Wellington Capital PIF/Octaviar (MFS) PIF

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

Thank you seamisty. As with other progresses, this will be a slow one. But signs are there that information will be forthcoming more readily once the IAC channels are firmly established.
And to JOHN H re """"Just had a relook at the "September Update". Wellington have given an email address for our representatives - iac@newpif.com.au! They say it will be checked daily, and forwarded on to the relevant member.
Has anyone invited them to contribute to this forum???"""" ............
We can rightly claim that recent pushes to open the communication channels have hit their marks. A modest pat to our collective back is apropriate. With best wishes to all, simgrund

........... In fairness simgrund, we can't claim any credit for that! It has been on Wellington's site, (and in their mail-out) since September!!!

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Extracted from Article in SMH :::: Hedge fund could be back for secondsSCOTT ROCHFORT
December 15 PALM IN A GALE http://www.smh.com.au/business/hedge-fund-could-be-back-for-seconds-20091214-ks9d.html

Philip Adams, the co-founder of the sunken Gold Coast financial engineer MFS (aka Octaviar), could be forgiven for having a sense of deja vu.

Adams, who left Australia to help MFS's expansion into Dubai before the firm's multi-billion dollar collapse, might be getting the wobbles living on one of the fronds of the giant man-made palm tree island which juts out of the emirate.

Yesterday Nakheel, builder of Palm Jumeirah, was desperately seeking a reprieve from the repayment of a $US3.52 billion ($3.9 billion) bond issue that is due. At the time of its listing, it was the largest listed sukuk (Islamic bond) on issue.

Adams, meanwhile, continues to keep a low profile. Last month he was sent a bankruptcy notice from the liquidator of Lift Capital, McGrathNicol.

Adams and MFS co-founder Michael King took $13.7 million in loans from Lift. Altogether, they had $127.2 million in margin loans over their now worthless 13 per cent stake in MFS. While King struck a two-year insolvency agreement with creditors in August to avoid bankruptcy, Adams has so far proved harder to track down.

PRICE IS RIGHT

Adams appears to be struggling to find clientele for his corporate consultancy in Dubai, Agilis Global. The firm still has Stuart Price listed as its chief executive, despite the former head of MFS's international (aka Dubai) operations having returned to Australia midway through the year.

Price is now chief executive of the Adelaide law firm Kelly & Co. On the Kelly & Co website Price appears coy about his recent job history. It notes his time as head beancounter at Elders Rural Bank but makes no mention of MFS, where he worked for two years before helping set up Agilis.

When the Herald contacted Price he said he was tied up in a business lunch and would have to call back. He failed to call and also appeared to have his phone on message bank for a large part of yesterday afternoon.

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

Extracted from Article in SMH :::: Hedge fund could be back for secondsSCOTT ROCHFORT
December 15 PALM IN A GALE http://www.smh.com.au/business/hedge-fund-could-be-back-for-seconds-20091214-ks9d.html

Philip Adams, the co-founder of the sunken Gold Coast financial engineer MFS (aka Octaviar), could be forgiven for having a sense of deja vu.

Adams, who left Australia to help MFS's expansion into Dubai before the firm's multi-billion dollar collapse, might be getting the wobbles living on one of the fronds of the giant man-made palm tree island which juts out of the emirate.

Yesterday Nakheel, builder of Palm Jumeirah, was desperately seeking a reprieve from the repayment of a $US3.52 billion ($3.9 billion) bond issue that is due. At the time of its listing, it was the largest listed sukuk (Islamic bond) on issue.

Adams, meanwhile, continues to keep a low profile. Last month he was sent a bankruptcy notice from the liquidator of Lift Capital, McGrathNicol.

Adams and MFS co-founder Michael King took $13.7 million in loans from Lift. Altogether, they had $127.2 million in margin loans over their now worthless 13 per cent stake in MFS. While King struck a two-year insolvency agreement with creditors in August to avoid bankruptcy, Adams has so far proved harder to track down.

PRICE IS RIGHT

Adams appears to be struggling to find clientele for his corporate consultancy in Dubai, Agilis Global. The firm still has Stuart Price listed as its chief executive, despite the former head of MFS's international (aka Dubai) operations having returned to Australia midway through the year.

Price is now chief executive of the Adelaide law firm Kelly & Co. On the Kelly & Co website Price appears coy about his recent job history. It notes his time as head beancounter at Elders Rural Bank but makes no mention of MFS, where he worked for two years before helping set up Agilis.

When the Herald contacted Price he said he was tied up in a business lunch and would have to call back. He failed to call and also appeared to have his phone on message bank for a large part of yesterday afternoon.

Yes, one can only wonder whether Mr. King gave advice to the wheelers and dealers up there in Dubai.

I wonder just how many former high fliers in MFS and City Pacific would be proud to include their involvement in the fund management business in their resumes (on and off line)?

I always find Sharia law has some interesting aspects, to wit:-

"... "What's wrong with chopping off thieves' hands, Imam asks," by Christian Peregin for the Times of Malta, November 19 (thanks to Twostellas):

Imam Mohamed El Sadi, the Muslim leader in Malta, believes chopping off the hands of thieves is a "deserving punishment". ..."

http://www.jihadwatch.org/2009/11/imam-misunderstands-islam-asks-what-is-wrong-with-sharia-law-if-someone-stealswhy-is-it-wrong-to-cut.html

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

By chance, I came across this JH quote from the 7.30 Report transcript of 11/03/08. The program explored the ruins of MFS. There was no mention of PIF.

JH: "With people whose lives have truly been destroyed in a financial sense by the plight of MFS, is something that is just extraordinary. This is about ordinary Australians, who believed what they read, who put trust and faith in the board and there's an enormous human cost."

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Thankyou to all the regular forum readers who have not previously contributed in the past but who have recently made the effort to post on this thread to offer their support and make themselves known. I personally thank you for your contribution which is acknowledged and appreciated. I also thank the input and effort from regular PIF interested posters as I know how time consuming the research is behind many posts. I look forward to anything better than the past 20 months PIF investors have endured and hope 2010 delivers a more positive outlook.


'The most important single ingredient in the formula of success is knowing how to get along with people. '
Theodore Roosevelt

Cheers, Seamisty

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

Judgment

The judge and ASIC seem to be under the impression that Wellington are providing an orderly realisation of assets over a period of 3 to 5 years which will return 45 cents to unit holders. There was no mention during the 5 hour proceeding of Wellington returning $1 in 5 years! And interesting to note an orderly realisation of assets is over 3 to 5 years is assumed to be occurring despite Wellington stating to numerous unit holders the law does not permit this option and it’s not something they are interested in.

Page 3
“In broad terms what is proposed by this meeting is that the constitution of the fund would be changed in several respects with the objective of the fund continuing to trade as a going concern for a period in the vicinity of three to five years. The purpose of that is to return to unit holders far more than they would be likely to receive on effectively a winding up of the fund by the redemption of units in march next year. In broad terms the comparison is between an estimated 14 cents per unit in the event of a redemption in March of next year and about 45 cents in the event that the fund continues to trade, is able to conduct an orderly realisation of assets and otherwise is able to conduct it’s affairs over the next three to five years.”

Page 13
“I have had regard also to the financial material within this explanatory memorandum and to what is said about the likely proceeds from the orderly realisation of assets over a period of three to five years, …”

Page 17
“Of course that is not the only thing which is proposed and there are other financial considerations involved in a choice between effectively terminating the fund early next year and allowing it to trade on for three to five years….”

It looks like ASIC decided to abandon the issue of resolution 3 being an ordinary resolution instead of an extraordinary resolution. I find this disappointing as it should have been easy to prove an extraordinary resolution was appropriate for our fund due to it not being listed and I think it's also important as it's likely resolution 3 will meet the requirements of an ordinary but not an extraordinary resolution. Meaning we will have to pay the 2% RE fee if WC are removed.

Page 16
“The notice here refers to that an ordinary resolution. Originally complaint was made in that respect that that point was abandoned by ASIC.”

The judge agrees that unit holders will not have entitlement to receive any cash payments, the buy back or the advisory committee.

Page 7 “These are things WC are saying they will do but they are not legal obliged to do . In my view unit holders should not understand the material to represent that the passing of the resolutions would have the result of giving a legal entitlement to those interim payments, a buy-back of unit or the establishment of the investor advisory commit.”

Looks like the judge will hold WC to their statement of not taking the management fee before unit holders receive a 3 cent per unit distribution as the new constitution allows management fees regardless is the fund can afford to pay them (unlike the existing constitution). i.e. before expenses and distributions.

Page 8
The material, and particular the chairperson’s letter, represents that this management fee would not be paid to the entity until after “the 3 per cent cash payment has been made to unit holders”. That is a reference to payments totalling 3 cents per unit to be made by 24 December 2008. However, if the constitution is amended as proposed, there would be no limitation by the constitution which postponed the entity’s entitlement to the management fee paid monthly until after payment of that 3 cents per unit. Recognising this, the respondent offers an undertaking, the effect of which is that it would not claim the management fee until after those cash payments totally 3 cents per unit were paid, as is proposed, by 24 December next.”

Judge agrees the quarterly thereafter statement is misleading.

Page 12
“Ultimately, as I read this material as a whole, the various references to the quarterly payments could be reasonably understood by unit holders as references to quarterly payments in each quarter of 3 cents per unit.”

Page 13\14
“…(this) does not appear to have emerged until this morning when further affidavits came from the respondent’s side. In particular, it was only within an affidavit sworn today that the relevant resolutions of the board of the respondent were disclosed.

The result of the conclusion I have reached as to what might be reasonably understood about the size of these quarterly payments is that what is said about them is, in my view, misleading or deceptive or likely to mislead or deceive.”

If you have not yet realised from the audit or the figures\spreadsheets your fellow unit holders have generated that WCs statements of 1.5 cents per quarter and returning $1 in 3 to 5 years is not going to happen perhaps the above judgment will open your eyes. All spreadsheets and figures that have been produced to date have shown even the buy back will cripple the fund.

No redmeptions, no return of capital, no distrubtions. How about saying No to the resolutions and putting forward a decent resolution.

-----
"Wake up lil snoozy! Smell the smelling salts!"

A great posting to bring to the fore again.

 

[Cookie1]

Re: Octaviar MFS Premium Income Fund PIF

From the NZ Herald 18 Sept 2009
It just seemed appropriate to post this article being that it's so close to Christmas. I hadn't seen it before today but it does bring a tear to the eye....
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10598124&pnum=1

Obituary for Octaviar
By David Chaplin
11:15 AM Friday Sep 18, 2009

This was MFS' Christmas 2007 message for New Zealand investors:

"MFS Limited continues to see great opportunity to solidify its market leading position in the New Zealand debenture finance market."

Now this reads like a punchline to a bad joke but even then I thought there was something odd about issuing a press release just days before Christmas telling investors not to worry - this was a classic contra-indicator.

I recall a financial adviser rang me to ask what the story meant - he didn't realise there was anything he shouldn't be worrying about at MFS.

"It means you should worry," I told him.

With Christmas 2009 just around the corner MFS (subsequently renamed Octaviar after an hilarious court battle with a US investment firm that used the same acronym) has finally liquified leaving its NZ subsidiary OPI Pacific Finance in similar circumstances and the thousands of debenture investors who bought its useless bits of paper, at a cost of about $300 million, devoid of hope.

And all along the way NZ MFS/Octaviar investors have been buoyed by false hopes - first the famous 'put' option that the NZ management failed to put, followed by a moratorium that is now officially dead.

Meanwhile, the MFS chief, Michael King, was out enjoying himself with his pony prompting one of his disgruntled investors to vent: "He pretends to be media shy and I just find it disgusting that he's playing polo while the rest of us with our hard-earned are suffering."

There's a lesson here: never entrust your money to Australians who play polo, even if they think of you at Christmas.

David Chaplin

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Cookie1, there is more than one lesson PIF investors have learnt::






Tears amid fund rescue bid
Nick Nichols and Shannon Willougbhy | September 19th, 2008



Jenny Hutson addresses a meeting of 400 Premium Income Fund investors at the Gold Coast Convention & Entertainment Centre yesterday.

THE emotion of four months at the helm of the embattled Premium Income Fund breached the normally composed exterior of Jenny Hutson on the Gold Coast yesterday.

While the outcome was the best she could have expected -- a postponement of the vote on three key resolutions until October 15 -- Ms Hutson fought back the tears as she detailed the road ahead for the fund's 10,300 investors.

"I've put my heart and soul into (this) over the past 139 days," she told the meeting of about 400 at the Gold Coast Convention and Exhibition Centre.

"It's about winning," she said, her voice quivering with emotion after investors clearly backed her vision. "I am not going to leave this battlefield until I am victorious."

It was the rhetoric an overwhelming majority of investors wanted to hear.

The Premium Income Fund, formerly operated by fallen corporate star MFS, has $755 million of their funds locked up until at least the beginning of next year.

At the latest count, those funds were worth just $340 million.

Since taking over the fund from Octaviar (formerly MFS) on May 2, Ms Hutson's Wellington Investment Management has slashed bank debt from $100 million to $9.5 million. "We are proud of what we have achieved," said Ms Hutson.

She has promised investors they will receive a 3c per unit capital payout by December 24, with part of that to be paid next month.

Yesterday's meeting was called to vote on three resolutions, including approval for a listing of the fund on the National Stock Exchange to allow cash-strapped investors an option to cash in their units.


But the Australian Securities and Investments Commission on Wednesday ruled the resolutions could not be put to a vote at the meeting.

It has sought clarification from Wellington on the proposed payout, saying that some investors could be confused into thinking they could expect continued quarterly distributions of 3c a unit.

Wellington has 28 days to clarify this point before investors gather again in October.

Yesterday began auspiciously for Ms Hutson despite tight security as about 400 filed into the auditorium. Investors applauded her as she took to the podium.

As questions were called, one woman described Ms Hutson as 'like a breath of fresh air'.

Another investor voiced his anger at MFS founders Michael King and Phil Adams, describing them as 'two average solicitors' who amassed an incredible fortune on the savings of small investors.

He described the MFS debacle as the equivalent of Mr King and Mr Adams 'building a plane and then crashing it'.

Ms Hutson yesterday said the Premium Income Fund was not looking at legal proceedings beyond the initial action to recover funds owed to the fund by Octaviar, but she said it was understood ASIC had been investigating some aspects of the MFS collapse since January.

While it was 'not the right time' for such action by the fund, Ms Hutson did lay open the possibility of legal proceedings against individual parties.

On the question of the fees to be charged by Wellington for operating the fund, one investor was clear.

"We don't personally give a stuff how much you make, as long as we get our money back," he said.

Wellington will not be paid until investors receive their initial 3c payout and Ms Hutson has vowed she will return full value to unit-holders over the next three to five years
z;;

Well, here we are and nearly 15 months on and Xmas nearly upon us again and not only have we not see a cent in return of capital or PIF distribuion,
we have insult added to injury in the fact that our unit value has deteriorated further and it appears WMIL as former RE of our fund (unless todays court outcome proves different) is still involved with legal ramifications which could possibly have a detrimental effect to PIF unit holders re conflict of interest. This being the case, can we expect JH to put her hand up and do the right thing by us and admit WC cannot deliver (and has not to date) and give us the opportunity to explore other avenues which do not have exposure to related party transactions and prior dealings with the parent company? Personaly, from past experience, no, we cannot rely on WC to act in the best interst of PIF unitholders unless I am totally brain dead and not as clever as some claim to be. Seamisty

 

[Cookie1]

Re: Octaviar MFS Premium Income Fund PIF

Thanks, Seamisty. Here's an article from WAtoday BusinessDay 16/12/09

http://www.watoday.com.au/business/pack-enough-for-a-threeweek-stay-20091216-kxjs.html

"Pack enough for a three-week stay
SCOTT ROCHFORT
December 16, 2009

Michael King...clear the diary for an April public examination.
Creditors and general observers who want to see MFS Limited's co-founder, Michael King, help provide an explanation for the collapse of the Gold Coast investment firm might need to pack more than a sandwich.

The liquidators of the firm now called Octaviar have hinted a public examination in the NSW Supreme Court could stretch out for weeks, after the first batch of summonses was sent out to five former MFS staff this week. Aside from the polo-loving King, they include Craig White the former MFS chief executive, David Anderson, ex-chief financial officer and well-paid consultant to the former liquidator, Deloitte, the ex-company secretary, Kim Kercher, and the former chief operating officer, David Kennedy.

The liquidator, Bentleys Corporate Recovery, has allocated three weeks from April 12 for the five former executives to provide evidence to help it work out the reasons for the collapse of the firm with $2.24 billion of liabilities.

It is yet to be disclosed whether summonses will be sent to the firm's former auditor, KPMG, former administrator-liquidator, Deloitte, and some of the non-executive directors of MFS. Nor is it known whether the former MFS chairman and ex-Liberal leader Andrew Peacock will make an appearance."

Sounds like it's going to be a long wait to hear about "what went wrong"! Hopefully, investors can all manage to hang on long enough to find out the truth.

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

I think that a key phrase in today's Scott Rochfort article re the public examinations is: "The first batch of summonses was sent out to five former MFS staff this week..." First batch! I bet that there are some nervous persons wondering whether they might receive a mention on another future list. Should be a revealing three weeks of evidence.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

It is my understanding that the findings from the liquidator, Bentleys Corporate Recovery will be on the public record so this information can be accessed to be used in conjuction with the IMF Class Action and ASIC's investigations if needed. No stone will be left unturned and Jenny Hutson will be able to get off the battlefield and stop chasing that $147.5 million to the end of the world and get on with fullfilling some of her original promises like restoring unit values!!

Yesterdays IMF court hearing will resume/continue tomorrow so hopefully we will hear something after that. Seamisty

 

[Cookie1]

Re: Octaviar MFS Premium Income Fund PIF

In The Australian today...

http://www.theaustralian.com.au/bus...rns-of-a-dilemma/story-e6frg8zx-1225811150505

CITY BEAT: Andrew Main From: The Australian December 17, 2009 12:00AM

Vintage Bentleys

SYDNEY corporate ghouls might like to note some forthcoming dates in April and May for liquidator Bentleys' examination of four former MFS directors, David Anderson, Michael King, Craig White and David Kennedy, plus the defunct group's company secretary Kim Kercher, to ascertain the reasons for the property and leisure group's demise.

Three one-week blocks have been set aside starting on April 12 in the NSW Supreme Court and ending on May 14.

King, at least, should know his way around a courtroom, since -- along with co-founder Philip Adams -- he was a Gold Coast criminal lawyer before he got the property bug. Bentleys Corporate Recovery took on the liquidation job on three months ago from Deloitte because of potential conflicts. MFS changed its name to Octaviar in March 2008 and went into administration six months later.

 

[k.smith]

Re: Octaviar MFS Premium Income Fund PIF

http://www.dailymercury.com.au/story/2009/12/18/buyer-ready-to-take-on-troubled-high-rise-project-/

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

I hope you folk enjoy my effort to give you all a piece of light refrain.

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

I hope you folk enjoy my effort to give you all a piece of light refrain.

I should point out that it was just a cartoon modified from the one I did for the FMF. I did it at the request of one of your members who is in both funds:-

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

I would have thought Jenny Hutson would have been too busy 'restoring PIF investors unit value' and attending court cases to take on another empire building role with her good friend Chris Scott. Seamisty

Business Gold Coast

http://www.goldcoast.com.au/article/2009/12/19/171171_gold-coast-business.html






Childcare empire
Nick Nichols, business editor | December 19th, 2009

TOURISM entrepreneur Chris Scott is set to return to the corporate scene following a proposed $40 million merger that will see Early Learning Services become a new force in the national childcare industry.

Mr Scott will take over as managing director of Early Learning Services once shareholders approve the Gold Coast company's union with larger rival Payce Childcare early next year.

The surprising deal comes just three months after Sydney developer Payce Consolidated sold 75 per cent of subsidiary Payce Childcare to private equity group Wallace Infrastructure, a company which is headed by Brisbane accountant Brian Wallace.

Payce Childcare operates 60 centres under the Ramsay Bourne and World of Learning banner, bringing the total number of centres under the ELS umbrella to 98.

Payce Consolidated will retain about 15 per cent of the merged venture, which also reunites Mr Scott's executive team at holiday and travel group S8.

Jenny Hutson, the former S8 chairman, will come on board as the new ELS chairman, replacing Tony Hartnell.

Mr Scott, who until earlier this year was assisting receivers to failed Gold Coast company Octaviar, has been running Payce Childcare since the Wallace buyout in September.

Details of the financial backers at Wallace have not been disclosed, but Mr Scott said the finders were Australian based.

The merger, which has been in the pipeline for more than a year, will create the largest 'for profit' childcare company in Australia, a title formerly held by Eddy Groves' failed ABC Learning Centres.

Earlier this month, a charity-based syndicate bought almost 700 of the embattled ABC centres, ending months of uncertainty for the industry.


"I think now that the ABC assets have found a home, there will be stability in the sector and a redefining of how childcare education is delivered," said Ms Hutson.

She said the business model remained sound and the merger would give ELS 'critical' scale from which it could continue to grow.

"It's moving to the next level and we hope under our leadership we'll be the 'for profit' leader for some time to come."

Under the merger agreement, ELS, which will continue to be based on the Gold Coast, will issue 40 million new shares at 25c each, more than double their trading price for the past year.

ELS also will pay the Payce partners $6 million in cash, or the equivalent in shares if it is unable to find sufficient funding.

Outgoing chief executive Chris Sacre, who will return to his role as chief financial officer, said the deal has been structured with low debt of 37 per cent of assets.

He said the merger offered immediate elevation of ELS's business, which until now had been struggling with minor acquisitions from small operators.

"It is so much more efficient to buy groups for a listed structure, so we can bolt it on and move on to the next deal," he said.

Payce Consolidated formerly operated its childcare business in joint venture with Babcock & Brown, which collapsed last year.

It since has managed to disentangle itself from the failed financial engineer and comes into the ELS fold debt free.

Payce Consolidated chief executive Brian Boyd, regarded as a seasoned operator in the field, also will join the ELS board as director.

ELS shares surged 26 per cent to close at 14.5c yesterday.

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

seamisty, Yet another example of the types of cosy business relationships that got us into this situation!

 

[k.smith]

Re: Octaviar MFS Premium Income Fund PIF

seamisty, Yet another example of the types of cosy business relationships that got us into this situation!

I feel like we the PIF are just a collector item...we are like bone china locked in the display cabinet, to be looked at and spoken about.

We in the display cabinet along with a few other bargain bits...must take a lot of time and energy to put the collection together. The sad reality is that we are not bits of bone china, we are real people who have been collected and displayed and we are waiting and waiting for justice and the return of what is rightfully ours.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

I feel like we the PIF are just a collector item...we are like bone china locked in the display cabinet, to be looked at and spoken about.

We in the display cabinet along with a few other bargain bits...must take a lot of time and energy to put the collection together. The sad reality is that we are not bits of bone china, we are real people who have been collected and displayed and we are waiting and waiting for justice and the return of what is rightfully ours.

Exactly k.smith, unfortunately for JH though, most of the trophies on display in the bargain bin still retain their full faculties and even though the key to the cabinet has been thrown away, the glass is smeared and the shelves covered in dust, the contents are not prepared to sit idly by while others grow fat on the spoils!!! Seamisty

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

seamisty, Any news of progress in the Federal Court?