Shareholders in property company Dunloe Ewart spent more than an hour yesterday closely questioning chairman Mr Noel Smyth on the board's plans to take the company private.

Several shareholders told the firm's annual general meeting in Dublin that they were disappointed with the current 37p per share offer by the company. Some suggested this did not reflect its actual value and said they would prefer a rights issue as a means of raising funding.

The plan to take the company private was announced a few weeks ago following a strategic review prompted by a lack of interest in small-cap shares among financial institutions. Shareholders are scheduled to vote on the plan at an e.g.m. within the next three months. A company proposal to pay 10p of the 37p share value after disposing of certain assets - a process which could take up to three years - was the subject of strong objections by some shareholders on the grounds that the company would benefit from interest accrued during this period while shareholders would not.

One shareholder said this was a "derisory and opportunistic offer". He said the company was treating shareholders like bankers by asking them to lend money to the company.

A proposal by another shareholder that the board should make the offer more attractive prompted spontaneous applause from the floor.

However, Mr Smyth said the company needed £35 to £40 million in cash to keep running this year and some £100 million over the next five years. While he would bear shareholder criticisms in mind, the current offer was the only one the company could afford, he added.

He said that being in the euro zone had changed the attitudes of fund managers, who were not interested in small-cap companies any more. The only alternative to going private was a second rights issue, which might not be a success.

Mr Smyth told shareholders that the company had in the last six months unsuccessfully approached several property groups with a view to merging or being taken over. He said Green Property had rejected a deal with Dunloe Ewart, as it would have meant issuing more shares. A German property group and UK property company MEPC had also both rejected tie-ups with Dunloe Ewart.

Several shareholders responded by asking if the company would consider selling some of its property portfolio. Mr Smyth said this would mean selling sites without planning and zoning preparation, akin to selling the family silver.

Earlier, after a reading of the annual accounts, one shareholder questioned some A2 million paid by Dunloe Ewart to companies with connections to the Smyth family. He called on the company to make a statement on these payments at the a.g.m next year.

Last year, Noel Smyth & Partners received some A1,075,923 in legal fees, almost twice the figure for 1998. Other contracts involving members of the Smyth family and Dunloe Ewart last year included the production of a corporate video at a cost of A55,915 by Mr Mike Smyth, a brother of Mr Noel Smyth. Another company, O'Muire Smyth, of which another brother, Mr John Smyth, is a partner, was awarded a contract worth some A820,557 to supply architectural and project management services to the group