Embattled investment trust Home Reit has been issued with a suspension notice by FTSE Russell.
With the trust now placed ‘on notice’, it will be removed from FTSE indexes if its shares remain suspended for a further 20 business days. Home Reit currently belongs to the FTSE Small Cap and Global Small Cap universes.
The trust’s shares were initially suspended on 3 January after it was unable to publish its year-end results. This was due to enhanced auditing procedures carried out inresponse to shareholder concerns over how strictly it was adhering to its stated investment philosophy.
On 19 January, Home Reit further delayed its results as the audit would not complete before the end of January. The firm’s AGM is set for 20 February.
The notice follows a City AM report on 27 January that Home Reit’s property deals were set to be examined by the National Crime Agency. The trust has also begun an internal inquiry into payments made to a third party as part of deals for rundown housing stock for which the trust appears to have overpaid.
The trust, which aims to provide social housing to alleviate homelessness while seeking returns for shareholders, came under scrutiny during the final months of 2022 over concerns regarding its viability.
It faced allegations from Viceroy Research in November, which accused the firm of investing in “bad assets”.
In the November report, Viceroy said: “We strongly believe that [Home Reit] are not the people who should be entrusted to look after the vulnerable, nor should they be entrusted with your taxes to do so.”
The trust rejected the allegations.
Home Reit has also experienced rent collection issues in recent times. On 25 January, Home Reit announced that one of its main tenants, Lotus Sanctuary, had not paid rent since August.
Portfolio Adviser has contacted Home Reit for a response.
