Centuria quashes governance allegations amid fund downgrades

Centuria Capital Group (CNI) has swiftly provided a response to media reports suggesting that its exposure to the Bathla Group, a Sydney-based property constructor and developer, raised questions over its governance, following a downgrade of one of its private credit funds this week.

SQM Research has confirmed the rating for the Centuria Bass Credit Fund (CBCF) has dropped from a high-investment grade (4.0-star) to a non-investment grade (3.25-star) rating but did not disclose the reasoning behind the determination.

The wholesale fund is operated and managed by entities associated with Centuria, and benefits from first mortgage security in respect of six Bathla loan facilities.

"Two are construction loan facilities. One construction loan facility has ongoing construction exposure and that project is substantially complete. The remaining loans are residual stock loans or land loans. All these loan facilities continue to accrue interest," Centuria said in an ASX announcement.

"While CNI is not a unitholder of CBCF, CNI has provided a direct $4.5 million loan facility to a Bathla Group entity. This is the only balance sheet exposure of CNI to the Bathla Group."

Responding to media commentary suggesting "a relationship between Bathla Group and Centuria Bass Credit employee David Stone", the company has denied any potential conflicts of interest, with reasonings of the lending relationship having been ongoing for more than three years, and Stone having only joined the firm in April 2025.

Stone is currently the managing director and co-head of lending at Centuria. He was head of capital at Bathla between May 2024 and April 2025.

"[While] Mr Stone previously worked for a Bathla Group entity for 12 months, he has no ownership interest in, or control over, any Bathla Group entity," Centuria said.

"Stone is not a voting member of the Centuria Bass Credit investment committee and has no voting influence over the approval of any Bathla Group loan facility."

In relation to the rating change of CBCF, Centuria said it will engage constructively with the research house regarding the matters and "seek appropriate clarification and correction where required."

The fund has a net asset value of $272 million and returned 8.76% over the 12 months to June end. It contains 53 first mortgage property debt investments, and 100% of transactions have benefited from the first-mortgage security, the firm said.

Meanwhile, Bathla was earlier this year involved in a separate controversy with another private credit lender Alceon, which has exited its decade-long relationship with the developer in January, according to The Australian.

Defending its position, Bathla said the decision to refinance its loan portfolio with Alceon was made by Bathla for sound commercial reasons and the conclusion of the partnership was not initiated by Alceon.

"Alceon extended its lending with Bathla in mid-2025 and confirmed on numerous occasions that it was comfortable retaining the loans through to project completion," Bathla's statement read.

"We remain in ongoing discussions with Alceon regarding potential future lending and share the view expressed publicly that both parties are open to working together again."