Wellington Capital PIF/Octaviar (MFS) PIF

[seamisty]

ASICK. WC's NSX announcement of 22 June at a second before 10:47am:

http://nsxa.com.au/ftp/news/021724126.PDF

"Meeting scheduled for 23 June 2011
Wellington Capital has agreed not to proceed with its interlocutory proceedings in the Federal Court. The Court ordered that the interlocutory proceeding be dismissed.
The consequence is that tomorrow’s meeting of Unitholders, will proceed as planned as follows:
23 June 2011 at 11.00am
Pinaroo Room,
77 York Street, Sydney
Jenny Hutson, Chairperson of Wellington Capital as responsible entity of the Premium Income Fund said:
‘it is my view that the ultimate decision making body is the members in general meeting. I look forward to Unitholders having the opportunity to consider the resolutions put forward in the notice of 16 May 2011.’ "

Would you agree that dropping the interlocutory proceedings and then making such a statement could lead the market to believe that WC's claims against the meeting would be dropped? If so, then isn't it illegal to mislead the market?

Duped I am no expert but I strongly suspect that the sole purpose of WC to try and postpone the meeting then at the 11th hour announce that jennearous WC had decided it was in the best interests of ALL to allow the EGM to proceed was all part of a stupid game. With approx 230 paid for WC proxies on standby, and many legitimate PIF unitholders having cancelled previous travel arrangements as was intended by the confusion WC had created, WC could hardly contain their excitement!!! Knowing there was a room full of actors hidden upstairs on the 23rd of June waiting to wave pink forms , WC staff members could not wipe the greedy grins from their faces, swanning around the foyer (on their own, no loyal supporters willing to be seen with them). WC even had their own registry services on hand to process the new investors. THEN THE RUSE WAS UP, WELLINGTON CAPITAL HAD BEEN SPRUNG!!!!The grins melted like lard on a hot day and were replaced with grimaces and groans of disbelief!!! WC staff sprung into action and went off in all directions, mobile phones were hanging off ears like the latest designer earrings, jackets were off, carpet on stairs to the 'upstairs room' was glowing with heat and sweat was pouring from red faces!!! Up until this point, that meeting would have proceeded as planned by WC, but they knew that without the rent a crowd, they didn't have a hope of taking control of that meeting. The shattered eggos were left with no alternative but to resort to plan B, take us back to the court on the pretext of using an outdated register which would have been totally acceptable had previous plottings and well laid Wellington Capital plans played out as was expected and WC had got elected as chairperson. The only reason Ms Hutson did not address the people at the meeting was because she was not physically capable, having been overcome by a sudden stress related illness!!!
Its not over yet, but at least we know now what depraved individuals we are dealing with who will stop at nothing to conceal real information while content to distribute false information.

Seamisty

 

[simgrund]

Duped I am no expert but I strongly suspect that the sole purpose of WC to try and postpone the meeting then at the 11th hour announce that jennearous WC had decided it was in the best interests of ALL to allow the EGM to proceed was all part of a stupid game. With approx 230 paid for WC proxies on standby, and many legitimate PIF unitholders having cancelled previous travel arrangements as was intended by the confusion WC had created, WC could hardly contain their excitement!!! Knowing there was a room full of actors hidden upstairs on the 23rd of June waiting to wave pink forms , WC staff members could not wipe the greedy grins from their faces, swanning around the foyer (on their own, no loyal supporters willing to be seen with them). WC even had their own registry services on hand to process the new investors. THEN THE RUSE WAS UP, WELLINGTON CAPITAL HAD BEEN
SPRUNG!!!!The grins melted like lard on a hot day and were replaced with grimaces and groans of disbelief!!! WC staff sprung into action and went off in all directions, mobile phones were hanging off ears like the latest designer earrings, jackets were off, carpet on stairs to the 'upstairs room' was glowing with heat and sweat was pouring from red faces!!! Up until this point, that meeting would have proceeded as planned by WC, but they knew that without the rent a crowd, they didn't have a hope of taking control of that meeting. The shattered eggos were left with no alternative but to resort to plan B, take us back to the court on the pretext of using an outdated register which would have been totally acceptable had previous plottings and well laid Wellington Capital plans played out as was expected and WC had got elected as chairperson. The only reason Ms Hutson did not address the people at the meeting was because she was not physically capable, having been overcome by a sudden stress related illness!!!
Its not over yet, but at least we know now what depraved individuals we are dealing with who will stop at nothing to conceal real information while content to distribute false information.

Seamisty

And willingly aided by duplicitous characters like ASICK.
Reveal thyself before public's revelation leaves red lashes across your back.
Tell me unequivocally there are no links between you, WC and PIF Reaction Group.

And on a totally unrelated matter; may I commend you seamisty on the attractiveness of your writings. I detect a whiff of Dostoyevsky's drama.
May the Pen continue its mighty march!

Regards,

 

[charles36]

Asick, thank you for your prompt reply. Have you read the His Honour's finding or not.

 

[ASICK]

Asick, thank you for your prompt reply. Have you read the His Honour's finding or not.

"All I know is that the judge has already found that the Notice was defective and ipso facto, the meeting was invalid. What happened at the meeting has nothing to do with the Notice for the meeting."

I'm sorry I didn't answer the question directly - the short answer is NO.

 

[Harald]

I'm sorry to see that you seem to have developed an irrational belief that everyone who doesn't agree with you is somehow aligned with the manager of your fund.

"How can you blame ... CasCap for proceeding with the meeting."? Well, easy - very easy - they continued on with the meeting while a trial on the Notice was pending.

There was a claim by Wellington Capital that the Notice of Meeting was defective - what is the point of having the meeting and then risk having a judge rule the meeting invalid because the Notice was defective?

It wasn't just CasCap's costs that were at risk, but also the travel and other expenses of members of your fund - members deserve certainty. Many of your members are now out of pocket, money some might have found difficult to expend but did so because of the call by members to other members to attend the meeting. Even the stop/start of the change of date may have cost members extra.

The only way certainty could be ensured was to resolve the legal issues which your side had notice of. Actually (as I've previously posted), I was surprised that the judge didn't press the parties to conclude the legal proceeding before members would meet.

Cascap's costs are tax deductible but I'll bet for those investors on a low income stream there's no such benefit for them.

Maybe the cost of attending the meeting was nothing to you, but to others, even tax deductible, was still expensive.

You ask why I ask the obvious? Well, beause I don't get the gist of your argument - is it that the court lacks ethics? if so, which court/s? and what are the ethics so lacking?

You seem to be avoiding the issues and shooting the messenger.

To be honest, I didn't want to question the courts ethics. I was questioning Your ethics. Wasn't that obvious?

To blame CasCap for causing avoidable costs to investors is outrageous. When
JH announced on the NSXA that the meeting would go ahaed I was allready on my way to Sydney where I had booked and paid accommodation and so have been many investors. And this was good. JH would have rolled us as intended with her rented
crowd.

And now for Your feeling: I somehow got the view that some/many members on
this forum feel that any wrongdoing (if so found) by WC or another associated entity
will somehow bring the meeting back to life, but as I'm concerned, that will no
be the case.
First of all: You don't seem to be concerned because You don't seem to be an
investor.
Second: It's disgusting to be called an idiot by You. We all hope and some pray
that CasCap is willing to take a second attempt.
I do have the feeling that You want to undermine this.

 

[ASICK]

To be honest, I didn't want to question the courts ethics. I was questioning Your ethics. Wasn't that obvious?

To blame CasCap for causing avoidable costs to investors is outrageous. When
JH announced on the NSXA that the meeting would go ahaed I was allready on my way to Sydney where I had booked and paid accommodation and so have been many investors. And this was good. JH would have rolled us as intended with her rented
crowd.

And now for Your feeling: I somehow got the view that some/many members on
this forum feel that any wrongdoing (if so found) by WC or another associated entity
will somehow bring the meeting back to life, but as I'm concerned, that will no
be the case.
First of all: You don't seem to be concerned because You don't seem to be an
investor.
Second: It's disgusting to be called an idiot by You. We all hope and some pray
that CasCap is willing to take a second attempt.
I do have the feeling that You want to undermine this.

Well, who else do you blame? W.C. didn't call the meeting. The proceeding in the Federal Court was still on foot.

Like it or not, W.C. had a right to bring an action, and it had a right to cease its' quest for an injuction.

CasCap took the risk - it was a decision that they made - we all make decisions, some turn out good, others turn out bad - that's life.

Judges take an impartial view and make decisions based on the law and the facts - why blame the judge?

Why does stating the obvious align me with one side or the other?

I'm afraid you didn't grasp my inference - I did not infer you were an i**ot.

I too hope that CasCap makes another run for your fund. You have no idea how much I wished that your side would attain success - actually, I wish your side nothing but success, because your success will give members of other funds the impetus to achieve better outcomes for themselves.

 

[DepressedDad]

Yes, thanks Seamisty for ALWAYS writing exciting, interesting & hopeful posts. You are a treasure.

I so look forward to reading information, comments and especially developments on this wonderful thread. But some contributors I give more credibility to than others. I hang on every word you write too Charles. Thanks so much for being there for us. I wouldn't worry about other contributor's knocking or lower yourself to even responding. All us readers make our minds up about source credibility. And it's easy for us to discount those who are wanting to criticise instead of working towards a common goal. I too question if such knockers have their OWN money involved.

Look how far we've come. It was great to read Seamisty's account of the angst & humiliation as the fraudilent plan went pear shaped. And who do we have to thank for that? The brilliant hardworking team on here with the help of Cascap. We have made such progress, especially lately. To expose WC and JH as fraudsters on the FRONT page of the Business section is a HUGE victory in itself. Even if it is one step backwards to two forward, we're still moving. We knew it wouldn't be easy and we're not stopping until we're wrestled the reins from the trotters.

So keep the info flowing team. We're smart enough to sort out the genuine posts from those looking to distract us, which we'll discount & ignore. Thanks again to our workers. The try line is in sight.

 

[selciper]

Wikipdia contains a short entry for Justice Dowsett.

http://en.wikipedia.org/wiki/John_Dowsett

 

[simgrund]

Wikipdia contains a short entry for Justice Dowsett.

http://en.wikipedia.org/wiki/John_Dowsett

Oops, Queensland origins as well? White-shoe brigade mentality crossover?

And before the howling begins, answer the 2 questions I asked of the Judge:
Why you did not ask WC who were the "new investors"?
Why the updated Armstrong Register was not passed to PIFAG as:

1. requested many times over?
2. required by various supervisory Legislation?
3. Judicial Ethic of Justice would deem necessary to ask to complete the "picture"?

And again to howlers: trawl your consciences for your feelings towards all the miseries our thousands are experiencing and bordering on life threatening everyday shortages in food, medicine, treatment, support.

......While the Judge scuttles the means of real remedy to these miseries
by putting perceived, but not investigated unfairness to 200 ahead of all logic, reason and rationale.

Have you got any feelings?

Mull, mull, mull over it to your heart's content.

Regards

 

[Jadel]

I can recall Justice Dowsett making a comment at the proceedings, to the effect that he had once been involved in a similar case before. I assumed it must have been as a Barrister .

We will have to hope he was acting for the defence at that time .

In any event we will all know the outcome shortly

 

[seamisty]

Latest blurb from the WC bunker:
Dear Unitholder
My aim continues to be to maximise the cash returned to you from the assets of the Fund. My team has, and will continue, to strive to achieve the best outcome for you in the shortest possible timeframe.
I am committed to ensuring that my team works with integrity, diligence and in a professional manner. In the last three months, the following key achievements have been made: $40.7 million in contracts have been signed; negotiations have progressed well on the sale of 50% of the Chifley Wollongong Hotel, which I expect will
yield approximately a further $10 million; major assets including the Forest Resort at Creswick have been made ready for sale and will be taken to the market; two proposals have been made to take control of your Fund – the first from ALF PIF, and the second from Castlereagh. Deliberately misleading, ambiguous, unfounded and inflammatory statements have been made by the proponents of both of these proposals about Wellington Capital and the Fund. Both proposals have now been dismissed by you, the Unitholders.
I am most grateful for the support received from you.
I am particularly grateful for the letters, emails and calls of support and encouragement which I have received from you over recent times.
I aim to continue to ensure that the Fund has no debt, is well managed, and delivers returns to you as soon as possible.
My objective is to sell the underlying assets of the Fund within two years and return the proceeds to you.
Separately, I will continue to pursue all relevant litigation and the $211 million claim which the Fund has in the MFS liquidation.
Kind regards
Jenny Hutson

http://www.nsxa.com.au/ftp/news/021724240.PDF

For all PIF investors who were concerned thatCASCAP would liquidate the PIF, just exactly what are Wellington Capitals intentions? Why the need for a capital raising? Sorry WC, Deliberately misleading, ambiguous, unfounded and inflammatory statements appear to be someone elses forte, lets not continue the charade of pass the blame game please?
Seamisty

 

[JohnH]

Latest blurb from the WC bunker:
Dear Unitholder
My aim continues to be to maximise the cash returned to you from the assets of the Fund. My team has, and will continue, to strive to achieve the best outcome for you in the shortest possible timeframe.
I am committed to ensuring that my team works with integrity, diligence and in a professional manner. In the last three months, the following key achievements have been made: $40.7 million in contracts have been signed; negotiations have progressed well on the sale of 50% of the Chifley Wollongong Hotel, which I expect will
yield approximately a further $10 million; major assets including the Forest Resort at Creswick have been made ready for sale and will be taken to the market; two proposals have been made to take control of your Fund – the first from ALF PIF, and the second from Castlereagh. Deliberately misleading, ambiguous, unfounded and inflammatory statements have been made by the proponents of both of these proposals about Wellington Capital and the Fund. Both proposals have now been dismissed by you, the Unitholders.
I am most grateful for the support received from you.
I am particularly grateful for the letters, emails and calls of support and encouragement which I have received from you over recent times.
I aim to continue to ensure that the Fund has no debt, is well managed, and delivers returns to you as soon as possible.
My objective is to sell the underlying assets of the Fund within two years and return the proceeds to you.
Separately, I will continue to pursue all relevant litigation and the $211 million claim which the Fund has in the MFS liquidation.
Kind regards
Jenny Hutson

http://www.nsxa.com.au/ftp/news/021724240.PDF

For all PIF investors who were concerned thatCASCAP would liquidate the PIF, just exactly what are Wellington Capitals intentions? Why the need for a capital raising? Sorry WC, Deliberately misleading, ambiguous, unfounded and inflammatory statements appear to be someone elses forte, lets not continue the charade of pass the blame game please?
Seamisty

Hi Seamisty,

Some might have missed that there are 12 pages to this report.

Some interesting statements......... e.g.

"Investor forums conducted by Castlereagh
Wellington Capital is aware that Castlereagh held an investor
forum on 6 July 2011 where a range of questions were asked
and responded to by Castlereagh.
The Investor Forum broadcast on 6 July 2011 makes false and
misleading statements about Wellington Capital and its conduct
and should be disregarded by Unitholders in the Fund. "

 

[Sutho81]

It looks like Wellington is making up more lies in their latest NSX announcement. They state the Castlereagh takeover was rejected by us the unit holders. How can anyone beleive their BS when we all know that they prevented the vote from going ahead.

The numbers Wellignton is showing in their favour is certainly not something to be proud of. It looks like half the proxies they received are against them!

I am sure if the proxies they have were combined with the ones Computershare has then the result would be goodbye Wellington.

Seeing all these BS statements by Wellington just makes my blood boil and want to get personally involved in their removal!

 

[selciper]

This is an extract from a US site. Enron were guilty of 'wilful blindness.' (James Murdoch at the recent London hearing was asked whether he understood the term.)

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

Main Entry: willful blind·ness
Function: noun
: deliberate failure to make a reasonable inquiry of wrongdoing (as drug dealing in one's house) despite suspicion or an awareness of the high probability of its existence
NOTE: Willful blindness involves conscious avoidance of the truth and gives rise to an inference of knowledge of the crime in question.
Merriam-Webster's Dictionary of Law, © 1996 Merriam-Webster, Inc.

 

[elizaman]

Asick, You seem to be better informed about how the justice system hasn't failed the investors of the premium income fund.
From the day MFS imploded Till this day regardless of the countless complaints sent to asic, They have failed to act or inform investors on every single complaint made by unitholders.
ALWAYS erring and protecting the group who is holding our fund in trust....why?

From what I understand you seem to be an advisor who has no doubt got an interest in what we write here because of your friend who is a unitholder. Yet you seem to find fault whenever we/I simply ask for justice to be done when its sought and for for questions to be answered when they are asked.

I may have to refer to your insight how I could possibly get some of my questions answered because I sure as hell cant get them answered by anyone at wc or asic or anyone else in the know.

The prime source of information for me is whats posted here on the ASF by those dedicated and committed to doing the right thing by everyone regardless if they are an action group member. There is no-one else protecting our interests, is there?

In those few weeks that cascap were vying for the vote I got more answers to questions than three years of wellingtons who are suppossed to be looking after our fund and whos job it is to inform investors.
I don't trust wellington capital anymore ...do you?

Are you protecting wellington capital? Do you think Wellington are doing a good job managing whats left of our fund and are they acting in the best interest of unitholders?

To all who seem to want to have a go at Asick, you really need to try and place this frustration nito something more positive with the PIFAG. Big business is tough. I wrote about this ages ago mentioning we need to get our ducks in a row before calling meetings and wasting time and money on valued unit holders. Quite honestly did you really think that JH?WC were going to just give it all back without a fight. Really!!!! Lets support the PIFAG get all the rule books out from both sides, try to proactively read each step in the process as best we can which will require thinking out of the box. to sit there and cry justice, blaming everything within the "City Hall" will not achieve anything will possibly alienate some units holders that feel there is no sense in trying to fight city hall. As much as possible has to be done through the courts. It's costly and timely but in the end it will probably be the only way out of the tyranny of WC. They will not go quitely and a unit holders sense of justice can be somewhat biased and personal when $$$ are on the line. The judge has made a decision based on how it was presented. Obviously it was not presented well enough along with the steps PIFAG and/or Castlereagh took to get us to this point. Lets learn from it and move on. I am of the same opinion as someone else this forum in that I would like to get involved personally as well somehow. There appears to be some very knowledgeable people on this forum much smarter than I so it should be possible. By the way I am a member of the PIFAG and though I'm currently out of the country still review this forum when I can. Question: has the PIFAG issued any updates regarding what has happened???

With Respect

 

[MAE]

I guess a lot of people reading the Wellington Investor Update: July 2011 were probably not at the meeting.

Fact and Fiction are very different. If only I had filmed the meeting!

I feel we should be concentrating more on bringing the illegal rent a crowd debacle to the legal authorities, may be then ASIC might have some more clout.

 

[ASICK]

[elizaman]

"I wrote about this ages ago mentioning we need to get our ducks in a row before calling meetings and wasting time and money on valued unit holders."

"Obviously it was not presented well enough along with the steps PIFAG and/or Castlereagh took to get us to this point. "

"Lets learn from it and move on." [/QUOTE]

Very well said, no one should expect to poke their hand into an ants' nest and not get bitten.

[zixo]

"Asick, You seem to be better informed about how the justice system hasn't failed the investors of the premium income fund." From the day MFS imploded Till this day regardless of the countless complaints sent to asic, They have failed to act or inform investors on every single complaint made by unitholders. ALWAYS erring and protecting the group who is holding our fund in trust....why?"

If you rely on ASIC, you do so at your peril. Maybe with a new man-at-the-top ASIC might become functional, but to date it's really been quite a croc to not only the PIF. Please don't take ASIC's incompetence as an affront to just yourselves.

The court will make decisons on the facts and the law. There is no point blaming the judiciary when the fault clearly lies elsewhere.

"From what I understand you seem to be an advisor who has no doubt got an interest in what we write here because of your friend who is a unitholder. Yet you seem to find fault whenever we/I simply ask for justice to be done when its sought and for for questions to be answered when they are asked."

Frankly speaking, I'm disappointed about the outcome to date, but unless members come to understand the facts and how those facts affect their respective opportunities in the fund, then you (as a group) will never progress anywhere.

If you see my attempts at explaining the facts (as I see them) as fault finding, then you clearly do not understand what is going on around you. Don't feel bad about that either, you're not the only one. We're all on a sharp learning curve.

"I may have to refer to your insight how I could possibly get some of my questions answered because I sure as hell cant get them answered by anyone at wc or asic or anyone else in the know.

The prime source of information for me is whats posted here on the ASF by those dedicated and committed to doing the right thing by everyone regardless if they are an action group member. There is no-one else protecting our interests, is there?"

You're lucky you have your representative group because it's taken disgruntled members a long way along the track to a peaceful resolution of your concerns. The old adage applies, "The good Lord helps those who help themselves".

"In those few weeks that cascap were vying for the vote I got more answers to questions than three years of wellingtons who are suppossed to be looking after our fund and whos job it is to inform investors."

I can see that CasCap is much more transparent than Wellcap seems to be. Of course, there should also be a general hope that such transparency will continue in the event CasCap takes over the fund. You have to keep in mind that CasCap is in it for the bucks too. It's nice to think all 'buddy buddy' but the proof as to whether that will continue will be 'in the pudding' (so to speak).

"I don't trust wellington capital anymore ...do you?"

I have no idea. WellCap is fighting for its' lucrative income stream from the fund, and clearly there's a matter of prestige melded in there somewhere too.

"Are you protecting wellington capital? Do you think Wellington are doing a good job managing whats left of our fund and are they acting in the best interest of unitholders?"

This story gets a little bit boring - I can't even understand how you can conclude that I support Wellcap by simply pointing out facts. It's a paranoia that seems to unnecessarily permeate the minds of quite a few members of this forum.

You really should learn to understand the information and make informed decisions. When you understand what is happening, then you'll be able to attack my opinions rather than attack (or suspect) me.

I really don't know what sort of job WellCap has done for your fund. I really can't speak to that issue, but clearly many of you think that the job has been far from well done.

The cost of the Armstrong registry is one issue which was an eye-popper for me, especially when compared with the quote obtained by CasCap.

Other than that, I'm can't comment.

 

[seamisty]

I have resorted to making complaints to ASIC again, especially in relation to related party transactions. The following makes interesting reading and in my opinion there is no way that WC should have an inhouse majority owned and controlled registry business responsible for collating information and votes. I will copy the whole article as I had a problem with the originl link. Worth the read.

Related party transactions and the arm's-length exception: guidance for directors
July 25 2011

Overview of restrictions on provision of benefits to related parties

The prohibition (other than under limited exceptions) on public companies or entities that they control providing a financial benefit to related parties without shareholder approval was introduced into Australia's Corporations Act 20 years ago. The prohibition also applies (with some technical differences) to responsible entities of registered managed investment schemes that wish to give a financial benefit to a related party. The related party provisions were designed to ensure that financial benefits given by public companies to persons who were in a position to influence significantly the decision to give the benefit were subject to shareholder approval, unless they were on commercial terms. The power of the provisions rests in both the limited exceptions available and the expansive definitions of who is a 'related party' (this includes directors, their spouses and relatives) and what constitutes a 'financial benefit' (this extends beyond a mere payment to include the issuance of securities, supply of services and release from obligations). One of the few statutory exceptions which allows a public company or responsible entity to give a financial benefit to a related party without shareholder approval is where it is given on terms that would be reasonable in the circumstances if the public company and the related party were dealing at arm's length, or it is given to the related party on even less favourable terms (the arm's-length exception).
Although the related party provisions are not new, the Australian Securities and Investments Commission (ASIC) has rarely proceeded with regulatory actions focused on a breach of the provisions and, until recently, there has been sparse regulatory and judicial guidance on the way in which the provisions operate. This may be surprising to some observers, given that many of the listed fund structures embraced by the Australian market before the financial crisis involved complex related party structures which often led to upstream common ownership - and potential conflicts of interest - between various players, including fund sponsors, managers and responsible entities.
New ASIC Regulatory Guide
In recognition of these concerns, in March 2011 ASIC released a long-overdue Regulatory Guide(1) on the related party provisions. The guide provides a synthesis of the regulator's views on the few judicial decisions that do exist in respect of the provisions and, among other things, gives directors new guidance about the criteria that ASIC expects boards will apply in determining whether a related party transaction is on arm's-length terms.
As a matter of market practice, boards of some public companies wishing to give (or that had already given) a financial benefit to related parties have often been attracted to the arm's-length exception because it was perceived that it was relatively easy to come within its purview. There is tacit acknowledgment of this by ASIC in the guide, which notes that prudent directors who wish to rely on the exception should be confident that a transaction is genuinely on arm'- length terms, rather than it merely being arguable that the transaction is arm's length.
Arm's-length exception and the ASIC test
The prevailing judicial test for determining whether a related party transaction is arm's length is an objective one, assessed against a standard which assumes that the public company or responsible entity entering into the transaction is:

unrelated to the other party in the transaction;


free from any undue influence or pressure;


knowledgeable about the business and other drivers of the transaction to judge what is in its interests; and


concerned only to achieve the best available commercial result for itself in all of the circumstances.

For a transaction to be on arm's-length terms, it must be reasonable 'in the circumstances'. ASIC concludes in its guide that other than the fact that the parties have a relationship, all of the circumstances of the related party transaction are relevant to this assessment, including:

whether alternative transactions are open to the entity that are not with related parties;


prevailing economic conditions and their impact on the parties and their relevant industries; and


any special value to the transaction which accrues to the related party, but would be unavailable to an unrelated party.

ASIC highlights three key factors in the guide that boards should take into account when determining whether a transaction is on arm's-length terms. A robust board process analysing whether a related party transaction is arm's length would involve posing the following questions for consideration, drawing on professional or expert advice where appropriate.
First, are the terms of the related party transaction market based on comparable transactions in similar circumstances between unrelated parties? This may be something on which boards should seek independent expert guidance. Risk allocation (eg, in the form of indemnities and warranties) and consideration are relevant. Excessively onerous consideration or generous risk allocation when compared to market suggests that the terms are less likely to be 'reasonable' and therefore come within the arm's-length exception.
Second, does the parties' conduct in the bargaining process around the financial benefit demonstrate that the negotiated outcomes of the transaction could reasonably have been achieved by uninfluenced, self-interested parties? Applicable considerations will include:

whether the transaction is reflected by a binding contract;


the involvement of professional advisers;


how vigorously the transaction and the terms that comprise it were negotiated;


the entity's bargaining position (eg, whether it was in financial distress at the time); and


whether any director has a material personal interest in the transaction.

Third, what are the short and long-term impacts on the company or registered scheme of entering into the transaction? This includes assessing whether:

any negative impact from the transaction (economic or otherwise) is balanced by positives;


the transaction is consistent with the company's business plan; and


the contract which gives effect to the transaction adequately protects the interests of the entity giving the financial benefit.

The conservatism with which ASIC is now approaching the arm's-length exception is demonstrated by its conclusion in the guide that if it is merely arguable, but not clear, that the exception applies, shareholder approval for the giving of the financial benefit should be sought. A similar prudent approach is likely to be needed where the related party transaction gives rise to a conflict of interest with a director.

 

[Duped]

First - I'll piont out that I don't practice law - so any view I express is simply my own opinion.

An interlocutory proceeding is a pre-trial proceeding and whether it is continued or discontinued has no bearing on whether a trial is proceeded with, unless of course it's a successful motion to strike out the claim.

As to the notice on the NSX - I think the notice is correct. It is not W.C. calling the meeting and CasCap sought to proceed in the face of the continuing claim by W.C. at its' own risk.

For me, I wouldn't have proceeded with the meeting before resolving the legal claims before the court - the risks would be too high, and furthermore, there would no certainty for unitholders.

Look, it's a judgement call, and CasCap made a judgement probably based on the view that they had a good answer to W.C. claims, but I think CasCap should have looked at the potential affects on investors and the losses they stood to suffer if the Notice turned out to be defective.

Again, these are only my personal opinions, which may, or may not, have merit.

Fair enough. But that doesn't change the fact that it was also WC that chose to drop the Interlocutory action.

I originally responded to your post #8351 because you wrote e.g. "Maybe the cost of attending the meeting was nothing to you, but to others, even tax deductible, was still expensive."

Where was WC's regard for costs to unitholders when it decided to drop the interlocutory action?

Don't you think that a unitholder would ask, why would WC make me pointlessly incur the expense of attending the meeting when:
A) WC is obligated to act in unitholder's best interests AND
B) JH has stated "I look forward to Unitholders having the opportunity to consider the resolutions put forward in the notice of 16 May 2011"?

Regarding interlocutory actions. At the end of the day the only actionable event that WC needed to take action on was to prevent any changes being made to the operation of the fund. This is not like IP infringement or domestic violence where interlocutary orders will prevent repeated violations and the consequentual continuing damages. All WC had to do was sit back and wait for someone to come knocking on its door saying A) the Constitution will be amended as such and B) your fired. Only then did WC need to say 'on what authority'. Only when CasCap lodged forms with ASIC, initiated legal proceedings, tried to act on behalf of PIF etc did WC really need to initiate proceedings. Right?

So why did WC make PIF incur the expense of the interlocutory proceedings to then just drop them?

I agree with what you said "I was surprised that the judge didn't press the parties to conclude the legal proceeding before members would meet." By not granting the interlocutory orders, has the Federal Court got itself involved and influenced the outcome? Is it then fair that Dowsett can use anything CasCap did on the day of the 23rd to cancel the meeting? Afterall, it is posible that it was the Federal Courts own actions/inactions that induced CasCap into making the mistakes it was clearly about to make?

Wasn't the Federal Court in a position to throw the Interlocutory Action out AND warn CasCap not to proceed? Now we're faced with the prospect that the meeting was invalidly adjourned. Right?

I'm not sure what the PIF consitution has to say about adjourning the meeting but I can't see anything in Part 2G.4 that puts a time limit on when the meeting must be held. S252K certainly anticipates long adjournments: "When a meeting is adjourned, new notice of the adjourned meeting must be given if the meeting is adjourned for 1 month or more." That's what our democratically elected Federal Government anticipates members doing - adjourn a meeting called by members (under S252D) by more than a month.

The requirement to notify ALL investors individually can still be met can't it? There's nothing in S252G that puts a time limit on when the individual notification must occur. S252F does not say the 21 day limit prescribed applies to the individual notification. S252G says "written notice" it does not say "the notice of S252F".

As for quorum. Well. Anyone know what Doewsett says about this?

 

[Duped]

"Very well said, no one should expect to poke their hand into an ants' nest and not get bitten." Spot on. The law around this product is an ants' nest. So why were the ASIC branded (AFSL) financial advisors pushing us into it. I'm back to safer investments like bank deposits and a highly liquid SX. And when those banks start to do to the ASIC public servants what is happening in Greece I will not be shedding a tear. I will be whipping my $ out of here quicker than you can say Jersey. Just like the Greeks did. the ASIC servants can keep their 7xFAS (for what it's worth)

Hutson said something along the lines of 'PIF is a great fund'. Yeah right. For who.

Whereas ASA CEO Stuart Wilson published: "Octaviar fund is a sick dog that needs to be put down".

And how exactly does Mr Wilson propose that be done?

"If you rely on ASIC, you do so at your peril." a-men You'll be up A SIC creek without a paddle.

"The court will make decisons on the facts and the law." And what exactly is the law when only 3% of disputes go to trial? If 97% of transactions are taking place on the streets then it's the law of the streets isn't it? Who's fault is that? Perhaps Judges are a bit soft on BS peddling lawyers. Y'know em who after all "have a business to run". Lawyers are a bit like journalists. And after all, Murdoch has a business to run and a duty to shareholders. Isn't Slater and Gordon now listed? Who allowed that to happen? Do we just have to trust that lawyers are doing the right thing? According to their oath. Like we trust WC to be doing the right thing?

".. then you clearly do not understand what is going on around you."If we did then we probably would never have invested in this fund. We're an ASIC branded AFSL financial advisor's fish in a barrel.


"The good Lord helps those who help themselves". Otherwise known as tough love. But there's a point where teacher watching a grade 6 pushing a prep kid around 'aint gonna help anyone.

"... there should also be a general hope that such transparency will continue in the event CasCap takes over the fund." Spot on.

"I have no idea. WellCap is fighting for its' lucrative income stream from the fund, and clearly there's a matter of prestige melded in there somewhere too." Spot on.

"Are you protecting wellington capital? Do you think Wellington are doing a good job managing whats left of our fund and are they acting in the best interest of unitholders?"

"It's a paranoia ...." Ouch. Perhaps it's more like - lashing out in anger.

"When you understand what is happening, ..." If we did then we probably wouldn't be in the fund or on this forum.

Thanks for your input.