Wellington Capital PIF/Octaviar (MFS) PIF

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

Update on the LKM story:

Travel ban slapped on LKM pair
VANDA CARSON SMH
January 26, 2010

The founders of the failed investment group LKM Capital have been forced to shelve plans to leave Australia for an indefinite stint in London.

Rolf Koops, 49, and Sandra Martin, 48, had bought one-way tickets to London to travel on Friday with at least two of their three children.

Mr Koops had planned to take a job with his sister Liz Koops's company and was set to start work on Monday.

But in an unscheduled sitting of the Federal Court late yesterday, Justice Margaret Stone ordered the pair surrender their Australian and German passports as well as their airline tickets until the end of May.

The Australian Securities and Investments Commission successfully argued that the pair should not be allowed to leave until the commission finishes its investigation into whether they breached their duties as directors.

The commission is also considering laying criminal charges of reckless or intentional dishonesty against the pair for allegedly failing to act in the best interests of their mostly elderly investors, and the LKM receiver is suing the pair for damages.

Nearly 1200 debenture holders had $63.6 million invested when the fund was placed in receivership in August 2008. The shortfall was between $25 million and $38 million.

I have highlighted the second last paragraph as it contains an important pointer to what may happen with PIF:

If the ASIC civil case against King etc succeeds, ASIC may refer the matter to the DPP for criminal prosecution. This could be strengthened by the results of the Receivers examination mid-year. This examination will draw more MFS people into the net (it has already been reported that other MFS Directors and Officers have been sent subpeonas to appear at the examination in the Supreme Court.) Criminal charges of reckless or intentional dishonesty may see some of the miscreants serve custodial sentences.

Also the Receiver may itself sue other MFS/Octaviar/Wellington Investment Management parties for a broader range of damages than the current ASIC case involves.

All of this will inevitably take time, but we will get an indication of the likelihood of action from the receivers mid-year examinations.

 

[zeva]

Re: Octaviar MFS Premium Income Fund PIF

What has happen to the to PIN offers?
Its a blank on my screen, has NSX thrown out WC for lack of transparency.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

What has happen to the to PIN offers?
Its a blank on my screen, has NSX thrown out WC for lack of transparency.

HA HA Zeva, thats exactly what I thought, but no, all the listed NSX companies are the same, maybe something to do with it being a public holiday? Seamisty

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

I'm loving this post selciper!! How could this whole situation be spun any other way? And what self-respecting business person carries on picking up further work when they have done such a blatantly lousy job here? That utube clip where JH is all puffed up full of self-importance is enough to make me throw up, knowing what we know. Time to enlighten others.

I'd like to see a journalist take someone's personal story & describe from their viewpoint the frustration & discontent with the last 12 months (mis) management & the present situation. Journalists have to have an angle for human interest & everyone likes to read and relate to hard-luck stories. I think we need to get selciper's message out (that things have progressed horribly for investors) and it could have & should have been handled better and is hugely & painfully adding to severe hardship. Perhaps seamisty could just do a matter-of-fact very simple list of the blatant undeniable wrongs (as per above blog) and someone here could take it to a local newspaper with 'their 'story. Include a photo holding a piece of paper with the miserable share price and a heading along the lines of ' We were promised so much & now further heartbreaking disappointment'. ...... Wouldn't an exposing article with such undeniable truths get WC & JH squirming? Gee maybe they'd even be answerable somehow......Answerable or not, time to expose & I think the only way to scream this message from rooftops is with a human face & story attached...any volunteers? Even a small local paper might be a start and then forward the story to a bigger paper who might see how scandalous this is....

Any Brisbane Gold Coast investors willing to make some noise or for that matter anyone on the East Coast? I can help with content/info or maybe we should contact all the original reporters who couldn't get enough of this story in the early days and ask them to do a follow up on investor sentiment and how the lady in the red jacket making statements to the media such as the following has delivered nothing and is proving so incompetant Wellington Capital cannot even provide investors with a PIF update on time, then deny it is late to the media!!!!!


'Ms Hutson said if the voters stuck with her, Wellington Capital would work to recover between 45c to 65c per unit.

She said that liquidation would return just 14c in the dollar to investors.

She also reminded investors there would be a 3c-per-unit payment made by December, with half paid in October.' (20 Aug 2008)






'She said PIF was better placed now after moving 'harder and faster' earlier than other troubled funds, a tactic that drew considerable criticism from some quarters at the time.

"There is no room for hesitation in this market.' (16 Oct 2008)



Ummmn, it appears whatever that tactic was it is possibly drawing even more criticism now!!! Seamisty

 

[charles36]

Re: Octaviar MFS Premium Income Fund PIF

Seamisty, you are a glutton for punishment. Why do you want the update? It wil no doubt be depressing. You may find the Wollongong Hotel was mortgaged, some suggestion up to 12 million, if she pays back 3 cents of our own money (capital, 22 million, so 34 million, legal expenses for McCullough Robertsons, say 2 million, Wellington Capital Ltd fee for using their expertise in financial dealings and there goes the Wollongong Hotel. Next project please. Don't forget the cost of the glossy update, I still do not know what is wrong with Reflex A4 paper, other than it is miles cheaper. Oh, I forgot, once she pays us we then pay .07% on remaining assets at date of last official valuation.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Seamisty, you are a glutton for punishment. Why do you want the update? It wil no doubt be depressing. You may find the Wollongong Hotel was mortgaged, some suggestion up to 12 million, if she pays back 3 cents of our own money (capital, 22 million, so 34 million, legal expenses for McCullough Robertsons, say 2 million, Wellington Capital Ltd fee for using their expertise in financial dealings and there goes the Wollongong Hotel. Next project please. Don't forget the cost of the glossy update, I still do not know what is wrong with Reflex A4 paper, other than it is miles cheaper. Oh, I forgot, once she pays us we then pay .07% on remaining assets at date of last official valuation.

I wonder if the company Print Mail Logistics (of which Wellington Capital is the nominated advisor for and a substantial shareholder) is responsible for PIF updates/mailouts etc? Can anyone tell me what the role of Perpetual Nominees LTD is apart from holding the title to PIF assets? Seamisty

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

Extract from "Findlaw."
--------------------
Australian courts have had the view in the past that a director is acting without good faith, if the director failed to exercise the care and diligence expected of an ordinarily prudent director, even though they acted quite honestly. This was adverted to in the leading case of the State of South Australia v. Marcus Clarke (1996) (19 ACSR), which involved an indirect conflict of interest.

In addition, sections 199B and 199C of the Corporations Act, contain specific prohibitions on a company providing D & O Insurance in cases of a wilful breach of duty, good faith or misuse of a director’s information or position. Beyond this, in many D & O Insurance policies, cover is not provided to directors who are involved in "wrongful acts". A "wrongful act" is commonly defined as "any actual or alleged breach of duty, breach of trust, neglect, error, misstatement, misleading statement, omission, breach of warranty or authority, or other act done or wrongly attempted by a person in their capacity as a director, other officer or employee of the company". There is a real risk that directors will not be personally covered by D & O Insurance for any loss suffered as the result of any behaviour that might be deemed to be a wrongful act.

All directors should be aware that there will be no insurance cover for any fraud or dishonesty, or any criminal act or deliberate statutory breach or any transaction involving insider trading or personal profiteering on their part. However, some actions giving rise to minor offences might not be so obvious as being matters that fall outside the level of insurance protection provided.

For instance, D & O insurers traditionally do not provide compensation for directors who are fined or penalised for any acts of wrongdoing in their capacity as a director. This even extends to the civil penalties under the Corporations Act, which fall short of criminal offences.

-------------------------------

 

[reasonable]

Re: Octaviar MFS Premium Income Fund PIF

simgrund,what a great idea!!! I laughed at your suggestion initially and then I thought, why not? What have we got to lose, it certainly won't be a 'celebration' in any way shape or form, perhaps all thread users/lookers could indicate their confidence/support or lack of in our current RE? just a simpleor:badassror:fur:beheadror:horse:r:swearr:shootr a comment as to their continued confidence/allegiance and overall satisfaction regarding the perfomance of WC to date as opposed to the promises made and not delivered. I am interested to see what the general overview is, just so I can determine if it is just a few of us who are of the opinion we were misled and if anyone still actually supports Jenny Hutson of Wellington Capial and believes she will deliver!! An RE who cannot even deliver a much awaited for PIF investor update on time and offers no excuse or apology is sadly lacking in competance or PIF investors best interest in my opinion. Investors thoughts and input greatly appreciated, thanks, Seamisty

I am someone who voted for receivership rather than what has turned out to be the WC debacle and demonstration of sheer incompetence. I had hoped that other’s confidence in WC was well founded but it is no comfort to witness the non-delivery of anything by WC,

Is it still too late for receivership? At least we may get something back.

 

[Mary Lynch]

Re: Octaviar MFS Premium Income Fund PIF

All those apartments that are being "snapped" up at rock bottom prices are probably being bought by JH's friends....Chris Scott and co.

Residential property prices are soaring, higher than ever before!!!...something's wrong somewhere!

 

[zeva]

Re: Octaviar MFS Premium Income Fund PIF

Reasonable.
We are in receivership. It's our loss and WC are the receivers and that will go on until there is nothing left, then JH will receive another mention for the great job and move into another fund to rescue insuring that WC get all the rewards and the investor become entitled for the pension.

 

[reasonable]

Re: Octaviar MFS Premium Income Fund PIF

Reasonable.
We are in receivership. It's our loss and WC are the receivers and that will go on until there is nothing left, then JH will receive another mention for the great job and move into another fund to rescue insuring that WC get all the rewards and the investor become entitled for the pension.

If we were in receivership at least we might expect a competent receiver to extract some value.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Any Brisbane Gold Coast investors willing to make some noise or for that matter anyone on the East Coast? I can help with content/info or maybe we should contact all the original reporters who couldn't get enough of this story in the early days and ask them to do a follow up on investor sentiment and how the lady in the red jacket making statements to the media such as the following has delivered nothing and is proving so incompetant Wellington Capital cannot even provide investors with a PIF update on time, then deny it is late to the media!!!!!


'Ms Hutson said if the voters stuck with her, Wellington Capital would work to recover between 45c to 65c per unit.

She said that liquidation would return just 14c in the dollar to investors.

She also reminded investors there would be a 3c-per-unit payment made by December, with half paid in October.' (20 Aug 2008)






'She said PIF was better placed now after moving 'harder and faster' earlier than other troubled funds, a tactic that drew considerable criticism from some quarters at the time.

"There is no room for hesitation in this market.' (16 Oct 2008)



Ummmn, it appears whatever that tactic was it is possibly drawing even more criticism now!!! Seamisty

Ok, so I had one PIF investor contact me by private message who continues to offer support and who is willing to chase up perpetual nominees. It would be really great if a few more thread followers would also help out here. Would a PIF investor who has time and computer research skills please compile a list of media journos/reporters with past links to associated PIF media articles since the collapse of OCV and if possible collate which newspaper they represent and a email contact? Also has anyone kept a current comprehensive summary of investor complaints/issues posted on the forum which can be submitted to the illusive IAC reps via the email provided by WC which I am prepared to submit on behalf of the PIF Action Group? If not is anyone willing to compile one on the forum or alternatively contact me by private message or email which can be added to? A lot of work is done by a few investors on behalf of many, who would appreciate some assistance if anyone has the time and skills to assist. Thanks in adavnce. Also thanks to those that do help out and continue to lobby ASIC etc with relevant information and complaints. Seamisty

 

[k.smith]

Re: Octaviar MFS Premium Income Fund PIF

A must read...

http://www.smh.com.au/business/real...y-train-of-management-fees-20100126-mwc8.html

Real estate investment trusts a gravy train of management fees January 27, 2010
Two recent inquiries have ignored problems with the structure, writes David Nunnerley.

The failures and disappointments of listed property or real estate investment trusts over the past two years have revealed shortcomings in their management fee structures.

The investment trusts represent a big investment sector but were clearly not on the radar of the Joint Parliamentary Inquiry into Financial Products and Services, chaired by Bernie Ripoll, or the Productivity Commission inquiry into executive remuneration.

The trusts are very different from corporations. The management fees in effect replace directors' fees,

which create real or perceived conflicts of interest between managers and investors.

Almost without exception, real estate investment trusts are marketed on the basis that management will use its skill in selecting properties for future acquisitions, lowering investment risk and providing growth. The motivation of the promoters and managers of the trust is presumably to build recurring management fees, as well as the capital value of the management business, which is determined by the value of funds under management.

This strategy creates an inherent conflict of interest. Adding to the size of the property investment portfolio may result in a dilution or slowing of the income generation of the property portfolio of the particular trust .

Besides any inherent conflict, some of the trust management fees are simply excessive. The detailed fee structures of the trusts vary, but operational and management costs are similar.

Operational costs covers the management of the individual properties - letting agents' fees, supervision of property maintenance, agents' payments of direct property expenses, property insurance, preparation of monthly income and expense statements, etc. These expenses are usually charged directly against the property income of the properties concerned to arrive at net property income. Management costs essentially comprise the cost of the administration of the real estate investment trust and typically include accounting, audit fees, preparation of management and unit holder reports, office costs, cost of compliance, legal fees, etc.

On top of these costs, a management fee is payable to the manager, usually expressed as a percentage calculated on the gross asset value of the trusts. These fees are recurring and represent fees for directing the trust involving strategy, review of budgets, instructing property managing agents, approving unit holder reports, etc. The costs incurred by the manager for providing these services would be only a small fraction of the fee.

It is this management fee, based on a percentage of the gross value of the trust assets, that provides a secure recurring cash flow for the manager. In some cases management fees are increased by incentive-related fees linked to index performance.

Some trusts also charge fees of up to 2.5 per cent on the value of any properties acquired, on the value of property sold and on the amount of loans raised. These fees can be severe, are usually capitalised to the value of the property assets acquired and typically not presented as costs in income statements.

Corporations law provides for replacement of trust managers. However, there are a number of trusts where the manager has been able to entrench its position with management contracts for up to 20 years. It is difficult to understand how such contracts can be considered to be in the investors' interest. Real estate trust management contracts are valuable assets, essentially developed at the expense of the investor.

At what level fees become excessive is a matter of subjective judgment. Payment of fair fees is expected to allow for the administration of the properties and the trust, but management fees that could be regarded as directors' fees are questionable and are conducive to exploitation.

Management fees are payable whether the trust makes a profit or a loss. A far more equitable arrangement would be for management contracts to be subject to periodic approval by unit holder resolution, rather like company director appointments. After all, the manager is a contractor, and many others would be willing to take on the job.

For this to happen, annual general meetings - no longer a requirement for the trusts - would need to be compulsory so unit holders would have a forum to question the performance of the manager. The Joint Parliamentary Inquiry into Financial Products and Services recommended that Australian corporations legislation be amended to state that financial planners hold a fiduciary duty to put the interests of their clients first.

For real estate investment trusts, the corporations legislation already includes similar provisions dealing with conflicts of interest between officers of the responsible entity on the one side and investor interests on the other.

Nonetheless, one cannot help questioning the effectiveness of

the legislation and the trusts' governance procedures.

David Nunnerley is an accountant.

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Nice Post. k.smith.

When you read that with Nick Nichols view that King "is still regarded in the industry as one of Australia's foremost authorities on funds management law", then it explains everything. We didn't stand a chance.

Rhetorical Q: How do we protect ourselves from another Sting like this?

Govt won't help us. They're more interested in making Oz a Finance Centre of the World. Which I read as: financial 'innovation' is welcome.

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Maybe the following article has a solution to the tax problem . ( Because of the crash of PIF many of us have had to return to work. Hence, any 'distribution' that isn't a 'capital return' (whatever those terms are supposed to mean) is likely to be taxed.)

This SMH by John Kavanagh (20Jan10) article mentions that Fund Managers can make withdrawal offers and call for withdrawal requests. I.e. Memebers can withdraw funds to the tune of 3c per unit. The article even goes on to mention fund managers offering 'rolling withdrawals' which are: "A single withdrawal request (for all or part of the investor's funds) will apply to all withdrawal opportunities in a 12-month period."

http://www.smh.com.au/news/business...1263663071854.html?page=fullpage#contentSwap2

Downside:

• You miss out if you don't file a withdrawal request. (Although WC could ameliorate this by putting some resources into chasing each individual down. Maybe Perpetual could actually do something for the approx $1million we pay em.)

• Less scrupulous individuals can attack WC because WC promised a 'distribution'. As opposed to a withdrawal. I think there's enough of us with common sense to shoot such disingenous tot down. (Lets just hope WC runs the gauntlet on our behalf for a change.)

Upside:

• Not taxable income.

• Some investors might actually choose not to withdraw their funds which means PIF stays that much stronger.

Anyone got any other downsides? If not we could all push it. How's that for an 'innovative financial solution' WC?

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

Maybe the following article has a solution to the tax problem . ( Because of the crash of PIF many of us have had to return to work. Hence, any 'distribution' that isn't a 'capital return' (whatever those terms are supposed to mean) is likely to be taxed.)

This SMH by John Kavanagh (20Jan10) article mentions that Fund Managers can make withdrawal offers and call for withdrawal requests. I.e. Memebers can withdraw funds to the tune of 3c per unit. The article even goes on to mention fund managers offering 'rolling withdrawals' which are: "A single withdrawal request (for all or part of the investor's funds) will apply to all withdrawal opportunities in a 12-month period."

http://www.smh.com.au/news/business...1263663071854.html?page=fullpage#contentSwap2

Downside:

• You miss out if you don't file a withdrawal request. (Although WC could ameliorate this by putting some resources into chasing each individual down. Maybe Perpetual could actually do something for the approx $1million we pay em.)

• Less scrupulous individuals can attack WC because WC promised a 'distribution'. As opposed to a withdrawal. I think there's enough of us with common sense to shoot such disingenous tot down. (Lets just hope WC runs the gauntlet on our behalf for a change.)

Upside:

• Not taxable income.

• Some investors might actually choose not to withdraw their funds which means PIF stays that much stronger.

Anyone got any other downsides? If not we could all push it. How's that for an 'innovative financial solution' WC?

Well, I'm guessing you guys really don't understand your tax position as a consequence of the listing, or, I'm wrong - and it could be either way.

I think you've all got a tax problem.

When you listed the fund, you 'divorced' yourselves from your capital.

If you don't want a problem with tax, then de-list the fund.

Shoot me if you like, but I'm just the messenger.

Danielle wrote a letter to Hutson sometime in early-mid December 2009 asking questions about tax, and as yet, no answer - now, doesn't that give you at least a hint that there might a problem?

Simple questions requiring simple answers, but no answers.

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

Well, I'm guessing you guys really don't understand your tax position as a consequence of the listing, or, I'm wrong - and it could be either way.

I think you've all got a tax problem.

When you listed the fund, you 'divorced' yourselves from your capital.

If you don't want a problem with tax, then de-list the fund.

Shoot me if you like, but I'm just the messenger.

Danielle wrote a letter to Hutson sometime in early-mid December 2009 asking questions about tax, and as yet, no answer - now, doesn't that give you at least a hint that there might a problem?

Simple questions requiring simple answers, but no answers.

I think what happened when you listed your fund, from a tax perspective, is that you isolated yourselves from your capital - the fund owes each of you nothing.

So, if it was to make a payment, there has to be some tax consequence (as I understand it).

If your fund wasn't listed, then you would entitled to make redemptions if the fund was liquid - but if not non-liquid then such a fund falls under the non-liquid provisions of the Corporations Act which means the manager would either make an offer or a payment (depending of the unit price regime).

The idea of the 'rolling redemption' was directed to non-liquid, but not damaged, managed funds - ones that are in good order with investors merely wanting their money back.

The PIF and PFMF are badly damaged non-liquid managed funds, and the 'rolling redemption' program certainly can't apply to them.

In the PFMF which is not listed, the manager will make payments to unitholders because the unit price is $1.00. In the PIF, members have to sell their units on the NSX.

Caroline Snow (of the manager PIF) wrote to Danielle and stated (among other things), "At this time we have not been provided with guidance in relation to whether the cash payment will be in the form of a capital return or distributions. This guidance will be given closer to the time that a payment is made to unitholders."

Clearly the manager can't make her mind up without 'guidance' - now, to my mind, that's should of concern to investors in the PFMF.

You guys just can't get money from your fund without some sort of tax consequence.

To my mind, it really is a matter that should resolved sooner than later.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

I think what happened when you listed your fund, from a tax perspective, is that you isolated yourselves from your capital - the fund owes each of you nothing.

So, if it was to make a payment, there has to be some tax consequence (as I understand it).

If your fund wasn't listed, then you would entitled to make redemptions if the fund was liquid - but if not non-liquid then such a fund falls under the non-liquid provisions of the Corporations Act which means the manager would either make an offer or a payment (depending of the unit price regime).

The idea of the 'rolling redemption' was directed to non-liquid, but not damaged, managed funds - ones that are in good order with investors merely wanting their money back.

The PIF and PFMF are badly damaged non-liquid managed funds, and the 'rolling redemption' program certainly can't apply to them.

In the PFMF which is not listed, the manager will make payments to unitholders because the unit price is $1.00. In the PIF, members have to sell their units on the NSX.

Caroline Snow (of the manager PIF) wrote to Danielle and stated (among other things), "At this time we have not been provided with guidance in relation to whether the cash payment will be in the form of a capital return or distributions. This guidance will be given closer to the time that a payment is made to unitholders."

Clearly the manager can't make her mind up without 'guidance' - now, to my mind, that's should of concern to investors in the PFMF.

You guys just can't get money from your fund without some sort of tax consequence.

To my mind, it really is a matter that should resolved sooner than later.

Mellifuous,PIF investors have been duped, it is not a well kept secret and we have initated legal procedures to adress this issue indepentantly from our current responsible entity, Wellington Capital. Your gripe is with FMF but we appreciate your concern with our current predicament, but please recognise that your personal issue is not with WC so do not expect PIF losers to take on board your advise if it is not relevant to PIF issues (of which we are waiting to disect). "give me some money", yeh right, it will only be a return of reduced capital,
and I am totally pissed off that on the long overdue return of a distribution(when and if) will not be made from growth/return!!! Wellington Capital from my perpsective has a lot to answer to. Unforunately, we are of no consequence, as demonstrated by the total lack of information re PIF update.
WC should prepare themselves for a investor backlash as a direct result of returning to PIF investors NOTHING. Seamisty

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

I think what happened when you listed your fund, from a tax perspective, is that you isolated yourselves from your capital - the fund owes each of you nothing.

So, if it was to make a payment, there has to be some tax consequence (as I understand it).

If your fund wasn't listed, then you would entitled to make redemptions if the fund was liquid - but if not non-liquid then such a fund falls under the non-liquid provisions of the Corporations Act which means the manager would either make an offer or a payment (depending of the unit price regime).

The idea of the 'rolling redemption' was directed to non-liquid, but not damaged, managed funds - ones that are in good order with investors merely wanting their money back.

The PIF and PFMF are badly damaged non-liquid managed funds, and the 'rolling redemption' program certainly can't apply to them.

In the PFMF which is not listed, the manager will make payments to unitholders because the unit price is $1.00. In the PIF, members have to sell their units on the NSX.

Caroline Snow (of the manager PIF) wrote to Danielle and stated (among other things), "At this time we have not been provided with guidance in relation to whether the cash payment will be in the form of a capital return or distributions. This guidance will be given closer to the time that a payment is made to unitholders."

Clearly the manager can't make her mind up without 'guidance' - now, to my mind, that's should of concern to investors in the PFMF.

You guys just can't get money from your fund without some sort of tax consequence.

To my mind, it really is a matter that should resolved sooner than later.

Mellifuous,PIF investors have been duped, it is not a well kept secret and we have initated legal procedures to adress this issue indepentantly from our current responsible entity, Wellington Capital. Your gripe is with FMF but we appreciate your concern with our current predicament, but please recognise that your personal issue is not with WC so do not expect PIF losers to take on board your advise if it is not relevant to PIF issues (of which we are waiting to disect). "give me some money", yeh right, it will only be a return of reduced capital,
and I am totally pissed off that on the long overdue return of a distribution(when and if) will not be made from growth/return!!! Wellington Capital from my perpsective has a lot to answer to. Unforunately, we are of no consequence, as demonstrated by the total lack of information re PIF update.
WC should prepare themselves for a investor backlash as a direct result of returning to PIF investors NOTHING. Seamisty

Seamisty, I don't have a personal 'gripe' - what you replied to related to the PIF, and I'm expressing my opinion to be helpful - whether people take my 'advice' is neither here nor there to me. I'm referring to correspondence relating to the PIF, not the PFMF.

Like it or not, listing a fund sets investors apart from their capital - after all, that's why managers work so hard to get investors to list, so the manager has unimpeded access to the pool of capital.

If you think about it, what would the advantage be to list the fund? There really are none for investors, only for the manager.

If the fund had remainded unlisted it would never pay distributions again - because distributions are only able to be paid from real profits, and certainly with the losses piled up in the PIF, that's not even remotely possible (same as PFMF). Any such 'distributions' would be no more than investors' own money paid as taxable income - it would be a breach of the tax laws if it happened.

But, once the fund is listed, its all a different story, because 'distributions' are able to paid - and yes, it's a return of part of one's own damaged investment as income, as Duped concurs. Doesn't the fact that one is able to be paid back one's own capital as taxable income tell one that the tax laws are suddenly treating one's situation very differently to when the fund was unlisted?

If a non-liquid fund is not listed, then any money returned (redemptions) is a return of capital. However, as far as I understand it, and what I was trying to be helpful about, is that such payments in a listed fund cannot be treated as a return of capital because investors are no longer entitled to that capital.

Why would the manager feel it necessary that W.C. should need to 'seek guidance' on such a simple matter as how to make payments to investors? Why isn't it a matter of open dialogue between the manager and investors?

Look, in the end, who is right and who is wrong will be proven by the facts as they fall before us over time. Of course, they could be proved more quickly with professional advice, and I'm not attempting for a micro-second to pretend to give you (and anyone else) such advice.

..

 

[charles36]

Re: Octaviar MFS Premium Income Fund PIF

On the subject of taxation everyone has a different problem and it is really for them to sort out. I think we are worrying prematurely about any return of capital, redemption or liquidation by stealth. It will be some time, in my humble opinion, before we see anything from Wellington Capital. Since Wellington Capital became RE it has been all smoke and mirrors,complaints and inquiries unanswered. Perhaps we should devote some of our time and energy and follow the developments of the Wollongong Hotel saga. The people who have possession of our property, you cannot really call it a sale, a $20 company have demonstrated to our RE the way the hotel should have been handled in the first place. Unfortunately the profits generated by our give away will not be ours. This matter deserves more attention from this forum. Any suggestions. My emails to the RE have been unanswered since April, 2009.