Wellington Capital PIF/Octaviar (MFS) PIF

[seamisty]

An interesting article in the Courier Mail. I wonder if it was a case of Equtitrust CEO (previously MFS) David Kennedy not being able 'to recall' or simply 'relying too heavily' on David Anderson (previously MFS). Regardless, it apears Equititrust Fund has big problems of its own!!

http://www.couriermail.com.au/ipad/financier-in-strange-web-word-fight/story-fn6ck2gb-1226013110857

TROUBLED Gold Coast financier Equititrust says it is the victim of a cyber smear campaign and has gone to the extraordinary lengths of hiring a specialist private investigator.

The company has been attacked through investor website Aussie Stock Forums in recent weeks after criticism over its frozen $240 million income fund was aired.

A spokesman for Equititrust said fake emails purporting to be from the company had been sent to borrowers, investors and other contacts, prompting it to take action.

"Earlier this week an electronic fraud detection consultant was engaged to investigate such matters," the spokesman said on Thursday.

In an attempt to address the "erroneous allegations" being made on Aussie Stock Forums, it was understood Equititrust staff began posting positive comments about the company on the website.

Chief executive David Kennedy was personally attributed as one account user.

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However, the website administrator suspended that account, called "Equititrust", along with two other accounts, for breaching the website's terms of use because they operated from the same computer terminal.

"Equititrust is aware that numerous staff have accessed the ASF (Aussie Stock Forums) website," a spokesman said.

"Several of these staff are also investors in Equititrust and, as long as no confidential information is disclosed, Equititrust has no objection to them participating in such sites."

Those accounts included the usernames Buffettman and Ozab.

In mid-February, Ozab posted: "Read the rubbish from some posts go Equititrust ignore them!!!!!!!".

Meanwhile, someone with the username Buffettman wrote: "Makes me think that Mr Kennedy is right when he suggested you are probably disgruntled borrowers rather than investors if you haven't called him.

"I think it's high time you guys either put up or shut up as your apparent malicious conduct has the potential to cause damage to us genuine investors."

An Equititrust spokesman said the company hoped to see "greater regulation and surveillance of sites like Aussie Stock Forums to avoid situations where companies and individuals are forced to take extreme measures to defend themselves".

It comes as the company acknowledged it had made large loans to a two-time former bankrupt on Gold Coast property deals.

Mr Kennedy was not employed by Equititrust when the deals were made.

The company was owed about $60-$70 million dollars from companies linked to Dudley Quinlivan after those companies Croftworth Property Holdings (No.1 and No.2) were placed in administration.

Despite those troubles, the company is understood to have reassured investors that it should return to liquid status this year.



Here is the link to the Equititrust thread on Aussie Stock for anyone interested.

https://www.aussiestockforums.com/forums/search.php?searchid=99721

Seamisty

 

[Duped]

.... We investors who are lucky enough to be below pension age, who have worked hard all our lives, are back to working double shifts ...

Yep: paying taxes, producing GDP and helping solve the problem of an ageing population. Can't you all see how much ASIC is like a front to help the finance sector to prise open our wallets. All this blah blah about independent retirement: it's all pretend.

Just remember that all those Commonwealth Public Servants who come up with this superannuation fanancial regulation for us: their money's not in it. Their money is all safe in defined benefit schemes.

It always reminds me of a line in Black Adder The Third:

Edmund: [to the old man standing near them] Excuse me, could you move along please. Look, I'm waiting for my father in law. Last thing I want is some scruffy old beggar blocking the church door, smelling of cabbage.
Father: I am your father in law.
Edmund: Oh no... All right, how much you want to clear off?
Kate: Edmund, how could you? He's my father, my only living relative.
Father: Ten pounds should do the trick.
Kate: Father!
Edmund: All right, there we go.
Kate: Edmund, you mustn't!
Edmund: No, don't worry, I'll get Baldrick to beat him up after the ceremony. We'll get the money back.

 

[selciper]

Seamisty, the letter to Nick Nicholls is first rate. (According to Crikey, the GCB isn't doing too well at present.)

I did a tour of the "new" Wellington website. The dedicated PIF page isn't very appealing. I did bump into smiling photos of Wellington board members Jennifer Hutson, Robert Pitt and Mary-Anne Greaves. Why were they smiling? I wonder.

 

[Duped]

Quite a fluctuation on the NSX, when on one day there is a sale at 6.7c and another sale at 8c. What causes that? Is it just luck for someone?

Perhaps Mary. The pattern of trading suggests to me that the buyer made a mistake. Either way, it's only a small volume.
25 Feb: 19,882 units @ 8c
24 Feb: 19,882 units @ 6.7c
23 Feb: 19,882 units @ 6.7c
22 Feb: 20,882 units @ 6.7c
I speculate that we have had only one serious buyer for a long time. I.e. an opportunist buyer.
If so, then Hutson is warning us against selling to the opportunistic ALF while at the same time exposing us to an opportunist on the NSX. I'd love to know what's really going on.

But hey, in the December Investor Update Hutson reported a High price of 7.5c. Next Investor Update, she'll be able to report a high of 8c. Did anyone notice the scale on the left side of the chart in the last report. Very "innovative".

 

[selciper]

This is a pretty interesting article about the thoughts of a major fraudster - Bernie Madoff. (Hot off the international press).

http://www.nydailynews.com/ny_local..._nightmare_calls_victims_greedy_i_am_a_g.html

 

[Duped]

This is a pretty interesting article about the thoughts of a major fraudster - Bernie Madoff. (Hot off the international press).

http://www.nydailynews.com/ny_local..._nightmare_calls_victims_greedy_i_am_a_g.html

Wow. Feels a bit like what Wayne Swan said about us PIF investors. Madoff calls his investors greedy. Whereas Swan said we "[FONT=&quot]made an investment in a market linked investment proposal which didn't have the security that an investment in a APRA regulated institution would have because they were looking for higher returns and sadly the worst has happened.[/FONT]". Not that different really is it?

OK, so say Madoff's clients (namely the feeder funds) were complicit. But what about their clients? I.e. the investors who put money into the feeder funds? Were they being sold a line?

Drawing a comparison between Madoff and PIF would mean that in here inOz, Madoff's Clients were akin to ...... ASIC's AFSL financial advisors. Wouldn't it? Stripped to the basics, our commission remunerated financial advisors are like Madoff's feeder funds. I.e. we paid them a % of our investment to do all the work for us so we can concentrate on being a better doctor, nurse, farmer, roofer, carpenter, scientist, statitician, actor, musician, etc.

 

[marcom]

In the Brisbane Supreme Court today:

FORTRESS CREDIT CORPORATION (AUSTRALIA) II PTY LTD -V- OCTAVIAR ADMINISTRATION PTY LTD
Justice Philip McMurdo
Court 9
Floor 2 Not Before 11:00 AM
(Application)

Looks like last weeks application rewriten and submitted again.

 

[seamisty]

In the Brisbane Supreme Court today:

FORTRESS CREDIT CORPORATION (AUSTRALIA) II PTY LTD -V- OCTAVIAR ADMINISTRATION PTY LTD
Justice Philip McMurdo
Court 9
Floor 2 Not Before 11:00 AM
(Application)

Looks like last weeks application rewriten and submitted again.

Stalling exercise Marcom?

 

[marcom]

Stalling exercise Marcom?

Yes I'd say so. They don't want any more examination exposure as it will weaken their defence against the Statement of Claim to be served on them by the Liquidator. A draft of the SoC was tendered in Court late last year when they sought to avoid more examination. Presumably the SoC seeks to have the funds paid to them returned to the Liquidator. This application is being heard by J McMurdo. Perhaps they think that he, as the principal trial judge on the MFS/Octaviar matter, may reach a different conclusion to J Fryberg.

Fortress may have won the High Court case which confirmed their secured status as a creditor, but if the Liquidator finds that MFS/Octaviar was trading as insolvent from as early as March 2007 that secured status may be in jeopardy.

 

[Duped]

Marcom. Perhaps Fortress think they can use the HC decision and the Banking and Finance Industries' reaction to McMurdo's decision to humble McMurdo.

The bottom line in my lay observer opinion is that the HC has left the door open ("and any terms which may be implied in fact") and that the McMurdo decision was less objectionable to the policy of Ch 2k.

Well may they say: this is the law now. I say: not necessarily. The following line of argument doesn't appear to have been presented to the HC. Hence, the HC's view expressed in para 32 might be change: "[t]here is nothing objectionable to the policy of Ch 2K that notice of the January 2008 Deed was not required to be lodged where the particulars lodged for registration adverted to the possibility of its existence".

I ask: isn't it objectionable if the conduct of OCV and/or Fortress advertised to the market that it was unlikely that the January 2008 Deed existed?

The legislation says, we'll give your debt seniority if it's registered with ASIC. You don't even need to have a written agreement between lender and borrower. Just tell us a little bit about it so that our register will warn everyone that they need to do some research AND where to start the research. The government's ASIC is saying: whether it's a verbal agreement or a written agreement that you're informing the market about - WE DON'T CARE. You just have to put some details on our searchable register.

But the HC is effectively saying: this is not always the case. The HC says it DOES CARE about how the debt is created. I.e. if there's one of these 'all monies securities' in place, then the genesis of the agreement DOES MATTER. I.e. it doesn't matter if you have and continue to tell the market that a debt is unsecured, the HC is going to give preference to the written word in a secret document over your contradictory public CONDUCT in the market. A secret document is given preference to contradictory public CONDUCT. Well, I'm rather certain that ASIC will find that objectionable. Objectionable enough to change the legislation even?

The government is saying that CONDUCT DOES matter. The government is saying, meh, same diff to us - conduct has equivalent footing as a written document. The important thing is an informed market. Just give us some details for our little register. And the HC did not explain why it gave preference to secret written words over public conduct. Despite ASIC indicating that conduct has equivalent footing to a written agreement. The right of seniority was created by parliament. So parliament's objections count right. Including parliament's commissions.

IMO the HC's decision has resulted in an outcome contrary to what the legislation set out to achieve. I.e. that registration should create greater clarity. The HC decision has stamped a smiley face on complexity that the legal fraternity created at their own peril. Objectionable?

The HC even openly criticised the drafting technique of shifting the meaning of a pivotal definition to another term not found in the charge. Remember that these 'all-monies' charges are a creation of the market, not the legislation. The HC says: tough.

Additional reasoning is in para 25: "This, as Muir JA noted, would be an unlikely and unattractive result." Yes I agree, for an untainted 'increase in liabilities'. Banks could continue on their merry way lending more money to their borrowers, providing for early redemption fees or automatically increasing interest rates without any Ch 2K registration requirements. So long as they haven't previously written, informed or 'implied in fact' to the market that such variations are unsecured. Neither of the examples given by Fortress' Counsel in para 25 would normally ever be adverted as being unsecured. How much a burden on business would it really be to inform the market, via s268(2) that a debt that previously adverted as being unsecured has now become secured. ASX listed companies have to do it anyway don't they (continuous disclosure)? Hence Muir's 'unlikely and unattractive result' can still be avoided in a ruling against Fortress.

Would this create an opportunity for mischief by borrowers? Well, like the details of the agreement, that's between the borrower and lender to arrange between themselves. A suitable defaulting clause should provide the requisit disincentives.

The HC still has room to move to distinguish itself from this decision. Either that, or ASIC's website hasn't guided me very well.

 

[seamisty]

The Sydney Morning Herald http://www.smh.com.au/money/super-and-funds/consumers-vulnerable-20110301-1bcbb.html

Consumers vulnerable John Collett
March 2, 2011



After its patchy record in protecting small investors, it is a fair question to ask whether it is time to reform the Australian Securities and Investments Commission (ASIC).

The regulator is supposed to protect investors while facilitating and promoting the financial services industry. These two functions are incompatible within the same organisation. It has led to a split personality and a clash of cultures within the regulator. The government keeps loading the regulator with more responsibilities, which is diluting its effectiveness in carrying out each of its functions.

In particular, it is time to ask whether the consumer protection function needs to be separated from the regulator's other functions. And whether such a body should be headed by someone with a record of success in enforcement.

Advertisement: Story continues below That's what is occurring in Britain with the Financial Services Authority, which will be disbanded. It will be replaced by a Financial Conduct Authority and another body that will monitor the banks and insurers. On the face of it, that does not look very different to what we already have in Australia with the Australian Prudential Regulation Authority supervising the banks and insurers and other deposit-taking institutions. The big difference, however, is in the new powers the Financial Conduct Authority will have.

It will have the power to ban dangerous investment products and will be able to tell the public about pending enforcement actions against financial services organisations and individuals. These are powers that ASIC does not have. The move comes after the spectacular failure of ''light-touch'' regulation in Britain.

Politicians here see the move as too radical. There was much backslapping and self-congratulation among officialdom after it become apparent that Australia was to be spared the worst of the financial crisis. Our regulators were credited with doing a good job.

However, there were tens of thousands of victims, mostly retirees, of poor or dodgy investment schemes and financial advice extending further back than just the past few years. The apologists for the big end of town tend to apportion most of the blame to the victims - saying it's the investors' fault if they get caught out and should not expect regulators to come to the rescue. That's nonsense. The losses experienced by small investors have not come about just because of market crashes, or because they were ripped off by someone operating outside the law. The losses have come because of shonky operators who have been licensed by ASIC and have been operating right under the regulator's nose.

Australia remains the wild west of ''innovative'' financial products - fee-laden, opaque products that never should be allowed anywhere near small investors. There is absolutely nothing stopping anyone, for example, from gaining a financial services licence and then putting investors' money on the big wheel at Crown or Star City Casino.

In theory, how the money is being invested is supposed to be disclosed to investors but in practice the regulator only ever checks a tiny proportion of disclosure documents and then usually only when the money has already been lost.

Finance is a global business. Unsavory operators will gravitate to the international jurisdictions where the regulatory bars are set the lowest. The very significant increases in consumer protection that is occurring not only in Britain but also the US will only increase the attraction of Australia's small investors to the sharks of the global financial services industry.

 

[lawry1dog]

Looks like after all this time, the Class Action has probably finished now and it is sad to see nothing has come of it.
The instigators of this Class Action should now take some responsibility for this non event and giving us a false sense of hope.

WC should now liquidate the fund and give us some of our money back. Would that be 8c in the dollar. I do not think WC should NOT be earning a living off our demise,
and she should have the fund finished up.

 

[selciper]

Looks like after all this time, the Class Action has probably finished now and it is sad to see nothing has come of it.
The instigators of this Class Action should now take some responsibility for this non event and giving us a false sense of hope.

WC should now liquidate the fund and give us some of our money back. Would that be 8c in the dollar. I do not think WC should NOT be earning a living off our demise,
and she should have the fund finished up.

Lawrydog, please back your claimed information with evidence. What you are saying is very serious.

 

[charles36]

Lawry Dog, I am sorry you have not been able to get correct information before making your post. As one of the original unit holders who put their name down as an applicant on behalf of all unit holders and in addition contributed to the initial expense I feel somewhat at a loss to understand your comment. The class action is proceeding along very well, thank you. The delay is caused not by the instigators but by legal argument that normally happens in such cases. I have reason to believe a statement will be issued in the near future as to the developments in the case. I would suggest with great respect, before making such a statement in future you contact the Litigation Funders who would be well known to you, for correct and up to date information.

 

[marcom]

Marcom. Perhaps Fortress think they can use the HC decision and the Banking and Finance Industries' reaction to McMurdo's decision to humble McMurdo.

Duped, I totally agree, but I'm not sure that will help them in the end though. If you read the RE: OCTAVIAR ADMINISTRATION PTY LTD [2010] QSC 486 decision you can see how desperate they are to avoid a looming legal stoush:

"They point also to the evidence that it is intended to bring proceedings against Fortress in respect of money identified in a draft statement of claim, which has been prepared on behalf of the respondents. The applicants submit that the evident predominant purpose of the examination is to garner evidence for those proceedings, to cross-examine in relation to them or to destroy credibility and that this is not a permitted purpose within the meaning of the legislation."

The threadbare lines of defence they advanced to be spared the opressive inquisition by the dreaded LIquidator include these gems:

"They further submit that the matters to be the subject of cross-examination have already been the subject of cross-examination in other proceedings and that it is not functionally helpful for further cross-examination to be carried out and is oppressive to the applicants...

Finally they submit that oppression can also be inferred from the fact that the examination is to be conducted in Brisbane and the applicants will be required to travel to Brisbane from Sydney..."

Justice Fryberg did relieve Fortress of one part of the summons: "The summonses required the respondents to produce documents in addition to attending for examination and required that to be done not less than five days prior to the examination. I have already made orders relieving the respondents of the obligation to comply with that part of the summonses. It is, I think clear, that s 596D(2) permits a summons to require production at the examination, not before it.

Faced with a court decision copelling attendance for further examination, Fortress are probably seeking to be relieved of the obligation to produce the nominated documents - documents which could prove detrimental to their defence of the Sataement of Claim. This may be the basis of the current application.

As to the HC, it seems to be the modus operandi to find on narrow grounds (and narrow interpretation of legislation) to allow the courts enough "wriggle room" for future statutory interpretation. However, in the end it always seems that the big end of town benefits.

 

[lawry1dog]

Lawrydog, please back your claimed information with evidence. What you are saying is very serious.

I did say probably.

 

[lawry1dog]

Lawry Dog, I am sorry you have not been able to get correct information before making your post. As one of the original unit holders who put their name down as an applicant on behalf of all unit holders and in addition contributed to the initial expense I feel somewhat at a loss to understand your comment. The class action is proceeding along very well, thank you. The delay is caused not by the instigators but by legal argument that normally happens in such cases. I have reason to believe a statement will be issued in the near future as to the developments in the case. I would suggest with great respect, before making such a statement in future you contact the Litigation Funders who would be well known to you, for correct and up to date information.

I did say the class action has probably finished, and until I have hard evidence
I can only assume it is a non event.

 

[simgrund]

I did say the class action has probably finished, and until I have hard evidence
I can only assume it is a non event.

Hello Lawrydog,
I think the holdup is with the PTQ examinations going on in various courts.
The main issue is to establish solvency or insolvency of Octaviar on dates it was making third party loans and perhaps other dealings.
If insolvent and KPMG waived it through, the action will be easier.
CA action preparation needs conclusions from these examinations.
Currently, Fortress loan is in court's sights.
Conclusions are on their way to many parties, PIF among them.
So we need to wait.
I think that's the simplest picture for now; I will stand corrected if there are add ons worth mentioning.
Hang in there pal and double check your registrations with Armstrong and IMF.
Cheers,

 

[seamisty]

I did say the class action has probably finished, and until I have hard evidence
I can only assume it is a non event.

lawry1dog PIF investors have enough to deal with without scaremongering without backup please. Like Charels36, myself as an original applicant also in the Class Action, personally when ever I or other participents have concerns re the progress I contact IMF directectly of which I always get a prompt response and post it on the forum. My information is that the Class Action is still on track and anticipating 'going forward' this year. Please do not post possibly negative posts if you do not have data to back yourself up, it is difficult enough to keep PIF morale/sentiment positive without your negotive rhetoric. We can rely on Wellington Capital, our currrent responsible entity to push that barrow. Hmmnnn, actually in saying that, I seriously question if WC are pushing anything in PIF investor's favour. Probablly too busy promoting the g8 education barrow. I think the barrow has a flat tyre, its finding difficulting 'moving forward'!!

Seamisty

 

[lawry1dog]

Seems it is all talk on this forum, with no real outcome from it at all. Can you tell me exactly what benefit this forum has done in getting any monetary cash back. After all
it has been over 3 years. You only say we should wait and be patient.
I thought this forum was about giving people the ability to express their opinion and views.
It is easy to criticize me, but at least I am giving another point of view(even if it is perceived as negative)

My take(opinion) on the Class Action is as follows:-
1. The IMF will cease sponsoring the action in April or May this year.
2. After that the solicitors will then want to bill someone else(maybe us).
3. There is a real possibility that the Judge will pass a judgement that KMPG have to pay up.
4. KMPG will then Appeal the decision, and then it will maybe another 1-2 years wait, in which we will be paying(maybe).

Can someone verify that we will not be paying for the Class Action in the future?

It has been over 3 years of this tragedy, of MFS going bust, and the only thing we have received is a 1c payment and of course being on the NSX. The NSX is really a joke, in that who would buy any of our Unit shares, in a fund managed badly by WC.
WC has never given us any hope in the Unit price going above 10c.

You have criticised WC for 3 years and of course nothing has happened, and I have
the feeling they laughing in our faces all the way to the bank.

After all I want my money back.