Ann: Update on Sandalwood Properties Ltd - AFSL, page-13

Growers seek to oust Quintis as responsible entity of plantation project

• Dec 14 2017 at 8:08 AM
• Updated 1 hr ago

• My Saved Articles

http://www.copyright link/content/dam/images/g/x/k/v/x/s/image.related.afrArticleLead.620x350.h049f8.png/1513240750830.jpg
Teague Czislowski: "Quintis is in the business of making money from the sale of sandalwood and related products and they would therefore want to pay the minimum amount to growers." Trevor Collens
A group of growers behind one of Quintis's plantation projects is seeking to oust the company as the scheme's responsible entity, arguing the former TFS is conflicted, and growers can get a better deal for the harvest themselves.

Quintis responded that it was fully compliant in its actions and "will continue to act in the interests of all growers", challenging the claims against it.

The project is marketed as TFS Sandalwood Project 2002 and it was targeted at retail investors. Growers hold concerns that Quintis will acquire the logs cheaply as it is the logical buyer.

Those growers, organised by investor Teague Czislowski, say they unsuccessfully tried to serve notice upon the chairman of Sandalwood Properties, the responsible entity, to have it removed. Mr Czislowski said they have now called an extraordinary general meeting for this purpose.

"This is like putting the fox in charge of the henhouse and growers have overwhelmingly rejected it," Mr Czislowski said in a statement.

'Severe conflict of interest'
"Quintis is in the business of making money from the sale of sandalwood and related products and they would therefore want to pay the minimum amount to growers.

"At the same time they have a duty to obtain the highest price for growers. This is what most would call a severe conflict of interest."

Quintis disputed the growers' claims that the responsible entity is refusing to provide information, failing to communicate, and ignoring the wishes of growers.

"Sandalwood Properties Ltd has been dealing with Mr Czislowski's requests since September 2017," it replied. "The company can confirm that its chairman met with Mr Czislowski in accordance with his request. Subsequently [three] letters have been written to Mr Czislowski on behalf of Sandalwood Properties.

"The steps that Mr Czislowski has sought to take have consistently failed to comply with legal requirements. The resolution at the meeting proposed by Mr Czislowski is not compliant with the Corporations Act. Any vote on the resolution would be non-effective and incapable of implementation. Mr Czislowski is aware of this."

Quintis has another concern with regards to Sandalwood Properties. The company disclosed to the ASX on Thursday that it was working with ASIC to resolve a "technical" breach of the Australian financial services licence held by the responsible entity which arose because Sandalwood Properties provides a guarantee to bondholders.

Growers are worried that potential participants in the harvest auction would be discouraged from dealing with Quintis given its liquidity problems. Quintis shares have been in a trading halt since May, and the company is trying to recapitalise.