The Japanese lender to Australia's pioneer Japanese property trust yesterday pulled back Y800 million ($11.1m) in cash.

The listed Galileo Japan Trust, which owns 26 Japanese properties valued at about $1.25bn, was due to receive the money in the March quarter but its lender Shinsei Bank has retained it.

Galileo chief operating officer Peter Murphy said the bank disagreed with the trust's valuation of its assets and decided to run its own appraisal.

Based on the bank's valuation, Galileo was in breach of its loan to valuation ratio covenant. The bank had taken the cash to reduce Galileo's loan principal.

The Australian