Trustees of RTE employees' superannuation scheme bring case over 'outstanding investment of €19m'
The trustees of the RTE employees' defined benefit pension scheme have brought a Commercial Court case over a property investment fund.
The RTE Superannuation (RTESA) scheme has taken the proceedings against the investment manager and the trustee of a property investment fund aimed at redeeming what it claims is its outstanding investment of more than €19m.
It concerns an investment fund called the Davy Property Fund, a sub fund of the Davy Property Trust.
In its action, RTESA claims Advance Fund Management (AFM) and BNY Mellon Trust Company Ltd have wrongfully refused to redeem the investment in full as expeditiously as possible. The defendants also continue to retain control of more than €19m of RTESA's funds, it is claimed.
AFM is the manager of the trust, while BNY Mellon is the trustee of the trust.
RTESA sought redemption of the monies in late 2014 and says there is no bona fide or objective justification for refusing to repay this money.
RTESA says the defendants established a new sub-fund in the trust in order to obtain control of the trust for the J&E Davy Group. RTESA also says trust deeds, documents and accounts were also withheld from it.
Trust powers were also exercised by the defendants in the interests of the J&E Davy Group rather than in there interests of the fund's beneficiaries, it says.
RTESA say this amounts to a breach of contract, breach of trust and breaches of fiduciary duty by the defendants.
The matter came before Mr Justice Brian McGovern who admitted the case to commercial division of the High Court on consent between the parties.
Conor Hayes, chairman of the board of trustees, said in an affidavit that in January 2014 the J&E Davy Group acquired AFM and took over the management of the fund.
He said the defendants then amended the trust deeds to establish a new sub-fund in the trust.
RTESA believes investors, who were awarded some 75 per cent voting rights in the trust were connected to AFM.
This, he said, deprived RTESA of its control of the trust and the ability to remove AFM as manager.
RTESA lost trust and confidence in the defendants and served notice seeking to redeem its full investment in November 2014.
While some of the money has been paid, the portion that has been redeemed has been very low and more than €19.5m remains outstanding, Mr Hayes added.
RTESA wants the court to declare the fund manager created a conflict between its duties in relation to the Davy Property Trust and its own interests and the interests of related companies.
It also wants a declaration that there was a failure to disclose that conflict, exercised its discretion and powers for ulterior purposes, acted in its own interests, and gained an unauthorised benefit from its fiduciary position as investment manager.