HFA points to $13 million deal-breaker
HFA Asset Management (HFAAM) has responded to allegations it breached a management agreement with HFA Accelerator Plus (HAP) by turning the spotlight on an unusual request relating to $13 million of shareholder funds made by HAP.
HFAAM managing directors Robert White and Oscar Martinis said in a statement that under the management agreement between the two parties, and as required by the prospectus, about $13 million of HAP shareholder funds are held in an independent third-party custodial account in the name of HAP.
HFAAM said HAP created an internal board policy that led them to request HFAAM move the $13 million from the third-party custodial account into a "general account controlled and managed solely by the non-executive HAP directors".
HFAAM said it saw no basis for the request and felt it was contrary to the fund's prospectus.
"Despite HFAAM's repeated queries, HAP did not identify any proper basis for its request to remove shareholder funds from the security of an independent custodial account in the name of HAP and place the funds into a general bank account solely controlled by non executives of HAP."
The group said on this basis it "was not obliged to and did not transfer the funds".
HFAAM denied all of the allegations made by HAP, and said it was not in breach of the management agreement and had at all times acted in the best interests of HAP shareholders.
In relation to the ongoing dispute over management fees between the two groups, HFAAM's managing directors said they had been working with HAP to resolve this dispute over the past 12 months, and that settlement discussions were terminated by HAP last Friday morning without notice to HFAAM.
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