Banking

Home REIT faces claims by investors over ‘misleading’ social impact strategy

Law firm Harcus Parker is seeking compensation for investors for significant losses on their investments following the trust’s share price plunge of more than 50% year to date and exit from the FTSE 250

This comes after last month short-seller Viceroy Research raised doubts about tenants’ ability to pay rent, the prices Home REIT paid for some of its houses and the structure which determines how much the fund managers receive in fees.

The law firm said that the trust positions itself as a vehicle to deliver a positive social impact with an investment strategy to “exclusively tackle homelessness”, but argued that it has used investors’ money in a way which is inconsistent to what they were told.

Home REIT shares plunge after short-seller criticism

According to the firm’s research, some of the trust’s underlying properties are being advertised for people who are not vulnerable or in need of care, and would not qualify for exempt accommodation under the housing benefit rules.

Harcus Parker plans to argue that Home REIT did not invest the proceeds from its fundraising rounds in accordance with its investment objective and policy and that investors overpaid for their shares. 

Lawyers also argue that the trust’s property portfolio is vastly overvalued, given that the company’s business strategy and the security of its revenue stream is dramatically different from what investors were told.

“Companies that are profiteering from the social housing crisis at the expense of the vulnerable and homeless should be held to account,” said Jenny Morrissey, partner at Harcus Parker. 

The firm said it has spent months investigating and analysing information available in the public domain about Home REIT, and that what it has seen is “troubling” for its investors, which includes impact funds, pension funds and charities. 

Home REIT delays release of annual results after short-seller backlash

“There is much concern among them about what Home REIT has been doing, as well as how this has affected people’s investments in the company,” Morrissey said.  

“The significant drop in the share price provides stark evidence as to the loss suffered by investors, and we are therefore in a position to bring a claim on behalf of shareholders who have suffered damage.”

Home REIT is facing calls to replace its leadership team from activist shareholder The Boatman Capital Research in the wake of last month’s short seller attack. 

In an open letter on Monday (5 December) addressed to Home REIT director Simon Moore, the firm detailed a number of issues, including claims the landlord inflated the value of its property portfolio and failed to undertake appropriate due diligence on some of its tenants.

Home REIT representatives have been contacted for comment.

Most Related Links :
Daily News Era Latest News Sports News Finance News Automobile News

Root link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button