Trikona Advisers (TAL), the erstwhile advisor of UK-based, India-focused real estate company Trikona Trinity Capital Plc (TRC), today said it would claim £112 million (Rs 800 crore) in damages from the latter for “unlawful attempt to terminate’’ the management agreement with it.
TAL said TRC, a London Stock Exchange-listed company, terminated the agreement six years earlier than the scheduled ending. The agreement was for 10 years, from April 16, 2006, it said.
On December 10 last year, TRC announced termination of the portfolio management agreement with TAL, alleging breaches by the latter. In reply, TAL said it would seek substantial damages if the agreement was terminated on March 16, the scheduled date of termination.
TRC has investments in Uppal IT park in Greater Noida, Rustomjee’s township in Mumbai, DB Hospitality and DB Realty, among others.
TAL has already moved the London Court of International Arbitration (LCIA) against TRC. In a press statement, it claimed two hedge funds were responsible for the trouble. According to TAL sources, QVT and Carrousel had forced changes in the TRC board and its representatives now had major positions on it.
“For over two years now, TRC has been under attack from two hedge funds. They took a position in the Fund because of the successful performance and returns created under the management of TAL, but are now seeking an exit,” a spokesperson of TAL said.
“These hedge funds have a track record of activism and for closing down funds early in the cycle to realise cash for short-term gains, and this is what is happening to TRC,’’ the spokesperson added.
TAL cited examples of AIM-listed entities — Treveria plc, the German retail-focused real estate investment company, India’s Hiranandani family’s investment vehicle, Hirco, and South African Property Opportunities — wherein the hedge funds demanded the exit of directors, including incumbent chairmen.
“Our management contract stands in the way of their strategy because it lasts for 10 years, so we are being unfairly treated publicly and falling victim to their strategy,’’ the TAL spokesperson said.
It said it had instructed a number of law firms to invoke its contractual rights, including London law firm SJ Berwin LLP, to pursue TRC. However, TRC seems in no mood to budge.
