Wellington Capital PIF/Octaviar (MFS) PIF

Re: Octaviar MFS Premium Income Fund PIF

We will soon have an important piece of information about the performance of the fund and our RE, in the form of the 2009 Accounts for PIF. As there have been no distributions in the last financial year, it will be clear to see cost outgoings, remaining revenue streams and a more accurate picture of asset realisations. We may even get to find out who provided the extortionate 25% interest rate loan to PIF. The Directors will need to report on the expected future performance of the fund and importantly on the timing and amounts of any future distributions.

We also need to wait for the Octaviar Liquidators report - not that I think that we will gain much of the diminishing Octaviar kitty - to see the outcome of the various issues Justice McMurdo raised in his judgement in relation to PIF: the whereabouts of the alleged unfair preference payment of $5M that was in OIM when it was transfered to WIM; determination of whether the $3M paid by Octaviar to WIM is an unfair preference payment or is voidable; whether the sale of OIM is a voidable transaction; investigation of the alleged misappropriation of $130M via the RBS loan facility and the alleged misappropriation of $147.5M dud loans sold into PIF; and whether the $50M support facility is voidable on the basis that it was provided for no consideration. On this last point, if the $50Mil support facility is voided because it was provided for no value etc, there arises the prospect of further action against MFS/OCV Directors and Officers for issuing a false statement in a PDS.

We are at a turning point in the future of our fund. We might not see a return for some time, but at least we will know where we are headed.

MARCOM

Re: Octaviar MFS Premium Income Fund PIF

Thanks for your informative posts, Marcom. Frankly, if it weren't for the class action I'm sure that we'd all be absolutely at our wits end. We deserve a distribution after all this time...I well recall the October 08
"distribution" mantra and the now unreal sounding "14, 45, 65"
war cry. This may be a dumb question - is an AGM due at some point?

Re: Octaviar MFS Premium Income Fund PIF

I have now leave, to look after my mother who has cancer, so keep the good
posts going.
I have to sell our home now, and was keen to see if the 3c distribution would eventuate this year. As this will not be the case, unfortunately I cannot hold
off the bank any longer. And of course selling on NSX as I have discovered will not cut it.

Still think my plan of borrowing to give the 3c distribution and then selling assets over the next year, and then getting our balance owing from the Class Action,was feasible.

Anyway, it is big concern, that WC do not communicate anything. Of course if everything was going well, then as human nature would tell us, WC would issuing statements every week or day, on how great things are going.
Which only means WC have problems, they never figured on.

Sorry if I have offended anyone on this forum. I wonder how many other unit holders have a story like mine, or worse. I still would have liked to sent a mailout, giving people options and hope.

Regards
Lawry1dog

Re: Octaviar MFS Premium Income Fund PIF

Lawry1dog, Unfortunately there are far too many PIF investors suffering dire financial circumstances (if not all!) as a direct result of the actions of a few greedy, dishonest individuals. A mailout to investors would have cost you approx $10,000 to what purpose? Borrowing money at 20-25% to pay a distribution would erode the remaining unit value even further and it is quite obvious that potential buyers of our assetts at there current value are non existant. Reducing the price of the assetts to make them more attractive would be the equivalent of liquidation and there would be a very real chance in ending up with 14 cents per unit.The fund is at a stalemate at this point in time in my opinion and needs a new injection of income to kickstart it. A successful outcome from the class action may alter PIF unit holders ideas regarding the future of their investment if the current situation does not improve.
I am sure the few regular forum posters will continue to update others to the best of their ability and if you ever want to discuss PIF related issues please let me know your Ph no and I will call you. Regards, Seamisty

Re: Octaviar MFS Premium Income Fund PIF

I am new to this forum and have read many of the topics which I have found helpful and interesting with so many viewpoints shedding light on this confusing situation.
I am curious to know if any other investors in the PIF were exposed to the same circumstances that led to the loss of my investments in this fund.
I have been invested with the PIF for several years,using it as a retirement fund and I was due to retire in January 2008 and my investments were maturing in April 2007 so I decided to roll them over for a further six months at 8.5% to mature in November 2007.
About two weeks after the new investment started I received advice from "IZ" from MFSIM offering me a 9 months special rate of 9%.
I told "IZ" that the investment was already two weeks in the running but he immediately offered to redeem it and re-start it as another new investment for 9 months due to mature on 29 February 2008 (one month after I was due to retire).
I thought it was a little unusual for him to do this but put it down to goodwill as I had been invested with MFS for so many years.
We all know the remainder of the story as the fund was frozen just before these investments were due to be redeemed.
I see that "IZ" has been served as a respondent by Carney's Lawyers and I would be curious to find out how many other investors were approached in this way by "IZ" or others at MFSIM, when at the time that my investments were due to mature (April 07) the fund may well have already been in deep trouble.
Did they do this deliberately to secure our funds when the ship was already sinking? Surely if this was the case it can be proved and where was KPMG when this was going on?
I for one have already signed to join the class action and support it to the hilt.
Please let me know if you have been exposed to the same or similar circumstances.
Kind regards,
Blueboy1

Re: Octaviar MFS Premium Income Fund PIF

lawry1dog, we are in the same position. We put our home on the market 10 weeks ago and today have accepted an offer less than we wanted but at least we will now have some financial backup to continue on until the class action provides some return.

I think JH and WC have some serious issues to face with the Octaviar liquidation and the current state of the credit markets, which means no 3% in the foreseeable future. All we can do is watch the events unfolding and wait till we get something out of the class action.

MARCOM

Re: Octaviar MFS Premium Income Fund PIF

Blueboy1 you were not on your own with those circumstances. I know of many more including myself who were totally reassured the fund was in fine shape and was doing so well that we were offered a loyalty rate bonus for being long term investors blah blah blah. We dealt with D M for approx 10 years and never had a problem so had complete trust in her, especially when we were led to believe she was a 'senior financial advisor' for MFS. I wonder did anyone ever receive an apology from their contacts there or were all the OCV/MFS staff in on the scam and happy to get commissions for misrepresenting the true state of the Fund and convincing investors to reinvest? I am sure I have incriminating e mails from OCV/MFS that could be used as evidence in the CA, did anyone else keep personal correspondence? Regards, Seamisty

Re: Octaviar MFS Premium Income Fund PIF

Blueboy 1 and Seamisty, we had a similar experience. On 10/4/07 we provided JS also a Senior Bull dust Advisor at MFS with a roll over of an investment that was to mature on 31/7/07 as we would be overseas on that maturity date. We completed the reinvestment form with a 9 months at 9% term. When we arrived back we didn't notice that she had reinvested for 12 months at 8.5%. There was no communication explaining why this had happened against our instructions.

When the freeze was applied we were 2 days away from receiving another of our investment amounts that had matured on 31 December 07.

Re: Octaviar MFS Premium Income Fund PIF

Seamisty and Marcom,thank you for your advice.
I have archived ALL correspondence from MFSIM but whether or not it can be construed as incriminating would be a matter for the courts as the most important aspects were carefully written.
The most odious aspect was the fact that had they NOT persuaded me to re-invest for the extra 3 months I would still have the funds.
In retrospect,it is strange that they would offer to redeem funds prior to maturity in order to re-invest for a longer duration when they make it almost impossible for you to redeem an investment,in this case,what was good for the goose was not good for the gander.
Prior to the maturity date I started to get cold feet and tried to redeem all of my investments but they blocked my every move citing that my levels of 'hardship' were insufficient for their parameters,yet when it suited THEM they were quite happy to redeem them.
I sympathize with you Marcom as we both know how it feels to be so close to redemption of our investments and I am sure that it was a deliberate attempt to secure our funds when the anchor was already half way down.
Regards,
Blueboy1

Re: Octaviar MFS Premium Income Fund PIF

Blueboy1. Something I've raised before might help.

Have a look at chart from the Jun 2007 PIF Investor Update.

http://www.newpif.com.au/pifreports/pif_InvestorUpdate200706.pdf

I vaguely recall that PIF dramatically reduced % commissions to 'Advisors' in Jan 07. Possibly halved. Lo and behold - the fund size flatlines from Feb 07.

That spike in June 07 was almost certainly a trick by MFS to make the fund look better. Namely, a VERY short term holding by related company MFS Administration. This was likely intentionally and deliberately excluded from the Investor Update (In my lay opinion - IMLO).

But it couldn't be excluded from the Annual Report of YE June 2007 (issued months later). See way down on page 52. A holding by MFS Administration P/L of 60M. Say now, isn't that awfully close to the size of that Jun 07 spike. Coincidence? BWAH!!!!!!!!!!

Now have a look at the Distribution paid to MFS Admin for that period two columns over - $17,753. A rate of 6% means that 60M holding was in there for less than 2 days before YE. 60M units at 10.5% pa divided by 365 days is $17,206. Surprise!

Oh, and did anyone else here get 10.5%? ..... at call?

MFS Administration P/L pulled that holding out soon after. Even before the Annual Report was issued, I vaguely recall JH saying.

Smoke and Mirrors? Or am I speculatemenationing.

Re: Octaviar MFS Premium Income Fund PIF

Seamisty. lawry1dog. Following article might raise your hopes. Did mine. PIF essentially only holds rights over commercial property.

Business Spectator
12 August 2009
Stephen Bartholomeusz

Stockland's silver lining

"The sharemarket response to a Stockland result awash with red ink from impairment charges was less than enthusiastic. There are signs within the results, and more particularly in the group’s view of its outlook, that the rate of decline in property markets might be slowing.

Stockland announced a loss of $1.8 billion for the 2009 financial year, while claiming an underlying profit of $631.4 million. The operating result was overwhelmed by more than $1 billion of impairment charges and a further $1 billion of devaluations of its investment properties.

The group, however, has entered this financial year with modest gearing (16 per cent) and a lot of cash (more than $1 billion) thanks mainly to the $2.7 billion of new equity it raised over the past year and, while it expects capitalisation rates in its commercial portfolio to soften further before the end of this year, appears to see a floor to the market.

Cap rates have been blowing out steadily across the commercial property sector at the rate of 50 basis points each six months.

Stockland now anticipates further softening of between 25 basis points and 50 basis points in the first half but says this would take its average capitalisation rate to about 2004 levels and, in the absence of material rent reductions or a large over-correction in values, it expects rates to stabilise around those levels.

Given the capital it has raised, the write-downs Stockland has already taken against its residential communities and apartments business and the $334 million of charges against its "strategic" investments, the general commercial property market environment is probably the most significant residual source of near-term risk to its balance sheet.

The worst fears about the condition of the broader economy haven’t yet been realised. Business and consumer confidence is improving. Residential property activity and prices have picked up. The rate of decline in commercial property values appears to be slowing. The influences that have destabilised the listed property sector over the past year may now be, if not actually stabilising, at least waning.

The view that a massively recapitalised A-REIT sector has overcome the worst of the threats to its stability is shared by the market. The A-REITS have rebounded nearly 50 per cent from their sharemarket lows in March, although the sector is still trading at only about a third of the levels it held before the failure of Lehman brothers sent it into a tailspin and forced a spate of big capital raisings under pressure.

Stockland believes buying opportunities are emerging and has its foot on strategic holdings in GPT (13 per cent) and the FKP and Aevum retirement living groups (15 per cent and 14 per cent, respectively). It is, however, conscious that the massive amounts of equity it raised at distressed prices has pushed up its cost of capital and therefore the hurdle rates at which acquisition might make sense.

The levels of uncertainty and risk that have pervaded the sector over the past year have inhibited large-scale corporate activity. Stockland began its initial assault on the weak and wounded prematurely and has taken some big hits as a consequence.

Having had that experience, one would expect that any significant move the group makes from this point would be a significant demonstration of conviction that the worst is, if not behind the sector, then almost. "

Re: Octaviar MFS Premium Income Fund PIF

Duped, Very interesting analogy, more than a coincidence,let's hope that the forensic team of accountants can see through the smoke and mirrors of the creative accountants.
Thanks for the link,regards,
Blueboy1

Re: Octaviar MFS Premium Income Fund PIF

lawry1dog said:

I have now leave, to look after my mother who has cancer, so keep the good posts going. ................................
..................................................... Sorry if I have offended anyone on this forum. I wonder how many other unit holders have a story like mine, or worse. I still would have liked to sent a mailout, giving people options and hope.

Regards
Lawry1dog

Click to expand...

Hello Lawry1dog,
Allow me to call you a Good Friend, so I can offer you my best wishes for the coming times.
No need to apologize as we all fight similar frustrations felt by you.
As to other stories akin to yours; have no doubt that immense hardships are experienced by ALL. It is when we will overcome them with success in the class action (are you in?), I will come back to find you in a lighter mood to ask what did you do to deserve being called "lawry1dog"???
CHEERS, simgrund

Re: Octaviar MFS Premium Income Fund PIF

Blueboy, Seamisty, Marcom; re your posts 4024, 4026 & 4027 respectively,

Guy Hutchings, on an Octaviar letterhead dated 15 May 2008 has re-confirmed maturity date of my investment as 30 June 2008. He then proceeded in a pro-forma manner to inform me of a deferment of redemptions in line with amended Constitution by "up to 360 days".
The telltale passage in the letter was this:
"Octaviar IM has not set a date to recommence the processing and payment of distributions and redemptions, however Octaviar IM will advise all investors when the processing and payment of redemptions recommences."
A withdrawal form was enclosed, which I duly filled again; in addition to one in December 2007.
It can be seen, that in this case, the "encouragement" by way of smoke and mirrors was applied as late as middle of May of 2008.
The encouragement being the belief, that redemption will eventually be made.
From no less than Chief Executive Officer of the moment out of Level 21 Governor Macquarie Tower.
I should have asked why CEO attends to such a routine client mailing? There were no inducements to stay with the Fund.
And I had verbal assurances over the phone from Ian Zielinsky that my redemption request will be honored.
I will offer Carneys Lawyers whatever corroborating docs they may ask of us in the future.
Regards, simgrund

Re: Octaviar MFS Premium Income Fund PIF

Interesting Simgrund. You were 'honoured' to have even received communication from Mr Guru Hutchings!!! I have five e mails from DM informing me the she had asked GH to contact me which he never did. Another investor I know personally has a letter written from 'Mr Andrew Peacock' assuring her that her investment would be redeemed in May 2008 when it was due. None of these BS specialists should ever have the right to be reinstated in a position where they can repeat the same performance which resulted in the outcomes we all have to now endure. I wonder if the former employees of MFS/OCV that are not named respondants in the CA will ever have a case to answer to from other regulatory bodies? Will the senate enquiry investigate further or fob us all off with some pathetic excuse to justify the usual lack of action I have now come to expect from so called 'regulators'? Seamisty

Re: Octaviar MFS Premium Income Fund PIF

Duped re your post #4029 - sounds like misleading and deceptive conduct under the Trade practices Act.

MARCOM

Re: Octaviar MFS Premium Income Fund PIF

marcom said:

Duped re your post #4029 - sounds like misleading and deceptive conduct under the Trade practices Act.

MARCOM

Click to expand...

HMNN, This was the same year Michael King was paid a $1.6million cash bonus on top of his $800,000 salary for doing such a great job !!! Seamisty

Re: Octaviar MFS Premium Income Fund PIF

Breaker, would you please supply your latest email address
Thanks

Re: Octaviar MFS Premium Income Fund PIF

I don't remember "MFS Optimiser One" ever being mentioned on this thread. It was a long term investment scheme (up to 5 years with options to withdraw at a premium after 18 mths) that I was lured into by DM in 2006.

In May 2007 I received a letter from Guy H. saying that the PIF had bought out Optimiser One for $0.964cents per unit, however I was to be repaid at $1 per unit (clever ploy to cement my loyalty). He suggested that I re-invest with the PIF if I choose....and naturally I did!

Soon after we went to the "gorgeous" morning tea at a posh Melbourne hotel where no expense was spared, and anyone could have sworn they were firing on all fours....

Re: Octaviar MFS Premium Income Fund PIF

This is my first post and thank the 'old hands' for their time and effort in providing information through this forum. Also a big thank-you to the action group members for getting the class action underway.

Class actions of some years back were a trap for the unwary in that sometimes the payouts were less than the costs. A win could actually mean applicants had to pay the difference between costs and the pay-out. This appears not to be the case for this IMF agreement. However, can anyone explain the effect of clause 10.3 of the agreement? I would expect that property may well be used as a payment in kind if the action was successful. I would not like to have to pay a pro-rata cash equivilent into the trust account (presumably so that IMF could be paid) until such time as the property could be sold.

Cheers

lcee