Rural Funds Management admits fowl play

In a letter dated 28 November, obtained by ifa, Rural Funds Management (RFM) executive manager Andrea Lemmon admitted RFM has made misleading statements about agricultural management company ProTen’s offer to purchase 51 per cent of units in the RFM-administered Chicken Income Fund (CIF).

“It has been brought to our attention by ProTen that some of the statements we have made are not true and we wish to apologise to ProTen for any damage it has suffered as a result of us having made those statements,” the letter stated.

The letter retracts allegations made by RFM including the suggestion that ProTen is “funding the Supreme Court of Victoria proceedings commenced by Sunset Amber Pty Ltd” – a unit-holder in the Riverbank fund and client of boutique advice firm Segue – and that the company does “not have the capacity to settle on the purchases of 51 per cent of units in the [CIF]” and is not financially secure.

A source close to ProTen, speaking to ifa on condition of anonymity, said the letter “rights some of the wrongs” perpetrated by RFM in its management of the three funds it is proposing to merge and list on the ASX.

“RFM has been able to say whatever it wants to unit-holders,” the source said, adding that ProTen has been prohibited by corporations law from making direct statements to unit-holders in the funds.

The source alleged that the letter is the result of legal and regulatory intervention. “We know ASIC has been looking into [RFM] – I would not be surprised if it was subject to an ASIC investigation,” he said.

A number of financial advisers – calling themselves the Investor Action Group – have opposed the re-evaluation of the RFM funds and sought to have the fund manager removed as responsible entity, backing ProTen’s bid and vowing to "keep the bastards honest".

In November, RFM issued a statement describing this group of financial advisers as “opportunistic” and accusing them of making “fallacious claims” to their clients.