In documents submitted to court and seen by Infrastructure Investor, AustralianSuper – one of Australia’s largest superannuation funds – has accused the Australian government’s Future Fund of engaging in “misleading or deceptive conduct”.
The claim relates to the purchase by the A$98 billion Future Fund of a 29.7 percent stake in Perth Airport in 2012 from Australian Infrastructure Fund (AIX) for A$875 million (€602 million; $819 million). AustralianSuper claims that the price paid was artificially high in order to discourage other shareholders from exercising their pre-emption rights.
AustralianSuper claims it was thereby prevented from raising its stake in the asset by 10 percent, from 5 percent to 15 percent. It also refers to an independent valuation carried out by Grant Samuel & Associates which valued the Perth Airport interest in the range of A$672 million and A$747 million on 7 December 2012.
However, in its defence, Future Fund claims that a report by Jason Peasley, AustralianSuper’s head of infrastructure, and investment analyst Matthew Fidge, concluded that – among other things – the price allocated by Future Fund to the Perth Airport stake represented a “commercial view on value” and was based on “achievable operational and financial assumptions”.
Future Fund also claims that the report concluded that the price paid was A$19 million less than the AustralianSuper portfolio team’s “high case” valuation of A$894 million for the stake.
Future Fund alleges that AustralianSuper “did not have any reasonable prospect” of acquiring the additional 10 percent stake it wanted by the exercise of pre-emption rights and that, around February 2013, it “decided to pursue a commercial solution to achieve the desired commercial outcome by use of a “legal strategy” and/or engaging with AIX and Future Fund in a “commercial dialog”.”
Future Fund also refers to a letter sent from AustralianSuper’s solicitors to AIX and Future Fund on 25 February 2013 which allegedly says that AustralianSuper had taken legal advice and concluded that any “legal issues are with AIX and not Future Fund”.
The case, which is being held at the Supreme Court of Victoria in Melbourne, now goes to a direction hearing on 18 July. This is expected to set a date for trial sometime between the latter part of this year and early next year.