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Britomart claim to reach court about Easter

Savoy Group’s claim against Auckland City Council over the Britomart project failure will be for more than $100 million and should be lodged in the High Court in about six weeks.

At the same time as councillors have been working towards a lesser, but potentially as expensive, transport interchange for the Britomart site in downtown Auckland and Savoy’s lawyers have been putting together the damages claim, Savoy director Jihong Lu (right) has been involved in a far bigger, and proceeding, transport infrastructure scheme in the Philippines, embroiled in a High Court case over sale of shares in Smartel and is about to launch his group’s formal bid to take over a listed Hong Kong electronics manufacturer.

Meanwhile Savoy Equities, the group’s New Zealand-listed company, hopes to have resource consent in a few weeks for its major extensions to the Hyatt Regency Hotel property. Some Savoy Equities staff have also been employed on the Philippines venture.

The extent of Mr Lu’s active business ventures is ironic, given the state of the Britomart bus terminal, where Savoy companies were to take on a development role, earning potentially large sums from the 11 towers to be built above the five underground transport centre and parking levels.

Pacific Capital Assets was listed to give small investors a stake in that project and in further proposed infrastructure project involvement in New Zealand, Australia and Asia. But that listed company folded with the continual holdups on the Britomart scheme.

The city council canned the project late last year, claiming Savoy had not met its part of the master development agreement, but Savoy claims this was a contrived ruse to meet the political ends of councillors, and a mayor, elected to oppose the scheme.

Britomart litigation

“The amount will be substantially over $100 million,” Mr Lu said of the damages claim over the torpedoed Britomart project. “We’re definitely not giving up.”

Part of the group’s litigation process involves establishing a distinct vehicle within the Britomart Investments subsidiary, while the parent company, Savoy, and rest of the group carry on with new projects.

“I still have a strategy for New Zealand. Just because I’ve been away, I haven’t given up that strategy. I want to make sure the entity for battle is sufficiently quarantined not to backfire on my other business in New Zealand.”

Savoy Equities chief executive Kerry Haycock said the claim against the council would be for breach of contract, damages for costs, loss of potential earnings and conspiracy among councillors “to achieve a certain outcome. That outcome injured us.”

Said Mr Lu: “They also frustrated the ability of the parties to complete. There were market rumours that Jihong Lu wouldn’t come up with the funds. As we started getting the documents in place, they realised, ‘Gosh, he will come up with the money,’ and they pulled the plug. I wasn’t even here at the time the announcement was made.”

Hyatt start

Compared to the long and ultimately fruitless haggling over Britomart, Mr Lu hopes the group’s expansion back of the Hyatt Regency Hotel, along Princes St and flowing down to Eden Cres, will be underway soon.
Savoy hopes to get resource consent in a fortnight for the project, to build the 108-unit Hyatt Residences and extent the hotel’s existing conference facilities.

That would enable Bayleys to open its marketing campaign before the end of this month. Despite the site’s obvious distance from Auckland’s new playgrounds, Princes Wharf and the Viaduct Basin, Mr Lu is enthusiastic about the apartment scheme’s potential because of the ability of hotel operator Hyatt to draw on the corporate clientele it has really not had a place for.

“Hyatt Australia has a very strong marketing programme, but corporate clients can’t stay in the Hyatt here, it’s not upmarket enough. At the moment 20% of our bookings are from the Hyatt organisation, but the apartments will give us much better critical mass to attract more.”

Landplan Pacific is project and development manager on the Hyatt Residences, and Mr Lu said the two parties could be involved together again, with Savoy involved in financial arrangements.

But these projects are small compared to some Mr Lu has become involved in overseas.

The Philippines

Savoy Group, the family business through which Mr Lu controls New Zealand listed company Savoy Equities and also through which he has taken interests in overseas ventures (where Savoy Equities may pick up contracts for its staff but has no other significant interest), has become one of five owners of Fil-Estate Group, “probably the second largest property conglomerate after Ayala Group” in the Philippines, with assets exceeding $US1 billion.

Savoy got its minor stake after Fil-Estate was forced into restructuring, along with the rest of Asia after the 1997 crisis. Mr Lu says the group has emerged strongly: “They’re still one of the largest urban developers in the Philippines, one of the largest leisure and entertainment facility developers. They own six golf courses and are one of the largest landbanking, subdivision, ‘horizontal’ [as distinct from tower] developers, mainly residential.”

But it is involved in one major tower, a project very reminiscent of Auckland’s Britomart. This one is a 47-storey apartment block at Pioneer Grand Station, one of the 10 new stations on Manila’s 17km mass transit extension. Fil-Estate has a 16% stake in the mass transit expansion project.

The line was opened in December. By association through the Fil-Estate stake, Mr Lu places himself in good company, although the project was well under way before he bought in. The mass transit extension is a $US700 million scheme using $US470 million of debt from Mitsubishi, with Sumitomo as contractor.

“Savoy Equities has a full-time team, led by our investment banking team, working in Manila on a retainer and success fee basis,” Mr Lu said.

There is plenty of work to be done. That one station, with 400 underground carparks and a 55,000m² residential tower in Manila’s cbd, is bigger than Auckland’s Britomart was to be.

BW Resources casino

A second Philippines project for Savoy is its investment in gambling and entertainment business BW Resources, headed by Macau’s Stanley Ho, with local partners. Mr Lu was initially chairman when he became involved last August, just after the period in which sharemarket investigators are looking at share price manipulation, but is now deputy chairman.

“We’re reassessing that investment at the moment because it’s too high-profile for us. We’re not involved in management at all at BW Resources, but at Fil-Estate we’re actively involved in management. We have another company, Armstrong Holdings, a listed technology investor, and I’m chairman.”

It is hard to establish Mr Lu’s role in these ventures, if only because of distance.

Hong Kong takeover

In one, though, he has a clear leadership role, and that is Team Concepts, a struggling Hong Kong consumer electronics research, development and manufacturing company which two years ago was penalised by the Business Software Alliance for pirating.

“We’re restructuring the manufacturing business but extending the technology. It has a very strong market position as the world’s second largest electronic learning aids company.

“From 15 March I’ll be the new chairman. I’ll taken a70% shareholding in the company. I’m putting $HK100 million ($NZ25 million) into it through Savoy TC Ltd, registered in the British Virgin Islands.”

Team Concepts was formed in 1978, listed in Hong Kong in 1991, specialises in interreactive toys for ages four to seven and, Mr Lu said, is one of the best researcher in voice-recognition phones. In that field, British Telecom is one of its best customers.

For the failed Britomart project, the team put together to do it came largely from outside Auckland. Development backers were mostly Asian, construction was Germany through Australia and design was Australia. The locals ground them down.

But, as he flits about Asia, Mr Lu recognises that “it’s all relationships. The former partners in Team Concepts said they wanted to transform the company, they knew about my ability, and I want to push something forward.They’ve sold down from 75% to 23%, and since I went in the share price has gone up from 18c to 45-50c. It’s an old sleepy company that needed a bit of momentum,” he said.

“I have many businesses but most are passive investments. At any time I’ll be driving maybe one or two. That’s why I’m upset about New Zealand. I took ownership of Britomart and it cost 3½ years of my time. It got me involved in an environment beyond my control, a football, I got kicked around.

“As long as the project was alive, I was driving it. I’m not interested now, no matter how good the terms are. I lose on projects all the time. I also win, oh yes. That’s my business. I’m an investor, entrepreneur, I take risks, divest. I’ve been very aggressive. Everything I go in, I have a strategy , and if my strategy doesn’t work I get out.”

Mr Lu said he would like to continue living in New Zealand and enjoys working here. “But I can’t afford to stay here for too long — the business is over there. I’m trying to provide management services from here to the businesses in Asia.

“Once we get out of Britomart, we start looking for opportunities and growing the business. But the loss of Britomart isn’t just what’s happened. It’s credibility, perception.”

In the High Court in Auckland over the past three weeks, Mr Lu has been fighting another credibility battle before Justice Fisher, this one with the Malaysian investors who took over SmarTel NZ from him in 1997, a dispute involving options, numerous agreements, and allegations by Lu that the buyers conspired to defeat agreements so they could take control at a far better price. That hearing should end this week with a reserved decision.

Savoy enters fresh ventures
Savoy Equities, still weighed down by unresolved Britomart issues, is working hard at being a bouncy, lively investment company. Its share price remains in penny dreadful territory at 7c, but since the Auckland City Council put an end last year to the major Britomart bus terminal redevelopment in which Savoy was to play a key role, the company has advanced on two separate ventures.
One is an e-commerce venture and the other a large property exercise, developing the large site in front of the Hyatt Regency Hotel on the edge of Auckland’s cbd (the model is pictured below).
The listed company’s chairman, lawyer Judith Collins, told the annual meeting yesterday that Savoy’s claim against the city council for “very substantial damages” should be lodged in the next two months. She would not reveal details or the amount of the claim.
That issue affects Savoy’s balance sheet, which has the rights to acquire land and development entitlements at Britomart, in downtown Auckland, on its books at the directors’ valuation of $70.8 million. Take that away and Savoy’s net assets come to only $10 million. The company’s $92 million of share capital includes $59.6 million of redeemable shares taken up by director Jihong Lu (pictured above) and the lineup of Asian partners he found to support his bid for Britomart, and those shares could be redeemed for just $100 of no return emerges from the Britomart quagmire.
While doubts remain over all these matters, auditors Deloitte Touche Tohmatsu have scored their annual audit report with a “fundamental uncertainty” warning, though they have also recorded an unqualified opinion that proper accounting records have been kept.
The e-commerce venture was announced ahead of the annual meeting, a 70% stake in Safety Net (NZ) taken by a Savoy subsidiary, Savoy Technologies. Safety Net provides mainly wireless internet and virtual private networks to commercial clients in Auckland, Wellington and Christchurch’s cbds.

The Hyatt venture, unlike the long-running and unsuccessful Britomart saga, should prove in a fortnight to be a real exercise in property development. Savoy and Hudson Group of Australia entered a joint venture last year to buy the Hyatt for about $40 million, getting a 273-room hotel on 5800sqm, 5200sqm of development land, the four-storey Princes Court and, at the foot of the site on Eden Cres, the nine-unit Eden Hall building, which has an historic classification.
Savoy has created a display suite in the Princes Court office building, showing a one-bedroom unit with a large lounge and a neighbouring small unit with potential for them to be linked.
Savoy proposes to slot a 20-storey serviced apartment tower between the Hyatt and Princes Court, on Princes St but with views north-west and north-east towards the Waitakeres and Coromandel. Mr Lu said resource consent for the project should be granted in two or three weeks, but was wary about being definite given the drawn-out procedure of Britomart.
Bayleys will pick up the marketing job at that stage, offering 108 units in the Hyatt Residences. The design shows 87 serviced apartments on 11 floors, 12 sub-penthouses on two floors and nine two-level penthouses. Prices (all excluding gst, which depends on whether they are owner-occupied or part of the serviced pool) are expected to range from $162,500 for a 40sqm studio on level 3 to $565,000 for a 110sqm two-bedroom sub-penthouse. The penthouses have been priced from $520,000 to $820,000. Investors will be offered an 8.5 % return for three years. Ex-gst prices range from $3500 to $5000/sqm, which makes the project competitive in the five-star market.
Hyatt has renewed its contract on the hotel for 10 years from 2003, and although some of the hotel rooms will have their views blocked by the new building, the hotel operator stands to gain from the development because all apartments in the serviced pool will be managed by the hotel company. The hotel ballroom and associated facilities will also be enlarged, a pool, tennis court and health spa facilities are part of the design and the site will get about 100 more parking spaces.
Savoy Properties chief executive John Dalzell said financial options were still being considered. They include traditional project funding and ‘”some more innovative structures. We don’t need to make a decision on that for some time.”
Previous hotel owner Otaka International had hoped to remove the category B historic places rating on Eden Hall, which seriously diminishes the value of the site, and Savoy has an application in to remove the protection. But Mr Dalzell said “we’d like to think we can come to some arrangement with the city council. As everyone knows, to refurbish a heritage building is not cheap and not particularly economical.”
The company wants to start work on the apartments site in May for completion next November.

Hyatt Regency general manager Uli Hoppe said the hotel, opened in 1968 as the Inter-Continental, had not been able to offer some of the facilities the chain’s international corporate customers expected and the Hyatt Regency would rectify that.
“We’re definitely aiming at the convention market, having one of the largest facilities in the city,”he said.
He expects room rates in the apartments to compare with those at Quay West, which was top of the range until the Metropolis Somerset Grand opened in December.
Like all Auckland’s hotels, the Hyatt Regency has been at 100% occupancy through the America’s Cup period, up from its average 75%, which is a high level in any case. But once the cup racing is over, Mr Hoppe warned: “There will be a rate war going on in Auckland during the winter months.”

Savoy close to filing case against council

Savoy Group has not dropped its $100 million-plus court case against the Auckland City Council over failure of the Britomart redevelopment project, although it is behind schedule in filing its claim with the High Court.

Kerry Haycock, managing director of the group’s New Zealand listed company, Savoy Equities, said this week the statement of claim was in its final draft and should be filed “in a week or two. All the work is pretty well complete.”

Meanwhile, Mr Haycock hopes to see a resource consent in the same timeframe for the group’s Hyatt apartments project, which would enable a start on that in the second half of June.

Savoy has been working on its claim against the council for several months. It alleges breach of contract, damages for costs, loss of potential earnings and conspiracy among councillors “to achieve a certain outcome. That outcome injured us,” Mr Haycock said.

Pacific Capital Assets, under the control of Savoy director Jihong Lu, listed in 1997 with the Britomart redevelopment scheme as its first infrastructure venture. The second call on Pacific Capital’s shares would have fallen due in a few weeks, but the consent process dragged on and, with an anti-Britomart majority elected to the council in late 1998, the project was ended last year.

The $125 million of underground transport centre and parking floors would be close to completion if work had started as envisaged in 1997. Instead, the city council has a design competition under way for a new version of the project.

Savoy’s main gains from Britomart would have come from above-ground construction on the 11 development footprints.

Hyatt project progressing

Without that project, Mr Lu has concentrated his energies overseas, with ventures in the Philippines and Hong Kong, but success with the Hyatt project would give the group some credibility locally.

Savoy and Australian associate Hudson Group entered a joint venture last year to buy the Hyatt for about $40 million, getting a 273-room hotel on 5800sqm, 5200sqm of development land, the four-storey Princes Court office building and, at the foot of the site on Eden Cres, the nine-unit Eden Hall flats, which have an historic classification.

Savoy proposes to slot a 20-storey serviced apartment tower between the hotel and Princes Court, on Princes St but with views north-west and north-east towards the Waitakeres and Coromandel. The 108-unit Hyatt Residences design shows 87 serviced apartments on 11 floors, 12 sub-penthouses on two floors and nine two-level penthouses.

Prices (all excluding gst, which depends on whether they are owner-occupied or part of the serviced pool) are expected to range from $162,500 for a 40m² studio on level 3 to $565,000 for a 110m² two-bedroom sub-penthouse.

The penthouses have been priced from $520,000 to $820,000. Investors will be offered an 8.5 % return for three years. Ex-gst prices range from $3500 to $5000/m², which makes the project competitive in the five-star market.

111 upmarket units with 8.5% return guarantee

Bayleys launches the Hyatt Residences apartment project in Singapore on Friday ahead of the project’s weekend launch in Auckland.

At a time when the serviced apartment market is under pressure, and managers of at least five buildings in New Zealand and Queensland have been unable to maintain rental guarantees, the developers of the Hyatt Residences are promoting it with an 8.5% net return guaranteed for the first three years, with a forecast of better returns after that.

The confidence comes largely from the relationship with the Hyatt. The 17-storey block of 111 apartments (at right in picture of model) will be built by a Hudson Savoy joint venture, adjoining the Hyatt Regency Hotel with frontage on Princes St. The hotel will gain extra facilities, including a health club, pool and new ballroom facilities, and Hyatt will operate rooms in the serviced pool.

It is Hyatt’s first venture into managing strata titles anywhere. The big question will be how much of the business market will be attracted to a hotel complex which previously had been unable to offer the class of accommodation the Hyatt brand is known for internationally.

The Hyatt brand is expected to be an attraction for Singaporean buyers — the Bayleys promotion there by Dinah Macky and Sue Stanaway will be at the Grand Hyatt on Scotts Rd — and the chain’s international marketing expertise is proving valuable, providing 30% of bookings.

Jihong Lu’s private Savoy interests and Australian-listed Hudson Investment Group settled the $40 million purchase of the Auckland Hyatt Regency and adjoining land last August, then sold 47.5% to New Zealand-listed Savoy Equities.

The Hyatt has 273 rooms, recently refurbished for $10 million. The transaction priced them at about $120,000 each. The apartment block and extra facilities will be built on the 5200m² of adjoining development land, valued at about $7 million, or $1350/m², which in city terms is cheap.

That has helped make the Hyatt Residences very competitively priced. Among recent apartment and serviced-apartment developments, the Metropolis is clear price leader at around $6350/m² overall average price, net of furniture and parking.

In the next pack, The Hyatt on $4575/m² ranks behind two Hobson St competitors, the Heritage Grand on about $5060 and the Heritage Auckland around $4845. The troubled Parklands Apartments on Greys Ave ranked with the Heritage Grand, while the Park Central up Queen St, run by Quest NZ (in which Gary McNabb of Allfields recently took a 50% interest) ranked with the Heritage Auckland.

The Hyatt Residences will rank well below all of those, and CityLife, for studios at an average $4300/m², although it will have only 13 of them.

In the big market, for one-bedroom units, the Hyatt units are priced around $4200/m², the average, slightly above CityLife but behind the other five above. In that category, Phoenix Gardens units were priced around $3230/m². For two bedrooms, the Hyatt has been priced just below average at $3875/m², level-pegging with Tower Hill, far behind the Heritages and CityLife (ranging from $4400/m² to $4840/m²) and Metropolis at $6460/m².

Starting prices (ex gst and furniture packages) are $160,000 for the third-floor 37m² studio to $400,000 for the larger of the two-bedroom units on that floor, containing 103m². Four of the two-storey penthouse units on the 16th and 17th levels have been taken, leaving a 147m² three-bedroom unit as the top of the available range at $860,000.

Share consolidation pending, full-year profit forecast

Savoy Equities doubled revenue, halved its half-year deficit to $2.6 million and said it was still on track for a $5 million profit for the whole year, helped by its increased focus on the technology sector.

The bottom line improved from a $5 million deficit in 1999 to a $1.76 million deficit.

Savoy, which was to be the Britomart developer and now has the Hyatt Residences project in the market, also intends to make a $45 million private placement over the next three months and consolidate its capital base on a 1:10 basis to cut shares on issue to 56 million.

Net assets $250,000 after complicated series of transactions

Savoy Equities Ltd’s shareholders approved a resolution at the annual meeting on Friday to issue up to 25 million redeemable preference shares, as part of agreements with various shareholders to restructure the company’s remaining debt.

To preserve existing shareholders’ positions and simplify future transactions for Savoy Equities, the company will issue all the shares in Savoy Properties Ltd to Savoy Equities’ shareholders, pro rata.

Savoy Equities also proposes a renounceable 1:1 cash issue at 0.5c/share, to raise up to $291,690. The rights won’t be quoted on the stock exchange, and any shortfall may be allocated by the directors.

The company said that after various transactions, including forgiving of debt, net assets would be $250,000.

Update, 8 September 2002: Savoy Equities Ltd has decided not to seek listing for its rights issue. Allotment has been set back a week to 23 October.

Savoy working with litigation funders on Britomart claim

Rights issue announced after small profit

Listed penny dreadful Savoy Equities Ltd’s former subsidiary, Savoy Properties Ltd, has commissioned independent queen’s counsel opinion for litigation funders interested in pursuing its claim against Auckland City Council for cancelling its Britomart project in 1999.

Through a distribution of all the shares in the relevant subsidiary, Savoy Properties Ltd, and its group of companies, Savoy Equities shareholders will have an interest in the possible litigation only through their direct Savoy Properties shares.

Savoy Equities completed the in-specie distribution of all the shares in Savoy Properties & group, on a pro-rata basis on 25 July by the allotment to all shareholders on the Savoy Equities share register on 19 July.

The distribution keeps alive Savoy Properties Ltd’s claim against the council over the cancellation of the Britomart project which preceded the present smaller-scale redevelopment, and will enable the substantial Savoy Properties group tax losses not to be affected by future issuance or dealing in Savoy Equities shares.

Savoy Equities made an operating profit of $159,000 on revenue of $333,000 in the June half, compared to a $333,000 loss on $15,000 of revenue a year earlier. Earnings/share were 2.71c, compared to a 5.71c loss.

The half-year profit resulted after Savoy reached a compromise with creditors in June. The company issued just under 7 million redeemable preference shares at 2c/share to creditors on 30 August, in payment of debt of $139,806, as approved at the annual meeting in June

The approval allowed the issue of up to 25 million redeemable preference shares at no less than 2c/share before 28 September 2002. If they’re not redeemed for cash before 30 June 2004 they will convert to ordinary shares on the basis of 5 ordinary shares for every 4 preference shares.

The company is still looking at businesses to back into Savoy. It announced a renounceable rights issue at 0.5c/share, record date 13 September, allotment 16 October.

Britomart contingency finally excised

Savoy Equities Ltd finally knocked out the $70.8 million contingent earnings from Britomart in its result for the year to December, which must now be recouped from an unlikely litigation success against Auckland City Council for cancelling the development agreement with the Savoy group.

The result was delivered to the stock exchange late — on Friday, after being due a fortnight earlier — and that resulted in Savoy shares’ suspension from trading.

But the cursory result announcement shows there’s not much left as a basis for trading. It also showed how you can produce completely meaningless comparisons — the “previous period” figures are for only four months, 1 September to 31 December 1999, after the company changed its balance date from 31 August.

Savoy had operating revenue of $16 million in the year to December 2000, on which it achieved a $7.7 million deficit before unusuals and tax.

The bottom line was a $77.1 million deficit. As well as losing the Britomart project in 1999, Savoy’s brief tenure of an interest in the Hyatt Regency Auckland hotel through Hudson Savoy Holdings Ltd ended last November. Savoy took shares in Australian listed company Hudson Pacific Group Ltd in exchange for the interest in the hotel and adjoining development site, but is now selling those shares. It got a stock exchange waiver to do so, because of the fall in value of Hudson Pacific stock.

Pursuing Britomart claim depends on finding litigation funds

Savoy Equities Ltd chairman Garry Wells opened the company’s annual meeting on Friday by dryly reporting a proxy statement. Shares: “834 too many.” Proxy: “What have you clowns been up to?”

Mr Wells declared the shareholder’s proxy invalid. From the podium in a room with one of Auckland’s more spectacular views — the top of the Town restaurant in the Hyatt Regency Hotel — he went on to outline the company’s parlous state.

Grim news, but the chairman — reappointed to the board on 23 May, when the company wasn’t listed because it had too few directors — wasn’t about to start crying, though the company’s performance has probably made a few hopeful shareholders shed some tears.

Mr Wells mentioned the sale of Dairy Brands at 32c/share, just before the dollar fell in value, the entertainment of an idea that it could supply yoghurt to KFC throughout Asia, but with no contracts in place, and the subsequent move of Savoy into the electronics sector.

Just $519,000 left in the kitty

The outcome of Savoy’s writeoff of $71.65 million on the Britomart venture, and these other lesser misadventures, is that Savoy had just $519,000 of net assets at its December 2000 balance date.

The company depends on shareholder support and its assets have been valued on the basis of net realisable value, not a going-concern basis.

Said Mr Wells: “We see no reason why the shares have traded in the past fortnight at 20c, at least 20 times above their current asset backing [0.89c/share].”

The glimmer of light for the 2863 shareholders is that directors will find a way to sue the Auckland City Council for canning the Britomart project in which Savoy companies had major roles, in November 1999, and then succeeding in this litigation.

Company might issue shares to take court action

“The company believes it has a substantial valid claim against the council. We have held back until we have finalised funding arrangements. Funding required will be substantial,” Mr Wells said. “The directors are considering issuing shares if it decides to proceed against the city council,” he added.

The position will be clarified in the next fortnight by the half-year report, but without equity input Savoy has only four months’ shelflife left.

“We would be looking to do something in the way of an issue before that time. We’re looking for limited-risk ways of pursuing that option [suing the council],” chief executive Kerry Haycock said.

Mr Wells added later that Savoy was not talking of any particular option yet. But law firm Rudd Watts & Stone had produced a draft statement of claim which could be served on the council. “We’re looking at how we handle that advice.”

Like fighting a pig in mud

One shareholder issued a warning: “Arguing with a bureaucrat is a bit like fighting with a pig in the mud. After a while you realise the pig is enjoying it.”

And there was another piece of advice, this time to the board from advisors on the morning of the annual meeting. Mr Wells said they had been told “you’re better if you place your principles in front of the council initially rather than your quantum.”

Most of the rest of the meeting was concerned with answering questions posed by the Independent newspaper, whose editor and business editor, Warren Berryman & Jenny McManus, turned up as holders of 100 shares.

They had to be prompted to ask their questions, which Ms McManus had hoped somebody else would ask. Mr Wells told the meeting the board had prepared answers to all the newspaper’s questions, and he and Mr Haycock set about answering them.

Many of the questions related to former chief executive Jihong Lu, who was adjudicated bankrupt in November 2000, but whose family interests retain shareholdings in Savoy Equities. He was not at the meeting. The directors said they would not comment on matters relating to former directors, but indirectly did make some comments.

One concerned the leased company BMW Mr Lu had been driving, which Mr Haycock said he was no longer driving. But Mr Wells said none of the four leased cars had been returned, because the cost of returning cars early in the lease period was significant.

And while this debate was going on, at the foot of the building part of the basement floor was being demolished for a project in which Savoy had been a player — the Hyatt Residences apartment project. The company sold its interest in Hudson NZ Ltd to the Hudson group of Australia, which is carrying out the project.

Savoy still looking at litigation over Britomart

Work starts on Hyatt Residences project

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