Media Release - Issued 31 October, 2000

Investors' Association Leads Sundowner Shareholder Revolt

The Australian Investors' Association (AIA) has lodged forms signed by almost 200 Shareholders and Unitholders of the grossly underperforming Sundowner Motels Trust calling for an extraordinary general meeting to replace all of the current directors. The responsible entity is also to be replaced, if this shareholder revolt is successful.

The AIA has used the 100 Shareholder Rule which the federal government recently tried to scrap by Regulation. Indeed, the AIA was in the midst of planning this shareholder revolt when the minister quietly regulated away the 100 Shareholder Rule. Fortunately for the Sundowner unitholders, the regulatory change was rejected by the combined votes of Labor, the Democrats, the Greens and the Independents in the Senate.

"Even in a small trust with only 2,400 unitholders it was difficult to give an effective voice to the ordinary shareholders", said Mr Ray Bricknell, National President of the Australian Investors' Association. "In order to sack the Responsible Entity the AIA had to first find another to sign a document agreeing to take on the job. None of the institutions who normally do such work were prepared to be seen rocking the boat, presumably for fear of upsetting the big end of town".

The call for the EGM has proceeded in spite of the fact that the current directors have been furiously trying to find someone to offer to 'restructure' the Sundowner group. Grant Samuel Corporate Finance has been shopping the market for proposals. The AIA is concerned that 'restructuring' may mean little more than the buying out of the current management company, which is 100 percent owned by the original promoters of Sundowner. "Those same promoters still retain ownership of the Sundowner brand, even though it has been established in the marketplace using Unitholders' money", said Mr Bricknell. "They deserve to be sacked, not bought out, and the management agreement gives the Sundowner board that right".

"The AIA is of the view that the restructuring proposal which the Sundowner board now has ready for presentation to the unitholders should be considered by a completely fresh group of directors before the unitholders are asked to vote on it", Mr Bricknell said. "Even the independent, non-executive directors on the present Sundowner board were initially appointed by the original promoters of the motels trust."

Note:
Some Councillors and members of the AIA hold units and stapled securities in the Sundowner trust and stapled company.

For further comment please contact:

AIA Secretariat Telephone: (07) 5564 8626 Facsimile: (07) 5564 8626 E-mail: aia@investors.asn.au