Elders is pushing ahead with the sale of its timber managed investment schemes to US private equity major KKR, sparking anger among investors who say they are getting a raw deal.
The sale to KKR, in partnership with local forestry group Santanol, has been described as a "shotgun wedding" by other interested parties who claim they were locked out of a similar deal.
Elders entered into a transaction with Santanol and KKR in February, having announced its intention to exit the forestry sector in 2011.
The transaction, led by subsidiary Elders Forestry Management Ltd, involves 15 managed investment schemes relating to Indian sandalwood plantations in Kununurra, Western Australia, and is believed to be worth $70 million.
At a meeting to vote on the sale, growers said they were being forced to accept a deal that undervalued their investment. They also expressed doubt over the independence of reports by Deloitte and Finnish forestry specialist Poyry, a Gunns adviser, which assessed the validity of the sale.
"The report says growers should not rely on this information, so how are we supposed to form a view as to whether this is in our best interests?" investor Steve O'Reilly said.
But Elders Forestry's Linda Pickering said every report came with "at least one or two pages of disclaimers".
She also denied accusations that they had ignored other offers to buy the company. "At no time was any other proposal put on the table of Elders Forestry Management Ltd," she said.
Santanol director Tony Jack was responsible for establishing the management schemes under the name Integrated Tree Cropping, or ITC, before selling them to Elders. This has led to accusations that Mr Jack was selling the schemes back to himself at a bargain price.
According to the most recent reports filed with the corporate regulator, EFML owes its parent company $74.2 million.
Investors say they have not received an annual growers report for the plantations since 2010, leading them to worry that the trees may be receiving little or no maintenance.