The chairman of Kermadec Property Fund is defending a $7 million plan to internalise its management contract and acquire the Augusta Funds Management business.
The deal has been criticised by the Shareholders Association, which says it will vote against it through undirected proxies at Wednesday's shareholders meeting.
Kermadec, which owns five commercial properties worth $100 million, is run by managing director Mark Francis and his brother Chris, an executive director.
The plan is to internalise its management by buying the assets of its manager, Augusta Funds Management, with money it plans to borrow.
As Augusta is owned by the Francis brothers, that makes them the main beneficiaries of the deal.
An independent report from PWC says it would be marginally beneficial to Kermadec.
But Shareholders Association chairman John Hawkins says many shareholders are concerned about the brothers' involvement, and the purchase price-to-earnings multiple of about 10 times is excessive.
Kermadec chairman Peter Wilson says however that no shareholders have raised concerns with the board, which backs the deal.
Shares in Kermadec Property Fund are unchanged at 64c.