Cromwell Property Group (Cromwell) (ASX:CMW) notes Dr. Gary Weiss’s recent statement that he will retire from the Board of Ridley Corporation, and his conditional resignation from the Board of Straits Trading Company Limited (Straits Trading) - ARA Asset Management’s (ARA) largest shareholder and the major beneficiary of ARA’s future IPO - if he is elected to the Cromwell Board.
Cromwell welcomes Dr. Weiss’ belated acknowledgement of his over-boarding. However, Dr Weiss remains Chair of Ardent Leisure and Estia Health, companies which are each dealing with significant corporate issues, including fighting a class action, potential criminal prosecution under Queensland workplace laws and the aged care royal commission. Including these two very challenging chairmanships, Dr Weiss will continue to hold the equivalent of eight director appointments.
It is troubling to Cromwell’s Board and many securityholders that ARA continue to insist Dr Weiss is the only suitable candidate to sit on Cromwell’s Board. A reduction from nine to eight appointments still makes Dr Weiss one of the most over-boarded directors in Australia. The flippant comment that he ‘doesn’t play golf’ is, in Cromwell’s view, concerning given ARA’s steadfast refusal to require an alignment with best practice corporate governance standards expected by Australian investors.
ARA has also repeatedly stated that Dr. Weiss’s resignation from Straits Trading removes any conflicts he has with regards to ARA (only). This is patently untrue as he is the nominee of a direct competitor, is intimately involved in ARA’s unsolicited and hostile campaign, including meeting investors and directing media and would not, in any case, be considered independent for three years after resigning his role at Straits Trading. These facts firmly refute ARA’s claim of his independence.
Cromwell also encourages Dr. Weiss to declare all other non-ARA conflicts that he may have. A declaration of all conflicts is required for complete disclosure. This is particularly important as there has been ongoing purchasing of Cromwell securities by entities in Singapore which have refused to provide beneficial ownership details and may have links to interests friendly to ARA.
It was only Cromwell’s submission to the Takeovers Panel that forced Mr Gordon Tang and Ms Celine Tang, who have long standing business relationships with ARA, to acknowledge that entities and individuals close to them, including family members Yang Chanzhen (mother) and Tang Jialie (daughter) were acquiring securities in Cromwell. Their holdings are shown on Cromwell’s website.
The daughter, Jialie Tang, is now the largest individual securityholder in Cromwell with nearly 109 million securities valued at more than $115 million. Cromwell struggles to accept the assertion that Ms Tang is independent of, and has no association with, her parents, despite living at home with her parents, being in her early 20’s, and working for the family company.
Cromwell remains concerned about the relationship between ARA, Tangs, Straits Trading and Dr. Weiss. Concerns about the relationships between the parties and their path to taking Cromwell over by stealth, without paying a premium for doing so, is documented on Cromwell’s website.
Dr Weiss is working closely with the parties in their unsolicited and hostile campaign. His large number of directorships demonstrates, in Cromwell’s opinion, a disregard for best practice corporate governance in the Australian marketplace, and his clear relationship with ARA, a direct competitor to Cromwell presents what Cromwell consider to be material risks if he is appointed to Cromwell’s board. Cromwell believes that he remains substantially conflicted and over-boarded.