The New Zealand Shareholders' Association says The Warehouse Group has failed to treat small shareholders fairly in its capital raising.
On Thursday, the listed retail group announced it would move into the financial services sector, and planned to carry out a capital-raising of $115 million to support the expansion.
The $100m institutional portion was fully subscribed, with allocations made to 15 institutions and a broad range of high net worth and habitual investors. Shares were priced at $3.23, a significant discount to the company's opening market price of $3.61.
However, just $15m was made available to the company's 10,000 smaller shareholders, which means the offer will probably be scaled back.
NZSA chairman John Hawkins said given there was no urgency and the offer was underwritten, it was hard to understand why The Warehouse chose the structure.
He said the NZSA's preferred method of capital raising was a renounceable rights issue, which would let shareholders participate in proportion to their holding.
Those that were unable or unwilling to take part could trade their rights on market.
The NZSA said since The Warehouse had already committed to a placement, any scaling should be carried out in proportion to each shareholder's original stake.
The Warehouse Group was not immediately available for comment on the concerns.
The group has bought credit card company Diners Club New Zealand for $3m and plans to develop products such as a scheme card, a premium The Warehouse Diners credit card, hire purchase agreements and insurance.