The Sydney Morning HeraldballywilliamroeCompaniesMarketsThe economyBanking & financeEntrepreneurshipMediaWorkplaceExclusiveBusinessMarketsRenewables‘No moral or ethical foundation’: Solar fund wipeout raises investor hacklesBy Sarah DanckertSeptember 23, 2022 — 12.01amSaveShareNormal text sizeLarger text sizeVery large text sizeInvestors are calling on the manager of ASX-listed solar energy investment group New Energy Solar to waive a $10 million fee from the group, which is now in wind-up mode after failing to deliver on investment expectations.But the fund’s manager – E&P Financial Group, chaired by former Essendon president David Evans and formerly known as Evans Dixon – is planning to accept the fee despite the plea from investors and New Energy’s board, according to sources who declined to be named for confidentiality reasons.Solar should be a booming business but Australia’s only pure-play listed group is in wind up mode.CREDIT:BLOOMBERGDisquiet over the management of New Energy Solar has been growing for some time, with some investors alleging E&P has used the group like a “cash cow”. They also allege that $73 million in fees have been taken out of New Energy, once valued at $300 million, over the course of its seven-year existence.New Energy listed in 2015 as the first and only pure-play solar investment company on the ASX. It was modelled on other successful groups. However, the company is currently on track to be delisted and wound down, after it failed to raise more capital to fund its expansion plans. According to some investors, New Energy came undone after becoming entangled with the broader issues within E&P business.E&P was created by the ill-fated merger of wealth managers - Evans and Partners and Dixon Advisory - and was formerly known as Evans Dixon.In August, New Energy announced it had sold its 14 remaining solar assets to MN8 Energy, Goldman Sachs’ renewable energy investment spin off for $US245 million ($365 million). Shareholders will receive capital returns, in tranches, of up to 95c, still well below the fund’s current net tangible asset backing of $1.12. As part of the sale process, E&P is entitled to a $10 million asset disposal fee.Sydney-based investment advisor Trevor Thomas, who has more than 350 clients invested in New Energy Solar, says he has written to the CEO of E&P to request the fee be waived as a gesture of good faith.“New Energy has failed in large part because of its entanglement in the Evans Dixon mess, and it seems unconscionable that Evans and Partners wouldn’t waive its final fee to reduce the loss to investors,” the Ethinvest boss told this masthead.“The investment manager may have a legal right to a final payment, but it has no moral or ethical foundation in my view.”“Multiple failings within the Evans Dixon Group are responsible for the fact that the directors feel compelled to recommend that shareholders are best served by winding the company up and crystallising large losses.”The company referred inquiries to E&P which declined to comment.Around 85 per cent of New Energy’s free float were clients of the Dixon Advisory business. Dixon Advisory, which is now in administration, was this week fined $7 million following an investigation by the corporate regulator into some of its planners failing to act in the best interest of clients by giving advice relating to Dixon managed funds.Thomas says investors in New Energy from the Dixon Advisory business sold out in droves as they tried to cover losses on their Dixon-recommended investments, most notably the group’s US Masters Residential Fund.The view of investors is backed by the independent directors of New Energy’s board, which is chaired by former Centrelink chief Jeffrey Whalan and includes former member for Bennelong and ABC anchor Maxine McKew and renewable energy focused former investment bankers - James Davies, John Holland and John Martin.“The waiver was not agreed to by the investment manager, so the company is obliged to pay the disposal fee which is calculated as 1.5 per cent of the combined value of the equity and debt of the US solar assets,” New Energy’s board told investors in August.Shareholders will meet on September 26 to vote on the sale of the assets.
