Re: Octaviar MFS Premium Income Fund PIF
From GC Bulletin
Title:
ASIC's actions; upset investors
Authors:
by Nick Nichols business editor
Source:
Gold Coast Bulletin, The; 16/09/2008
Edition: B - Main
Section: Business, pg. 029
A SPLIT in the ranks of Premium Income Fund investors spilled on to
the streets of Brisbane yesterday.
About a dozen protesters stationed outside Wellington Capital's Queens
Street office were howling down plans by the corporate watchdog
to pull the pin on a planned meeting on the Gold Coast this Thursday
to vote on the fund's survival.
The Australian Securities and Investments Commission has responded
to concerns by some investors that Wellington Capital, headed by
Jenny Hutson, was not acting in the best interests of unit-holders,
many of them elderly, who poured $770 million into the fund when
it was under the control of MFS.
However, yesterday, other investors - said to be the majority - were
angry that ASIC was meddling with the rescue plan proposed by
Wellington, accusing the watchdog of failing to act on behalf of
investors when it was under the control of MFS.
Placards waved by protesters yesterday denounced PIF's former management
team, which included MFS founders Michael King.
It was unclear how many of yesterday's protesters were PIF investors,
but spokesman Philip Higson said many of his friends were investors
and he was willing to support them, calling for this Thursday's
meeting to proceed as planned.
``If they go down, there's going to be a lot of mum and dads go down,''
he said.
Yesterday's protest was directly opposed to the views of a splinter
group of investors, known as the PIF Initiative, who want Wellington
Capital removed as responsible entity for the fund and plans
to list on the National Stock Exchange abandoned.
Wellington has proposed a listing to allow cash-strapped investors
to sell their units in an open market, but PIF Initiative has argued
the price would be at a sharp discount to the fund's value.
Ms Hutson, Wellington's executive director, has said the fund, which
has a $55 million exposure to the Raptis Group, was valued at
45c in the dollar as a going concern.
Liquidation would only deliver unit-holders 14c in the dollar, she
said.
This Thursday's meeting, which will draw investors from as far as
Japan, has been called to vote on whether the fund should continue
as a going concern and whether Wellington Capital can proceed with
its plan to recover all investor funds over the next three to
five years.
``What's disappointing from our perspective is that ASIC has left
this really late,'' said Ms Hutson.
She said Wellington had provided ASIC with all materials requested
at the end of a series of investor forums in July and it had been
`well considered' by investors since then.
``Here we are at the end of the 28 days with ASIC coming out of nowhere
and challenging it,'' she said.
ASIC last week lodged a Supreme Court action, to be heard tomorrow,
restraining Wellington from calling the meeting.
``The only people that are going to be hurt by this are the investors
themselves,'' said Ms Hutson.
She said Wellington was outlaying $120,000 to hold the meeting, which
could potentially draw thousands of investors to the Gold Coast
Convention Centre.
Ms Hutson said Wellington's planned resumption of distributions to
investors, who have been told they will receive a total of 3c a
unit by Christmas, was also in jeopardy following ASIC's actions.
ASIC yesterday declined to comment on the matter.
One Sydney investor, who would only identify himself as Javier, yesterday
slammed ASIC's actions and backed Wellington's plans for
the fund.
``ASIC has intervened to the detriment of investors,'' he said.
Javier said investors have `had enough'.
``They just want stability in their life.''
The 43-year-old businessman who said he was invested `substantially'
in the fund, said ASIC would better serve investors by investigating
the activities of the previous management of the fund.