QTI tackles The Rock board

Queensland Trustees & Investment will seek to appoint two of its own directors to the board of The Rock, and to remove two long-standing directors of the building society.

QTI notified The Rock of the proposed resolution yesterday and also began publicising its campaign for change.

The investment firm proposes to appoint its own managing director, Michael Hackett, and one of its non-executive directors, Kerry Daly, to the board of The Rock. Daly was managing director of The Rock for eight years until 2000.

They want shareholders to remove John Maxwell, who served on the board for 34 years, and Bradford Beasley, a director of 10 years whose law firm undertakes extensive legal work for The Rock.

In a letter to shareholders of The Rock, QTI assert that The Rock needs to raise capital simply to pay the final dividend for 2009.

QTI had previously offered to underwrite a dividend reinvestment plan for The Rock but was rebuffed.

In separate letters to Tim Kendall of DBO Kendalls, and The Rock's auditor, QTI query a number of accounting anomalies.

This includes the wrong treatment of  investment in a new core banking system and the continually revised treatment of the $4 million investment in the Quartz collateralised debt obligation that The Rock treats as a performing asset and which arguably needs to be marked to market, wiping out all of the 2009 profit of The Rock.