Wellington Capital PIF/Octaviar (MFS) PIF

[great dame]

Re: Octaviar MFS Premium Income Fund PIF

The article appears to have done a vanishing act! I will re post it:::::Wellington faces its WaterlooNick Nichols

September 6th, 2008

ANGRY Premium Income Fund investors are confident they have the numbers to roll Wellington Capital's 'rescue' proposal which goes to a vote in less than two weeks.

Despite Wellington's founder Jenny Hutson revealing this week she had received 97 per cent support from more than 3000 votes counted, PIF Init-iative spokesman Dennis Chapman said large investors still had the numbers to crush the proposal.

The PIF Initiative, a group of investors lobbying against Wellington's plans through an internet campaign, is angry at Wellington's bid to abolish the original responsible entity of the fund -- set up by the defunct MFS (now Octaviar) -- and secure a hefty exit fee in the process.

It also opposes plans to list the fund on the National Stock Exchange.

Mr Chapman said Wellington does not appear to be acting in the best interests of the Premium Income Fund's (PIF) 10,300 investors, many of whom are elderly and have kissed goodbye to the $770 million they invested.

PIF Initiative has approached corporate watchdog, the Australian Securities and Investments Commission, to investigate, although the nature of the investigation has not been disclosed.

ASIC yesterday declined to comment on specific cases.

PIF Initiative also has sought legal opinion as to whether Wellington Capital is acting in the best interests of investors.

Wellington Capital has called a meeting on the Gold Coast for September 18 to vote on three resolutions that are designed to keep the fund a going concern.

"A lot of people don't really understand the full ramifications of what (Ms Hutson) is trying to push through," said Mr Chapman.

"All we're after is a fair go."

Although 3000 votes have already been lodged, Mr Chapman yesterday described PIF Initiative's chances of getting remaining investors vote down the proposals as 'pretty good'.

"The top 3000 people will more than cover it," he said.

Wellington needs the backing of 75 per cent of units by value to proceed.

PIF Initiative is concerned on a number of fronts, including the 14c per unit valuation put forward by Wellington for a liquidation of the fund.

The fund is said to be valued at 45c a unit as a going concern.

Mr Chapman said he believed 45c a unit could be achieved through an orderly sell-off of assets, giving investors the chance to retrieve more of their funds over a quicker timeframe, and he would like to see an independent responsible entity take over the task of doing so.

Wellington Capital has estimated it will take three to five years to restore full value to investors.

"But a lot of these (investors) are elderly people," said Mr Chapman.

"Half of them won't be around in five years. That's the sad part."

Mr Chapman said a promised 3c distribution to investors by December was a major incentive being used by Wellington Capital.

But he said this would be a repayment of capital, rather than payment from profits.

It also would be a trigger for Wellington Capital to be paid ongoing management fees for the fund.

PIF Initiative is opposed to an NSX listing for the fund.

A rush of sellers is expected to push the price of units down to about 10c each, it said.

Mr Chapman said this would be the worst outcome for elderly investors who needed to sell immediately.

Mr Chapman, once a comfortable self-funded retiree, invested about $1.25 million in the failed MFS empire, with about $200,000 in PIF.

"I'm doing it tough like you wouldn't believe, but there are lot more people who are far worse off than me," he said.

Seamisty You must agree what the above artical says Except for one thing WC say it can return true value in 3 to 5 years ??? Well thats a real long shot saying it could go from 10 cents to a Dollar in 3 to 5 years Remenber the real value of a company or Fund is only worth what it worth on the exchange Maybe in 20 or 30 years time yu may get your dollar back but with inflation over that time your dollar wont be worth much / Dane //

 

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

Listen all...she is in this to MAKE MONEY...of course...
what you all have to realise is...IF SHE MAKES MONEY...SO DO WE !!!!
I hope she makes a bundle...then so do WE...!!!
Wake up all you people and smell the roses...
Stuff reading all the small print...it just gives you a headache...
Talk about... the small poppy syndrome...ughhh

Well said!

 

[great dame]

Re: Octaviar MFS Premium Income Fund PIF

Listen all...she is in this to MAKE MONEY...of course...
what you all have to realise is...IF SHE MAKES MONEY...SO DO WE !!!!
I hope she makes a bundle...then so do WE...!!!
Wake up all you people and smell the roses...
Stuff reading all the small print...it just gives you a headache...
Talk about... the small poppy syndrome...ughhh

Suger my friend your forgetting WC are in a win win cant loose if the fund wasto head south WC would still head North they cant loose I am glad you used the word if in saying if she makes money JH is not an invester she is a Lawyer remenber Tell me Suger just what is her record in making bundles as you call them ??? People who put there heads in the sand usually die of suffocation Enjoy your day / Dane //

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

Seamisty You must agree what the above artical says Except for one thing WC say it can return true value in 3 to 5 years ??? Well thats a real long shot saying it could go from 10 cents to a Dollar in 3 to 5 years Remenber the real value of a company or Fund is only worth what it worth on the exchange Maybe in 20 or 30 years time yu may get your dollar back but with inflation over that time your dollar wont be worth much / Dane //

Well said!!

 

[Rance]

Re: Octaviar MFS Premium Income Fund PIF

Not the misleading, deceptive and heavy handed tactics of fear and intimidation and that Jenny Hutson has employed to gain control of our Fund

Yes, yes Jadel, a White Knight in Shining Armour will appear at the last moment, out of the mist to save us all from the horrible fate that awaits us from the hands of the Red Devil (JH).

Anyone with common sense knows that common sense ain't so common. The musings on this thread are proof of that.

Rance

 

[sugar3157]

Re: Octaviar MFS Premium Income Fund PIF

Suger my friend your forgetting WC are in a win win cant loose if the fund wasto head south WC would still head North they cant loose I am glad you used the word if in saying if she makes money JH is not an invester she is a Lawyer remenber Tell me Suger just what is her record in making bundles as you call them ??? People who put there heads in the sand usually die of suffocation Enjoy your day / Dane //

Wow GD I wish I had your crystal ball to see into the future..( maybe not it must have been on the blink when you bought into the PIF)...although all you see and state here is gloom and doom...I don't know what is going to happen in the future...neither do you...so stop telling all on here your unqualified opinion...PLEASE....

 

[great dame]

Re: Octaviar MFS Premium Income Fund PIF

G'day Great Doom!

We live in interesting times!

Rance [/QUOTEt Hello Rance i realy should not talk to you after you cancelled out my vote I like to call it interesting only when i am makeing money Cheers / Dane //

 

[great dame]

Re: Octaviar MFS Premium Income Fund PIF

Wow GD I wish I had your crystal ball to see into the future..( maybe not it must have been on the blink when you bought into the PIF)...although all you see and state here is gloom and doom...I don't know what is going to happen in the future...neither do you...so stop telling all on here your unqualified opinion...PLEASE....

Suger i know more about the markets then most i make a living buying & selling shares Sure i loose some you cant win all the time but i am uesley in front at the end of the year Yes i droped my guard when i invested in PIF for 9 months i did resurch seemed to be good Reserch did not tell me there were robbers in the fund though As for my unqualified opinions as you say your wrong I have history on my side JH can not beat the markets with only 45% in growth investemts balance in income investemts Still waiting for you to tell us JH track record on investing I wont hold my breath / Dane //

 

[RickH]

Re: Octaviar MFS Premium Income Fund PIF

As has already been posted by Burned in great detail a range of options is available to investors by democratic choice once we have the right to determine our own future.
............................
Not the misleading, deceptive and heavy handed tactics of fear and intimidation and that Jenny Hutson has employed to gain control of our Fund

Mr Chapman of PIFI has been quoted as saying the following –

"All we're after is a fair go."

“Although 3000 votes have already been lodged, Mr. Chapman yesterday described PIF Initiative's chances of getting remaining investors vote down the proposals as 'pretty good'.”

“The top 3000 people will more than cover it,"

“Wellington needs the backing of 75 per cent of units by value to proceed.”

Jadel said #2382

“As has already been posted by Burned in great detail a range of options is available to investors by democratic choice once we have the right to determine our own future.”

And then later
“However as previously stated any decisions will be made transparently and openly by democratic choice”


I realise that I have taken these shorter statements from longer statements but I always thought that democratic choice was one person one vote – But the above seems to prefer the people with the most money will always win. If they do win due to their greater invested dollars will they change the voting to one investor – one vote or will they keep the same bias towards the larger investors?

Regards, Rick:couch

 

[Rance]

Re: Octaviar MFS Premium Income Fund PIF

Hello Rance i realy should not talk to you after you cancelled out my vote I like to call it interesting only when i am makeing money Cheers / Dane //

Damm... we cancelled out each other's vote! We are quits then... What fate awaits us now! Time will tell...

Cheers mate
Rance

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

From the Australian: Ms Hutson told The Australian that proposed changes would make it more difficult for PIF's 10,000-plus investors to remove Wellington, but claimed it was a move to help investors who "wanted to ensure we were there for the long-run". - 05/08

The above reported statement is unconvincing to the extreme. That we should have to pay a 2% penalty if a manager does badly for us is Alice in Wonderland or Monty Python material. It exemplifies why many investors have misgivings about WC's sincerity.
Still, I'll vote YYN and keep ASIC's phone number on my cork board. The AG had better remain very active if WC get the vote.

 

[like2ski]

Re: Octaviar MFS Premium Income Fund PIF

From the Australian: Ms Hutson told The Australian that proposed changes would make it more difficult for PIF's 10,000-plus investors to remove Wellington, but claimed it was a move to help investors who "wanted to ensure we were there for the long-run". - 05/08

The above reported statement is unconvincing to the extreme. That we should have to pay a 2% penalty if a manager does badly for us is Alice in Wonderland or Monty Python material. It exemplifies why many investors have misgivings about WC's sincerity.
Still, I'll vote YYN and keep ASIC's phone number on my cork board. The AG had better remain very active if WC get the vote.

Hi selciper,
Your logic is hard to follow, why vote YYN if you feel that way? moreover, as far as ASIC's assistance is concerned I wouldn't count on it!!!!

 

[Rance]

Re: Octaviar MFS Premium Income Fund PIF

Damm... we cancelled out each other's vote! We are quits then... What fate awaits us now! Time will tell...

Cheers mate
Rance

Well, maybe we haven't cancelled each other's vote... a little history... I joined the fund at it's birth; enjoyed the fruits of its halcyon days; enjoyed the golf and being wined and dined by MFS; as a Platinum Member enjoyed bonus interest rates; and still have a swag of units in the PIF even though I redeemed a significant number in November 07. So maybe my vote still outweighs yours... I was about to say: "I'll show you mine if you show me yours" but, but, but... maybe best not.

Rance

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

Octaviar's manager wants more control

A finance company that took control of the collapsed Octaviar Premium Income fund is trying to change the funds constitution so that it would gain million of dollars if it was removed as manager, reported The Australian newspaper.

Controlled by Jenny Hutson, Brisbane company Wellington Investment Management is trying to place restrictions on the Fund that would make it difficult for investors to remove it as manager, according to a report by Hicksons Lawyers partner Kalinda Cobby.

Mr Hutson told the paper that while the changed would make it more difficult for Wellington to be removed, they would help the investors that wanted to keep the manager in place long-term.

Investors of the Fund, who have formed a body called the PIF Initiative, are upset about Wellington's claims that if they did not approve the changes to the Fund's constitution, they would only receive 14 cents in the dollar.

Wellington is trying to implement a severance fee into the Fund's constitution, the paper reported.

Mr Hutson told the paper Octaviar had paid Wellington $750,000 to manage the Fund, but Wellington was also expected to pay Octaviar a fee between $15 million and $20 million depending on how the Fund performed.

http://www.businessspectator.com.au...wants-more-control-J6LVD?opendocument&src=rss

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

The only change to the constitution that appears to be in our favour over the REs is the change in the management fee from “all surpluses generated by the scheme” and only after all expenses were paid. This is being changed to a fee of .7% of funds under management whether the fund can afford to pay it or not. If you consider the funds current circumstances even this change is to the benefit of the RE and to our detriment. I see every other change that is being proposed as taking away unit holder rights and giving excessive rights to the RE.

I am confident as a group of investors we can get together with legal representation and the RE and come up with proposals that are to our benefit (including the benefit of the RE). I don’t care who the RE is as long as we get the constitution right and they have a proven track record managing the type of assets in our fund. The kind of proposals I would like to see given to investors to vote on are:

• remove redemption clauses and replace with NSX. Very similar to the current proposal but would not include extra rights for the RE such as 2% removal fee or a change to the quorum section. And the constitution would not be flawed. (perhaps more than 2 hrs should be spent on this) OR
• an orderly wind down over what ever timeframe the manager of the fund deems necessary up to 5 years. OR
• extend the redemption period past 360 days to allow more time for other proposals to be considered.

Here are the issues I have with resolution 1:

Constitution issues:
There are many issues with the constitution. Once notice of a members meeting has been given the constitution must exists and remain unaltered, so it’s either accept this flawed constitution or reject it altogether. Below are many things that need to be fixed in the constitution as it is currently difficult if not impossible to interpret some sections.

The constitution states that it will replace old versions of the constitution but refers back to old copies which is not possible if it is to replace them.

There are over a dozen drafting errors.

The EM states that an Advisory Committee will be set up if all 3 res are passed but the constitution doesn’t mention this or the committees’ rights.

The EM refers to changing the calculation of the unit entitlement and removing the definition of unit days. Neither change has been made in the proposed constitution.

The EM and constitution are inconsistent for the Quorum section. If the quorum section is to only take effect if both res 1 and res 3 are passed then the proposed constitution needs to be updated.


Comments on Fees
Just about all expenses WC encounter will be paid for by us (the fund), we will even pay their taxes for them, so the .7% is tax free!

The .7% management fee is of funds under management and does not limit the funds under management to just the PIF. Also the fee is payable in advance for each month and can be determined on the last audit which could be more than 12 months old. Even if the fund is being wound down the fee could continued to be taken even if the FUM is close to $0. This is inconsistent with the EM which states the fee will be calculated with reference to the FUM at the end of the previous month. I think the EM is very misleading to say the fee will be calculated according to the previous month if the RE is able to use the last audit to calculate their fee. Some pressure on the RE to perform is removed as they no longer have to maintain our units at $1 or give us any distributions for them to collect their management fee.

2% RE removal fee. The EM states the RE would receive 2% of funds under management if WC are removed, but the constitution states 2% of the gross value of the scheme as determined in the most recent audited accounts. This audit could be over 12 months old! It goes on to say it’s at the REs discretion if the last audit is used or they can order the new RE to do an audit at our expense (if they think the current audit would be more than the most recent audit). I.E. if WC are removed before the current audit is completed they would get $15 mill dollars as the last audit says the fund is worth $750 mill! Anyone know if the audit will be finished this year?

Removing unit holder rights
There are a lot of changes to the constitution which are not mentioned in the EM with regards to holding a members meeting. Previously the constitution just stated that meetings are to be held in accordance with the Corp Act now there are a lot of changes which diminish unit holders rights at a meeting. I.E. The chairman has the power to demand cessation of debate and adjourn the meeting without taking a vote on the issue. And that the election of a chairman cannot be voted on by members.

If a future resolution is put forward to replace the constitution the vote would need to meet the new quorum specifications which could make it hard to replace the constitution in the future. (i.e. 51% of the units would need to be represented in a meeting either in person or by proxy. This compared to the current quorum which just requires two people to attend the meeting)

It will be a lot harder to remove the RE in the future due to the changes to the quorum section from requiring just two people to attend a meeting (in person or by proxy) to at least 4 people who hold at least 51% of the units.

There will be no redemptions the only way to get back capital it via the NSX and a very limited buy back which would only give investors around $1,500 guaranteed. The buy back is at 45 cents rather than the NTA.

 

[mgr2118]

Re: Octaviar MFS Premium Income Fund PIF

Notwithstanding anything else offered or stated when we all first joined the MFS PIF, we all had a clear understanding that:-

1. we would earn regular income (at a defined rate) on money that we put into the MFS PIF,

AND

2. we had the option to redeem our money, or re-invest our money, after a defined period.

The responsibility for these liquidity events was with MFS PIF (as the RE).

Although words may have been said during the July forum meetings, I have looked and looked and can find no clear and precise statements in any formal documentation from WC that we will receive any REGULAR income.

I also find it unacceptable that WC has absolved itself totally of any responsibility to return outstanding value of OUR funds – whether in 3 months, 3 years or even 30 years!!

Having attended a forum meeting, and after reviewing the WC Melbourne Forum DVD a number of times, it appears, certainly to me, that JH has not really listened to us, the unit holders, about these key issues.

On this basis, I have to concur with the actions of the PIFI.

Regardless of the many comments and concerns expressed on this forum over many months (which would have also been monitored by WC staff), I certainly have seen nothing really improve (for unit holders).

As a legally incorporated association, PIFI has the ability to respond to the very legalistic JH in words that she can understand.

 

[like2ski]

Re: Octaviar MFS Premium Income Fund PIF

Notwithstanding anything else offered or stated when we all first joined the MFS PIF, we all had a clear understanding that:-

1. we would earn regular income (at a defined rate) on money that we put into the MFS PIF,

AND

2. we had the option to redeem our money, or re-invest our money, after a defined period.

The responsibility for these liquidity events was with MFS PIF (as the RE).

Although words may have been said during the July forum meetings, I have looked and looked and can find no clear and precise statements in any formal documentation from WC that we will receive any REGULAR income.

I also find it unacceptable that WC has absolved itself totally of any responsibility to return outstanding value of OUR funds – whether in 3 months, 3 years or even 30 years!!

Having attended a forum meeting, and after reviewing the WC Melbourne Forum DVD a number of times, it appears, certainly to me, that JH has not really listened to us, the unit holders, about these key issues.

On this basis, I have to concur with the actions of the PIFI.

Regardless of the many comments and concerns expressed on this forum over many months (which would have also been monitored by WC staff), I certainly have seen nothing really improve (for unit holders).

As a legally incorporated association, PIFI has the ability to respond to the very legalistic JH in words that she can understand.

Hi mgr,
Could not agree with you more!!!
I hope that COMMON SENSE will prevail amongst unit holders or we will be on "a hiding to nothing" unless we can negotiate/obtain a better deal out of WC.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Here you are MGR2118, Page 59, Explanatory Memorandum::::6.4 Cash payments
The responsible entity intends to make cash payments to Unitholders totalling 3 cents per Unit with
the first payment to be made in October 2008, the second in December 2008 and thereafter quarterly.

 

[Smokey68]

Re: Octaviar MFS Premium Income Fund PIF

And what are the payments for 2009?

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

And what are the payments for 2009?

The answer I received when I spoke to WC was an anticipated annual 6cent per unit paid quarterly in 1.5cent distributions plus a one of payment when and if the Support Facility is received. This may be increased when the Fund is stabilised. I have also spoken to a Fund manager and a Fanancial advisor who have the same information. Seamisty