Wellington Capital PIF/Octaviar (MFS) PIF

[seamisty]

I see a few extra names in the Public Examinations to be questioned::


Mitch Craig (return) – 15-16 December 2010 – Sydney


Mark Kwei – 15-16 December 2010 – Brisbane (off Linkedin:: Director at Fortress Investment Group )


David Kelleher – 15-16 December 2010 – Brisbane (Chief Executive Officer
Fortress Investment Group not sure if he still holds this position))

Nick Slack – 15-16 December 2010 - Brisbane (??)


Seamisty

 

[selciper]

I wish the members of the PIF Investors Advisory Committee a restful Xmas break. After all, they must be exhausted after such a busy year working on behalf of us all.

 

[simgrund]

I wish the members of the PIF Investors Advisory Committee a restful Xmas break. After all, they must be exhausted after such a busy year working on behalf of us all.

A good opportunity to chime in.

Wishing everyone a truly Merry Christmas and a progressive New Year!
Be well dear Comrades.

 

[seamisty]

I wish the members of the PIF Investors Advisory Committee a restful Xmas break. After all, they must be exhausted after such a busy year working on behalf of us all.

Ah yes selciper, IMO the IAC was obviously another elusive shut up committee appointed by Wellington Capital hoping to demonstrate that 1 committment had been honoured. Pathetic really. Bring on PIFleaks!! HA HA, now that could make interesting reading?? The scary thing for Wellington Capital is that I am told there is still a few unit holders that still have a bit of charge left in their gopher batteries!!

Seamisty

 

[LTD]

http://business.scoop.co.nz/2010/12/09/sfo-charges-capital-merchant-founders-nicholls-douglas/

SFO arrests, charges Capital + Merchant founders Nicholls, Douglas
By Paul McBeth

Dec. 9 (BusinessDesk) – The Serious Fraud Office has arrested and charged the founders of Capital + Merchant Finance Ltd. alleging misuse of funds raised to develop property in Palmerston North.

In its second swoop today, the white collar crime investigator charged director Neal Nicholls and former director Wayne Douglas with misusing some $14.5 million of funds raised to convert two Palmerston North office blocks into student accommodation. The charges relate to one set of transactions, and the SFO is continuing to look at other deals done by the lender that once sponsored TV One news.

“While we have completed investigations into these matters, the SFO is continuing to investigate a number of other transactions that are of serious concern to us,” chief executive Adam Feeley said in a statement. “This investigation and the subsequent charges demonstrate the speed with which the SFO can act, even where the case is one of significant complexity and involves many millions of dollars.”

The SFO was called in to probe the lender’s books in March by first receiver Grant Thornton, which is acting for prior ranked creditor Fortress Credit. The Capital + Merchant group of companies called in the receivers in November 2007 owing some 7,000 investors about $167.1 million, and was put into liquidation in December last year.

Nicholls, along with other C+MF directors Owen Tallentire, Colin Ryan, and Robert Sutherland face criminal charges and civil proceedings from the Securities Commission over the way they promoted their debenture stock to investors. Douglas only faces criminal charges from the commission.

The SFO has laid criminal charges against people involved in a number of well-publicised finance company failures, including National Finance, Bridgecorp, Five Star Finance."
*************************
and more details here

http://www.sharechat.co.nz/article/ce128521/capital-merchant-directors-face-sfo-charges.html
From my recollection...
C&M was put into administration after a court case in Nov 2007 by Fortress..
MFS NZ? owned Vestar which invested in C&M...

 

[marcom]

Octaviar scrutiny goes on and on
Nick Nichols, business editor December 11th, 2010
http://www.goldcoast.com.au/article/2010/12/11/276071_gold-coast-business.html

THE public examination into the collapse of Gold Coast financial services group Octaviar shows no sign of letting up with proceedings moving to Brisbane for the first time next week.

The probe by liquidator Kate Barnet, of Bentleys Corporate Recovery, has been conducted in Sydney over the past eight months.

The purpose of the investigation is to determine when Octaviar, formerly known as MFS, became insolvent.

Among the examinees to have already appeared this year are company founders Michael King and Phil Adams, although much of the investigation has centred on evidence from former company secretary David Anderson.

This time around, two existing and one former executives at Fortress Credit will be under the spotlight when the examination resumes in Brisbane for two days on Wednesday and Thursday.

Fortress Credit chief executive David Kelleher and fellow director Mark Kwei will take the stand, as well as former executive Nick Slack.

Former MFS auditor Mitch Craig of KPMG is being probed in a separate session in Sydney on the same days.

Fortress Credit was the major financier to MFS at the time of its collapse in 2008 and was owed about $150 million.

The US-based giant appointed receivers to the company in September 2008, just after it had been placed into voluntary administration.

It is likely some of the questioning will centre on the events leading up to Octaviar's repayment of about $100 million to Fortress in 2007.

It is unclear why proceedings have been moved to Brisbane and whether the proceedings will involve input from the Public Trustee of Queensland which succeeded last year in wiping Fortress Credit's status as a secured creditor to Octaviar.

The High Court reversed that decision in September and at the same time voided the original judgment that created uncertainty over lenders' rights to security of assets.

Octaviar, which has debts of more than $2.5 billion, still has a honey pot of about $140 million in cash.

Many argue it is this cash kitty that has extended the examination of the company's affairs beyond that of other corporate failures."

Who are the "MANY" - your white shoe brigade mates?

 

[simgrund]

Some more huffing and puffing from ASIC; but our gen unlikely to see "ONE STRIKE and you are out" reform.

http://www.smh.com.au/business/four...h-to-ban-serial-offenders-20101210-18ste.html

Four strikes and you're out: regulator in push to ban serial offenders
Adele Ferguson
December 11, 2010

THE corporate regulator is lobbying for law reform to give it powers to automatically disqualify directors who have been involved in four or more failed companies over a seven-year period.

If the law is changed it would increase the number of directors banned each year and reduce the amount of phoenix activity.

Under the current law, the Australian Securities and Investment Commission can seek to ban a director who has been on the board of two or more failed companies and a liquidator has lodged a report regarding the corporation's inability to pay its debts. A notice is served and the person then has the opportunity to demonstrate why they should not be disqualified.
Advertisement: Story continues below

Introducing automatic disqualification provisions to include directors involved in four or more company failures where a section 533(1) liquidator report has been lodged for each of those companies would remove those directors without having to go through the disqualification process.

Directors so disqualified would have a right to apply to the court if they sought to continue, or wished to commence managing a company during the disqualification period.

ASIC's senior executive leader of real economy, Kathrine Morgan-Wicks, told BusinessDay that the regulator was talking to Treasury about further law reform to enable it to automatically ban a director rather than wait to receive a report from a liquidator. It is then up to the government to act on it.

But it is a balancing act between banning directors that are serial offenders of failed companies and not deterring entrepreneurship.

Ms Morgan-Wicks said in the past 12 months ASIC had increased its focus on director disqualifications, including creating a new compliance and deterrence team of up to 35 people to focus on the small to medium-sized business sector, which is where most illegal phoenix activity occurs.

Phoenix activity is a practice where a business closes down one day and re-opens the next with a different name to avoid paying its obligations to unsecured creditors. "We are very serious about tackling phoenix activity," she said.

She said in 2009-10 ASIC banned 90 directors - an 80 per cent increase on the previous year when 49 directors were banned.

She said ASIC was determined to clamp down on phoenix activity but it would help if there was reform in taxation and corporation law.

"Using the existing mechanisms we are pushing them strongly, and have seen an increase in director disqualifications. That sends a strong message. People take it seriously," she said.

ASIC has a three-pronged approach to phoenix activity, including a liquidator assistance program, director disqualification and an investigations program.

 

[seamisty]

http://inaudit.com/audit/former-sec...dit-committees-role-after-allco-debacle-2736/

Former Securities Officer Calls for Revamp in Audit Committee’s Role After Allco Debacle
Lucas Gilmore, “Big 4″ observer December 08, 2010 / Alarmed by the recent failure of a KPMG auditor to properly report the accounts of Allco Finance Group, a former head of the Australian Securities & Investments Commission (ASIC) called for a reform in the way audit committee does its job, including a more transparent reporting and an deeper assessment of a company’s business.

Lee White, Institute of Chartered Accountants (ICA) executive general manager and a former ASIC chief, said that although Australia has seen lesser fallouts of the global financial crisis, the issue on the role of the audit committee to forecast risks to the business model has become more crucial in a time when the audit profession needs enhancement and closer look.

White recommended inclusion of the business model in assessing a company’s account in addition to its financial statement, with view on how debt funding in particular may impact that model. In this case, White added, auditors’ activities within companies must be included in the annual reports to enable transparency in how they carry out their role, giving investors and analysts an overview of the audit committee’s function.

This recommendation, according to White, would also enable the audit committee to establish priorities on where it should devote much effort and time assessing a company’s financial statement. “They could answer the plain question: 'what did you use to understand the valuation?' “ he said.

The Treasury solicited in March recommendations on how to increase the profile of the audit committee through new legislations. In its consultation paper, the Treasury raised the point of stipulating in the Corporations Act the role of the audit committee as part of S&P/ASX All Ordinaries Index requirements for all companies.

 

[simgrund]

Some more of the "phoenix" mavericks whom ASIC wants to limit to 3 or less strikes:

Relevant tidbit:
"...Concern mounted when it was revealed that the directors of Freshwater Village Developments, Joseph Nakat and Roberto Bucci, as well as four directors of its holding company, Spar Capital Nominees, were on the boards of some of Australia's biggest corporate collapses, including Allco Finance Group, Lift Capital and Basis Capital, whose combined losses total more than $1.1 billion."

http://www.smh.com.au/nsw/it-takes-a-village-to-beat-a-developer-20101210-18swy.html

 

[selciper]

As is often observed, if American fraudster Bernie Madoff had operated out of Australia, he’d probably still be out and about denying any wrong-doings. One of today’s news items about him describes the possibility of an Austrian banker having been involved in the scam. She denies the innuendo.

http://dealbook.nytimes.com/2010/12/10/madoff-trustee-seeks-19-6-billion-from-austrian-banker/

 

[simgrund]

As is often observed, if American fraudster Bernie Madoff had operated out of Australia, he’d probably still be out and about denying any wrong-doings. One of today’s news items about him describes the possibility of an Austrian banker having been involved in the scam. She denies the innuendo.

http://dealbook.nytimes.com/2010/12/10/madoff-trustee-seeks-19-6-billion-from-austrian-banker/

And his elder son would not have hanged himself this week. Poor lad, for father's sins.

 

[selciper]

Simgrund - the Madoffs of this world don’t give a wit about anybody. They ruin the lives of their own families, friends and others who put their trust in them. It’s an unstopable money addiction that drives them to this ruthlessness.

 

[seamisty]

Litigation shaping up to be an area of intense activity
Angela Pearsall From: The Australian December 13, 2010 12:00AM

extracts from article::
LOOKING into the crystal ball for 2011 and beyond shows litigation is shaping up to be an area of intense activity.

Some of the biggest corporate names will be in the spotlight as legal boundaries are tested by the many reforms and regulations introduced over the past year. The pressure is going to be on.


Australian corporations and directors should also brace for increased regulatory activity from both the corporate watchdog, the Australian Securities & Investments Commission, and the Australian Competition & Consumer Commission, because of the widening of their enforcement powers in the past 12 months.

ASIC, in response to widespread criticism, has announced that it will move with increased speed and efficiency in its management of major litigation and investigations, in order to achieve maximum deterrent impact.


While 2010 was the year of new reforms and regulation, 2011 will be the year of implementation, as regulators prepare to strike and courts define boundaries. In the meantime, the pressure is on companies and directors, not only in ensuring they comply with the new rules, but also in preparing themselves for the onslaught of investigations and litigation just around the corner.

Full Article:: http://www.theaustralian.com.au/bus...intense-activity/story-e6frg9if-1225969801475

 

[Duped]

Simgrund - the Madoffs of this world don’t give a wit about anybody. They ruin the lives of their own families, friends and others who put their trust in them. It’s an unstopable money addiction that drives them to this ruthlessness.

Doing God's work?

"I'm doing God's work" Loyd Blankfein, November 2009 as CEO and Chairman of Goldman Sachs

Octaviar scrutiny goes on and on
Nick Nichols, business editor December 11th, 2010
http://www.goldcoast.com.au/article/2010/12/11/276071_gold-coast-business.html

... Fortress Credit was the major financier to MFS at the time of its collapse in 2008 and was owed about $150 million. ...

Many argue it is this cash kitty that has extended the examination of the company's affairs beyond that of other corporate failures." ...

"the major financier" That's quite a reckless statement Mr Nichols. What were you leading your readers to believe? Your paper is hardly the Financial Review or even The Australian so you have no basis to argue your readers know what 'major' and 'financier' mean to anyone above a novice reader. Fortress ranked behind $ owed to PTQ's unit holders and PIF and barely in front of Challenger. (Probably even behind OPI Pacific too)

"Many argue ..." Who? The couple who runs the local fish & chip shop? Anyway, what are you trying to lead your readers to believe? Company failures almost never go court if there's no recoverable money left to fight over. (You can quote me on that.) So what's your point?

 

[selciper]

If anyone is interested in the Madoff story, this CBS 60 Minutes segment produced soon after his arrest is interesting - especially the many references to the regulator's role.

http://dailybail.com/home/bailout-the-sec-complete-interview-of-harry-markopolos-on-cb.html

 

[marcom]

Talking of Madoff, there seems to be an Australian recent case where ASIC actually did something!! This is from the Bronte Capital blog site. Follow some of the highlighted links for the full picture - you will need to go to the link to do this.

Bronte Capital

There is a big world out there

Wednesday, December 8, 2010
Shawn Richard of Astarra enters a guilty plea

Just over a year ago I wrote a letter to regulators detailing a fraud at an Australian fund manager (Astarra/Trio Capital). This was the Bernie Madoff of Australia. (This required no special genius on my part. I was tipped off by a blog reader.)

The regulator closed Astarra within a month. I have no complaints.

I wrote up part of my thinking for this blog.

But until recently no charges were laid and I was getting increasingly frustrated. I even wrote a (slightly) complaining letter to ASIC (the Australian regulator) only yesterday.

But the Australian regulator rocks! Shawn Richard (the principal malefactor) was charged - entered a guilty plea and will go to prison (probably for five years).

I want to acknowledge the press. The Sydney Morning Herald has kept the story alive with accurate and hard-hitting reporting. The (financial) decline of newspapers is not a good thing.

ASIC has set a standard for the SEC to emulate.

Prosecutions are important. Many thousands of people have lost their life savings in this mess. A strong regulatory response will reduce the chance of repeat problems.


John
Posted by John Hempton at 3:28 PM 11 comments

 

[marcom]

I forgot to post this apologist piece from Nick Nichols on the nasty media coverage given to the Gold Coast white shoe brigade. Particularly see the section from the highlighted line below:

Trite Gold Coast comments irksome

Nick Nichols, business editor | December 1st, 2010

http://www.goldcoast.com.au/article/2010/12/01/274291_nick-nichols-opinion.html

I'M SICK of it, over it and done with it.

The media hacks who have no idea what they are talking about and do nothing but regurgitate old news and jaundiced views of the Gold Coast are getting away with murder.

The tourism strip and its colourful business profiles are the inevitable target of "tsk-tsk" commentary after three years of economic downturn that sees no sign of abating.

Cartoons depicting white shoes, gold teeth and Hawaiian shirts abound in this fantasy land created by journalists whose only interest in the Gold Coast is a holiday with the wife and kids or a booze-up and punt with the lads once in a while.

Even worse are the commentators who have not even been to the Coast, yet who still write about it as if they know it intimately.

Take the bright spark at The Australian a few years back who wrote a caption under a photo of the Surfers Paradise skyline looking east. The caption read: "The Gold Coast, with Brisbane in the background".

Aaarghhh!
Have your say on the feedback form below

This is the calibre of people telling the world what a bunch of duds we are on the Gold Coast, giving little thought to the fact that the Coast is no different to any other business environment -- except that it is possibly more challenging than most.

I switched on Sunrise the other morning to see Kochie and the editor of BRW having a go at Craig Gore and Matthew Perrin -- two guys who had a lot but lost it all through "irrational exuberance", to use the words of former Fed chairman Alan Greenspan.

Kochie called Gore a bankrupt, but that was way off the mark as he has just secured a deal with his creditors to avoid bankruptcy -- possibly the biggest Part X agreement in Australian history.
Your Say

"The coast is expensive yet very tired, Surfers is trashy and dirty, only has its name to live by. If we rely on tourism, entrepreneurs keep the place ticking over with new ideas and programs.Govt lack of spending on infrastructure is now coming to a head"
waddy

The BRW guy also described Perrin as founder of Billabong -- I'm sure Billabong and Gordon Merchant would have something to say about that.

Out of all Australians who have lost the lot over the past three years, this was the best they could do -- a couple of Gold Coasters.

Of course, they also took a swipe at Jodee Rich, declaring he was a target for action by the corporate watchdog. But they failed to mention that ASIC's case fell in a heap this year.

This is not about defending anyone in particular, but it is most definitely about defending the Gold Coast.

Trite commentary makes a mockery of how tough it is to do business on the Coast, often seen as a Nirvana of riches by southerners.

Not much press, for example, has been given to Mick Bezzina.

Who's that you ask?

That's precisely my argument.

He was the Sydney whiz-kid who came to the Coast to create one of the most luxurious apartment projects seen on the strip, the $100 million Jade development .

After it all went belly-up in 2008, Bezzina faded into obscurity in Sydney and has since structured a Part X agreement with his creditors to avoid bankruptcy.

Of course, he's from Sydney, so nobody cares.

Online posters to this column please note.

This is not a defence of wayward business practices, just a defence of the Gold Coast and its reputation.

We should not take this easybeat target lying down.

If you think you have lost money to shysters, then you need to hear my story as well.

Yet I am still all for the entrepreneurs that keep this city alive and kicking.

The gleeful schadenfreude that goes with the reports on Gold Coast business failures is an insult.

 

[Duped]

That's gold marcom. A News Ltd reporter having a go at other reporters. The pen supplants and is mightier than the sword does then he who lives by the pen can die by the pen.

 

[marcom]

Duped, I posted a comment on thIs GC Buletin Opinion piece nearly two weeks ago and Nichols has not published it or any other critical comments either. For the record I posted "This type of opinion is nothing more than a self-serving apology for a bunch of crooks who have defrauded tens of thousands of investors of their life savings - that's why the Gold Coast has over many years earned a very low reputation for honesty! When you burn that many investors they don't come back, and this is the real reason why the Coast is viewed so poorly"

 

[seamisty]

Duped, I posted a comment on thIs GC Buletin Opinion piece nearly two weeks ago and Nichols has not published it or any other critical comments either. For the record I posted "This type of opinion is nothing more than a self-serving apology for a bunch of crooks who have defrauded tens of thousands of investors of their life savings - that's why the Gold Coast has over many years earned a very low reputation for honesty! When you burn that many investors they don't come back, and this is the real reason why the Coast is viewed so poorly"

Marcom, Duped, I gave up leaving comments with the Gold Coast Bulletin ages ago!! Even though I considered them honest and justified, if they remotely looked like drawing attention to any of the alleged MFS/Octaviar dishonest bunch of crooks they were NEVER published!! I would't mind a dollar (make up for losses incurred from Gold Coast crooks posing as fund managers!!) for every time someone has said to me they would't touch any investment with Gold Coast connections with a barge pole as the place is crawling with crooks. A reputation like that is earnt not invented!! Seamisty