The Shareholders' Association is pleased a High Court judge is increasing scrutiny of the Pyne Gould Corporation subsidiary, Perpetual Trust.
Perpetual on Thursday froze one of its funds after revelations it lent money to another subsidiary of Pyne Gould led to a run of investors trying to get their money out.
Justice Heath empowered two observers to sit in on Perpetual's board meetings and to investigate details of the $28 million loan made to Torchlight.
He says the observers can request any information from Perpetual Trust, that might help their investigation into the transaction beween Pepertual and Torchlight.
Shareholders' Association chairperson John Hawkins says the appointment of the observers is an unusual move.
He says having independent people will ensure that things will be done by the book.
The judge also ordered independent valuations of the Queenstown and Wanaka properties that have been used as security for the loans.
The Financial Markets Authority has asked that the $28 million be repaid, however $13 million remains outstanding.
Justice Heath said someone will need to answer his questions from the courtroom's witness box if more money isn't forthcoming by the end of the month.
Mr Hawkins says the Shareholders' Association wants the loan thoroughly investigated.
He says are a number of things that the courts and NZX can do if the law has been broken, or if there have been issues around disclosure.
"We would expect in this case, which we see as quite an egregious case, that the matter will be pursued regardless of whether or not $13 million is repaid.
"I'm pretty hopeful that the investors won't lose any money on this but we don't really have enough information to be certain on that".
Mr Hawkins says the directors of Perpetual Trust need to act independently of Pyne Gould's managing director, George Kerr.
He says they are required to act in the interests of all the investors.