17 May 1999

Dear Fellow Unitholder:

You will have received a letter from the Trustee recently (22 April 1999), which informed you that unitholders have been provided with a final report on the collapse of the Trust.  But this final report isn’t particularly useful — indeed it seems more of an attempt to fob off the victims of what Mr Frank Pearson (in his 20 June, 1999 Sunday Times column) has rather accurately described as a "wretched venture."  The perpetrators no doubt hope this is the end of the matter — but we would like to see a different conclusion.

Despite the Serious Fraud Office investigations of the activities of the Trust and Manager, the explanations for the collapse so far given to us unitholders seem simplistic.  We feel we should be given the opportunity to question the Manager and the Trustee in more detail — there are certain anomalies that look suspiciously like breaches of commercial law.  If they are, then they should be pursued further.

The Trustee has informed unitholders that there are no funds available to pay costs of a special meeting.  This doesn’t matter: the Unit Trust Act states they are legally bound to hold a meeting if requested — now would be an excellent time.  There has never been an AGM of unitholders.  If we don’t hold one now, we will likely never get another chance.

To help us co-ordinate the matter, could you please split the two forms below and return one to us and send the other on to the Trustee?  Even if you no longer own units, perhaps you can still join in legal action to recover lost funds.  We are collecting names of all interested parties.

Sincerely,
Jeff and Ruth Hatch — ruth@flatrock.org.nz

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Please send to J & R Hatch, P O Box 6741, Wellington or call on (04)-385-1327

UNITHOLDER(S)’ NAME AND ADDRESS:                                            

___________________________________________                    ___________________________________________
___________________________________________

# UNITS IN FLAT ROCK FORESTS TRUST CURRENTLY HELD:

DATE FIRST UNIT ACQUIRED:

EMAIL ADDRESS:

PHONE NUMBER:

SIGNATURE                                           DATE

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Please send to Perpetual Trust Limited, P O Box 3845, Wellington:

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I, ______________________________, of _________________________, being a unitholder of Flat Rock Forests Trust request a special meeting to discuss the COLLAPSE of this venture.

Signed:_________________________  Date: _______________

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