second half of 2000, when the stock was fetching 90 cents, to recent times when it has been fetching more or less around the 40-cent mark.

    The signatories said they were long-term holders of CPHIC with a stake of 317,079 units.

    They said they were both employed by financial institutions operating in the Australian equity market and their address was given as a postbox at Grosvenor Place, Sydney.

    The pair noted that CPH was sitting on $361 million at June 30 and said unit-holders deserved a detailed explanation of how and when management intended to use the money.

    "We believe that the greatest returns are likely to come from making a few solid, large-scale investments ($100 million-plus) as opposed to over-diversifying with a grab bag of small investments," they said. "It has been more than two years since the capital raising. We challenge management to make large-scale investments soon or embark on a substantial buy-back program or wind-up CPHIC."

    The pair are inviting holders to return a one-page form indicating what resolutions would be supported at a meeting to be called, which would require the support of holders with at least 5 per cent of the vote or at least 100 members.

    Possible resolutions included:

    That CPHIC management apologise to unit-holders as the price had traded below the 60-cent issue price for a sustained period.

    That CPHIC management prepare detailed written reports for unit-holders concerning the performance of investments in a range of companies ranging from Solution 6 Holdings to Endeavour Health Care.

    That CPHIC management details its strategic objectives and a time horizon over which those objectives operated.

    That CPHIC begins a unit buyback program at prevailing market prices.

    The CPHIC be wound up and net proceeds distributed to unit-holders.

    The pair stated they believed that CPHIC units remained significantly undervalued due to the limited quantity of publicly available information on current investments, limited access to management and uncertainty surrounding CPHIC's strategic objectives.

    An e-mail sent by The Age to the address on the document went unanswered.

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