Kerr's Torchlight sells down Heartland stake

Last updated 17:34 17/05/2012

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George Kerr's secretive investment vehicle Torchlight has sold down about 20 per cent of its 12.2 per cent stake in finance group and lender Heartland.

Torchlight Securities, owned by Pyne Gould Corporation, released a substantial security holders notice today saying its stake in Heartland had dropped to 9.78 per cent from 12.19 per cent.

Torchlight Securities sold 9.36 million Heartland shares on-market on Wednesday, it said. Heartland shares were trading around 52 cents that day.

Torchlight's purchase of shares in Heartland in February and March to beef up its stake to 12.19 per cent was controversial. Kerr sold his own stake in Heartland - about 4.8 per cent - around the same time Torchlight was buying, resulting in suggestions it was a related party transaction in which PGC/Torchlight helped fund Kerr's takeover bid of PGC itself.

However, PGC has said it did not buy the Heartland shares from Kerr who now controls 77 per cent of PGC shares through Australasian Equity Partners Fund No1.

Meanwhile, the Financial Markets Authority is inquiring into alleged undisclosed related party transactions at PGC and concerns over management and governance.

The allegations come from PGC's former auditors, KPMG, who quit that role two weeks ago, several days after PGC's managing director John Duncan resigned with immediate effect.

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