Wellington Capital PIF/Octaviar (MFS) PIF

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

I don't recall seeing this GG Bulletin item published on 12 September posted on this thread.

--------

"King: I'm not bankrupt
Nick Nichols, business editor | October 12th, 2009

"MFS founder Michael King has vowed to 'vigorously' defend a $650 million class action brought against him and his former company's auditors by Premium Income Fund investors.

The Gold Coast businessman, through his lawyer, also emphatically denied yesterday that he had been declared bankrupt.

The Gold Coast Bulletin yesterday reported Arthur Carney, of Sydney firm Carneys Lawyers, was not expecting a defence from Mr King against the class action as Mr King had been declared bankrupt.

"They (Carneys) have alleged to your reporter our client is bankrupt (when he is not)," wrote Mr King's lawyer, Mark Lacy, in a letter to The Bulletin yesterday.

Mr Lacy's statement was backed by Nick Mellos, trustee for a July agreement reached by Mr King with margin lenders to which Mr King and MFS co-founder Phil Adams owed about $127 million.

Mr King has agreed to repay an undisclosed part of the debt, thwarting bankruptcy proceedings.

"He is definitely not bankrupt," said Mr Mellos, a partner with Grant Thornton. He said the agreement was 'on track' and Mr King had 'some work to do' in order to make good on his commitments to creditors.

Meanwhile, in a broad response to yesterday's Bulletin report, Mr Lacy, of Hickey Lawyers, said allegations that Mr King was not planning to respond to the class action were incorrect.

"(Mr King) has never conveyed such fact to them (Carneys Lawyers) and, to the contrary, has conveyed any such action will be defended vigorously," wrote Mr Lacy.

"In circumstances where such basic facts are misstated, one must question the assertions made in connection with the class action itself.


"(Mr King) continues to deeply regret the financial loss many have suffered through the collapse of MFS ... and sincerely apologises for his inability to undo the events of early January 2008 once he had to resign as a director and CEO of MFS.

"In due course, he expects that the true causes of the failure of MFS will emerge, and the true people and organisations behind such failure will be identified, as will the wrongful conduct of those organisations and people."

Mr Lacy said Mr King welcomed the appointment of liquidators to MFS, which is now known as Octaviar.

"He has already indicated to such liquidators his full co-operation with such process and he looks forward to such investigation," wrote Mr Lacy.

"He personally intends to spend significant time in the next few years pursuing a range of people and organisations for their wrongful conduct in the demise of MFS and the losses caused to so many.

"Our client invites further investigations into the affairs of MFS as he believes, in due course, such investigations will show the true cause of (and people and organisations behind) the demise of MFS."

Mr Lacy said 'each and every independent investigation conducted to date has not identified one thing alleged to be wrongfully done by our client'.

"Our client expects in due course further investigations will continue to clear him of any wrongdoing concerning MFS."

Mr King also was prepared to spend the next few years defending the 'unblemished reputation and integrity' of former MFS staff who had been subjected to 'wrongful reporting concerning events at MFS prior to January 2008'.

These reports had left him 'deeply saddened' for staff he described as 'talented, loyal and dedicated'."

 

[Blueboy1]

Re: Octaviar MFS Premium Income Fund PIF

I don't recall seeing this GG Bulletin item published on 12 September posted on this thread.

--------

"King: I'm not bankrupt
Nick Nichols, business editor | October 12th, 2009

"MFS founder Michael King has vowed to 'vigorously' defend a $650 million class action brought against him and his former company's auditors by Premium Income Fund investors.

The Gold Coast businessman, through his lawyer, also emphatically denied yesterday that he had been declared bankrupt.

The Gold Coast Bulletin yesterday reported Arthur Carney, of Sydney firm Carneys Lawyers, was not expecting a defence from Mr King against the class action as Mr King had been declared bankrupt.

"They (Carneys) have alleged to your reporter our client is bankrupt (when he is not)," wrote Mr King's lawyer, Mark Lacy, in a letter to The Bulletin yesterday.

Mr Lacy's statement was backed by Nick Mellos, trustee for a July agreement reached by Mr King with margin lenders to which Mr King and MFS co-founder Phil Adams owed about $127 million.

Mr King has agreed to repay an undisclosed part of the debt, thwarting bankruptcy proceedings.

"He is definitely not bankrupt," said Mr Mellos, a partner with Grant Thornton. He said the agreement was 'on track' and Mr King had 'some work to do' in order to make good on his commitments to creditors.

Meanwhile, in a broad response to yesterday's Bulletin report, Mr Lacy, of Hickey Lawyers, said allegations that Mr King was not planning to respond to the class action were incorrect.

"(Mr King) has never conveyed such fact to them (Carneys Lawyers) and, to the contrary, has conveyed any such action will be defended vigorously," wrote Mr Lacy.

"In circumstances where such basic facts are misstated, one must question the assertions made in connection with the class action itself.


"(Mr King) continues to deeply regret the financial loss many have suffered through the collapse of MFS ... and sincerely apologises for his inability to undo the events of early January 2008 once he had to resign as a director and CEO of MFS.

"In due course, he expects that the true causes of the failure of MFS will emerge, and the true people and organisations behind such failure will be identified, as will the wrongful conduct of those organisations and people."

Mr Lacy said Mr King welcomed the appointment of liquidators to MFS, which is now known as Octaviar.

"He has already indicated to such liquidators his full co-operation with such process and he looks forward to such investigation," wrote Mr Lacy.

"He personally intends to spend significant time in the next few years pursuing a range of people and organisations for their wrongful conduct in the demise of MFS and the losses caused to so many.

"Our client invites further investigations into the affairs of MFS as he believes, in due course, such investigations will show the true cause of (and people and organisations behind) the demise of MFS."

Mr Lacy said 'each and every independent investigation conducted to date has not identified one thing alleged to be wrongfully done by our client'.

"Our client expects in due course further investigations will continue to clear him of any wrongdoing concerning MFS."

Mr King also was prepared to spend the next few years defending the 'unblemished reputation and integrity' of former MFS staff who had been subjected to 'wrongful reporting concerning events at MFS prior to January 2008'.

These reports had left him 'deeply saddened' for staff he described as 'talented, loyal and dedicated'."

It was previously on this thread (#4244)
Blueboy1

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Quote M King ;;These reports had left him 'deeply saddened' for staff he described as 'talented, loyal and dedicated'."
I wonder if Mr King is as deeply saddened as the tens of thousands of investors who trusted the dedication and loyalty of his former staff also? I also question the talents and abilities of his former senior financial advisors etc and seriously wonder if they were not in fact 'brainwashed'? Or were they like the poor investors, just plain 'greedy' for higher monetary reward? Were they prepared to do anything to get their fat pay checks and bonuses, did they seriously not know that our PIF assets were in fact not held by Perpetual Nominees in a separate trust which could not be touched? Did they seriously think that because for example Living and Leisure (previously MPY) was not a related party because it was a 'separately listed' company?
To be assured repeatedly that it was 'all good' even after the fund was frozen and there was nothing to worry about because the PIF was safe with Perpetual and FINALLY, nothing!!! Our loyal, dedicated and talented advisors did not want to talk to us anymore when the penny finally dropped!!!! They had been lied to, we had been lied to and it was time to jump the sinking ship and leave the poor unsuspecting, not so trusting investors to flounder and drown. Those same unsuspecting investors will probablly find it difficult to ever trust anyone regarding their life savings again and suffer anger and frustration when they see the same loyal, talented and dedicated former staff pop up again working in the same capacity for a similar business. In my case, Donna Meadows, my loyal 'senior financial advisor' and the 'national business development manager of MFS/OCV' is now
Business Development and Marketing Manager for Wealthfarm Financial Planners in Southport. I rest my case. Seamisty

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

... I wonder if Mr King is as deeply saddened as the tens of thousands of investors who trusted the dedication and loyalty of his former staff also? ...

I know it's a rhetorical question that you pose - but I'd guess it's one that no investor really needs to give any time to at all.

I think we have to realise we're on our own - and if we don't do something, no one else will.

As I look at all the wrecked and/or frozen funds I note that one thing stands out above all others, that ASIC either lacks the will and/or the resources to protect investors in the first place, and lacks the will and/or resources to pursue investors' rights after a managed fund goes pear-shaped under dubious circumstances.

Merely by not pursuing our rights, ASIC forces members to resort to class action specialists in order to recover, thereby causing investors to accept a substantial discount (more of less 30%) on the recovered amount (if any).

Nevertheless, something is better than nothing. Good luck with your class action... (sort of meant in the same spirit as one might say 'merry xmas').

But, you gotta hand it to these managers who control frozen funds, not too much somes out in the way of detailed information - at the very best, it's unsettling.

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Quote M King ;;These reports had left him 'deeply saddened' for staff he described as 'talented, loyal and dedicated'."

Just like the care and concern OCV had for us PIF investors? Leopard doesn't change its spots? OCV needs the staff to not break ranks? For now. But once they've served their purpose? PIF was sacrificed in Nov/Dec 08. Who's next?

I forsee a comic strip ending with those responsible (King?) riding off into the sunset on a polo mount, saddle bags-o-cash and the caption: SUCKERS.

Sadly OCV's not the first and very unlikely will be the last. Not even a first among equals.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

The silence is deafening!!!! Am I the only PIF investor totatally peed off with our current situation? I have spent the equivalent of two full time jobs times worth in unpaid hours researching and collating information that is relevant to our fund. It is getting VERY interesting!! After reading some of my research with provided links, another PIF investor suggested my research would be worth publicising and that is a potential outcome. Coincedential corporation connections or incentutious relations was the title suggested to me. I am not so sophisticated, I suggested 'the wheels on the bus go round and round'. Meanwhile, I will just keep dotting the i's and crossing the t's. For the life of me, I cannot believe we have been conned again!! Or if not, I am the first to give credit due, if and when it is deserved. If I had of held my breath waiting from our current RE for results from promises made which saw them elected they would be celebrating my death!! Unfortunately for them, I have the constitution of tenacious rat and am here for the long term. The ranks are strengthening, we will not be so easily 'shut up'. Seamisty

 

[Cookie1]

Re: Octaviar MFS Premium Income Fund PIF

I received a Google Alert for this article this evening; I don't know why it says "New Zealand entity MFS"??? Usually the Business Spectator is a bit more accurate.

From the Business Spectator
7:16 PM, 16 Oct 2009

Octavier liquidators secure $125m cash

By a staff reporter

Liquidators of Octaviar, formerly MFS, have secured $125 million in cash from the company, and are moving to sell its child care assets.

Hit by the credit crisis early last year, New Zealand entity MFS addressed its debt woes by selling a 65 per cent interest in its Stella tourism business – the largest travel and accommodation group in the country – to private equity firm CVC Asia Pacific for $409 million.

However, the move only delayed Octaviar's end, with the company placed in administration in September 2008.

Investigation into collapse

Adviser to Octaviar's creditors, Taylor Woodings partner Quentin Olde told a meeting of Octaviar's creditors he was confident there would be a complete investigation and full disclosure into all material regarding the group's collapse.

"Clearly there have been some questions asked about the conduct of the current and former directors of the Octavier group as well as some questions about a number of transactions that have occurred prior to and during the administration period," Mr Olde said.

Mr Olde said the appointment of Bentleys Corporate Recovery as new liquidators was a positive step, providing a truly independent platform for the investigations to take place.

Updating creditors at a meeting on Friday, the liquidators said they had terminated the employment of redundant employees, and begun closing down operations at Octaviar's head office.

Public examinations had been scheduled for the first half of 2010.

A Committee of Inspection had been formed, with the first meeting expected in the next month, to provide consultative assistance to the liquidators.

The liquidators also said they were continuing to liaise with the Australian Tax Office and the Australian Securities and Investments Commission.

www.businessspectator.com.au/bs.nsf...ecure-125m-cash-pd20091016-WVB85?OpenDocument

 

[Cookie1]

Re: Octaviar MFS Premium Income Fund PIF

I also received a Google Alert on this article of interest from Blake Dawson.

BANKING & FINANCE ALERT
16 October 2009
Octaviar: Leave to appeal filed with High Court on 15 October 2009
In brief
The judgment for the appeal in Re Octaviar was handed down by the Queensland Court of Appeal on 18 September 2009.
An application for leave to appeal the decision was filed at the High Court on 15 October 2009.

Leave to appeal
Earlier this year, the first instance judgment in Re Octaviar caused many market participants to reassess their approach to ASIC registrations for Transaction Document securities. The Re Octaviar decision raised questions as to whether the designation of new Transaction Documents, or amendments to existing Transaction Documents, required registration with ASIC under s268(2) of the Corporations Act 2001 (Cth) as a variation of a registered charge, even though the charge document itself had not been amended.
Due to the concerns created by the Re Octaviar decision, many banks as a matter of policy began to require all monies security on new transactions or, where Transaction Document specific security was accepted, adopted administratively onerous designation structures in order to ensure no commercially sensitive documents were required to be lodged with ASIC.
Last month, the Court of Appeal unanimously reversed the first instance judgment in Re Octaviar (see our Banking & Finance Alert – 18 September on the first instance case and subsequent appeal).
Although the Court of Appeal's decision was welcomed, market participants did not immediately revert to pre-Re Octaviar practice. For the last four weeks, they have been waiting to ascertain whether there would be a further appeal to the High Court.
An application seeking leave to appeal was filed with the High Court on 15 October 2009.

Grounds for appeal
Leave to appeal has been sought on the grounds that:
the Court of Appeal erred in concluding that a deed (Deed) designating a guarantee as a "Transaction Document" for the purposes of a registered charge did not vary the registered charge by increasing the liabilities secured by the registered charge within the meaning of section 268 of the Corporations Act 2001 (Cth) (Act); or
in the alternative, the Court of Appeal erred in concluding that the Deed did not constitute a new charge within the meaning of section 263 of the Act.

Going forward
Until the outcome of the application for leave to appeal is known, it is likely that banks will continue to follow a conservative approach requiring all monies security or the administratively onerous designation structures in respect of Transaction Document specific security.
We expect that any hearing of the application for leave to appeal will not be before February 2010, and could well be later given the limited sitting days of the High Court each month.

www.blakedawson.com/Templates/Publications/x_publication_content_page.aspx?id=56891

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Well I am 'encouraged' by the new liquidators actions. I just hope Mr Anderson's fees a renegotiated to a more reasonable level!! Seamisty
MFS directors to face the music Source: Gold Coast Bulletin
| October 17th, 2009

FORMER directors of Octaviar, including the Dubai-based Phil Adams, will be unable to hide early next year with a public examination set to lay bare the events that led the company's spectacular collapse.

Creditors of the failed financial services giant, formerly known as MFS, were yesterday told the new liquidators to the company, Bentleys, had wasted little time in trying to get to the bottom of the $2 billion hole left by the company's implosion early last year.

Bentleys has scheduled a month-long public examination of Octaviar directors, which would include founders Michael King and Phil Adams, and former chairman Andrew Peacock.

It will be a broad-ranging probe into the affairs of the company, a move yesterday welcomed by insolvency specialist Quentin Olde, of Taylor Woodings, an adviser to some creditors.

"Clearly, there have been some questions asked about the conduct of the current and former directors of the Octaviar group as well as some questions about a number of transactions that have occurred prior to and during the administration period," said Mr Olde.

He said a public examination would 'benefit all creditors'.

The Queensland Supreme Court last month replaced Deloitte with Bentleys as liquidator to Octaviar.

Bentleys held meetings in both Sydney and Brisbane yesterday to update creditors who are owed more than $2.2 billion by the failed company.

Liquidators Kate Barnet and Bill Fletcher revealed they had secured about $125 million in cash held by the company and had moved to shut down Octaviar's headquarters at Southport -- a once bustling hub that supported more than 250 staff across Australia.

Former Octaviar chief financial officer David Anderson, who has been assisting the liquidators' investigations, will likely stay on.


The liquidators said they were negotiating with Mr Anderson for an ongoing role.

The liquidators have placed all the company's remaining assets on the market, including the Sunkids childcare business, which was bought from Gold Coast developer Sunland in 2006.

While creditors welcomed the progress, some yesterday were concerned when they could expect a payout from the MFS wreckage.

Jenny Hutson, whose merchant bank Wellington Capital manages the Premium Income Fund, was yesterday frustrated that the $200 million held by Octaviar when the company hit the wall last year had now been whittled down to $125 million.

"There needs to be an urgency to get to the other end," she told the Weekend Bulletin.

"I think in five weeks (the liquidators) have made good progress.

"They seem to be going about it in a systematic fashion and quickly, but that rage needs to be maintained. There's been a lot of activity and action which hasn't resulted in a return to creditors."

PIF investors, mainly elderly retirees, are owed about $200 million by Octaviar.

Ms Hutson yesterday said the liquidators gave no indication of when a payout would be made.

She said it was likely to be some time next year.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Another media article relating to Octaviar Liquidation. Seamisty
Octaviar directors under microscopeLIQUIDATION SCOTT ROCHFORT
October 16, 2009
THE recently appointed liquidator of the collapsed Gold Coast finance concern Octaviar Limited has provided a glimmer of hope that creditors could still expect to salvage something out of the wreckage of the company formerly known as MFS Limited.

Bentleys Corporate Recovery told creditors at meetings in Sydney and Brisbane yesterday that it had secured $125 million in cash from the group and was moving to raise more cash from the sale of Octaviar's childcare business, Sunkids, which operates 20 centres.

The group has an estimated $1.7 billion of secured debts.

One month since replacing Deloitte as the liquidator under court order, Bentleys said it planned to hold ''public examinations'' in the first half of next year, which could shed more light into the dealings that led to the collapse of the financial group after it fell into administration in September 2008.

Bentleys said it had liaised with the Australian Securities & Investments Commission. Bentleys said it was also negotiating the former MFS chief executive David Anderson's ''ongoing role'' with the group, following a revelation in BusinessDay this week he was paid more than $940,000 in consultancy fees from the group's former administrator and liquidator Deloitte.

''Mr Anderson is on a pre-existing contract through a service company, which is controlled by Mr Anderson,'' liquidators Kate Barnet and Bill Fletcher confirmed in a statement.

Bentleys said it had started closing down Octaviar's offices and was in talks with the Tax Office to access $60 million that was under a ''freezing order''.

In the statement, the corporate recovery specialist hired by creditors, Taylor Woodings partner Quentin Olde, said: ''There have been some questions asked about the conduct of current and former directors of Octaviar group as well as some questions about a number of transactions that have occurred prior to and during the administration period.''

Source: The Sydney Morning Herald

 

[BootsnAll]

Re: Octaviar MFS Premium Income Fund PIF

Seamisty I would like to thank you so much for your research and postings on this site. It is the only way of keeping up to date on our stolen money. Please keep up the good work.

 

[zamitabha]

Re: Octaviar MFS Premium Income Fund PIF

Folks,

I bought MFS's share before they collapse...Then I received no more information from them except that they changed name to Octaviar. I just know that they are bankrupted now. Could anyone here kindly let me know, simply, is it still possible to get any money back from them? I got about $20,000 in their share before they collapse.

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

This article about MFS appeared in the Australian on January 21 2008. It describes MFS events at that time as they saw them. I'm looking forward to the public examinations!
-------------------
Debacle at MFS a lesson to others
Adele Ferguson | January 21, 2008

THE 70 per cent share bludgeoning of Gold Coast financial services and tourism group MFS is a lesson to all companies with opaque balance sheets and high debt levels: the jig is up.

The lesson to investors is to steer clear of complex companies that have been using financial engineering. And for financial analysts, it is to be far more prudent when putting valuations on companies they patently don't understand.

On January 15, three days before the MFS share price meltdown, Macquarie Equities put out a report with an "outperform" recommendation and a 12-month share price target of $7.15. At the time its shares were trading at $3.94. They are now trading at $1.

The analyst, Mark Carew, wrote the report on the back of a proposal from City Pacific to acquire the whole of MFS's business excluding the Stella travel group. He wrote: "This partial takeover bid is a positive development for MFS and provides a valuation data point for the financial services division. We expect another potentially positive announcement on Friday this week as to the December quarter assets under management figure, which should show good growth despite fragile equity market conditions."

How wrong he was. Friday's announcement included plans to split the company and raise $550 million through a rights issue to fund short-term debt.

The result was $1.5 billion wiped off the company's market capitalisation, and heightened scepticism about MFS's accounts and corporate structure - and whether it is under more financial pressure than it is giving away.

What happened next is a travesty. MFS chief executive Michael King said: "We don't actually need the equity. We could stay as we are and keep going. Our earnings guidance is unchanged and there is no change to our debt position."

Given the 70 per cent share price fall on Friday, if King is serious about pulling the rights issue, he should do so immediately. MFS is one of the most financially impenetrable companies on the ASX. It has also been one of the most acquisitive - just two weeks ago it announced it was interested in buying the management rights to the shopping centres in the failing Centro Properties Group, a move that caused its shares to slump 11 per cent. And it is one of the stingiest companies when it comes to releasing information.

In an investment climate that is punishing companies that aren't transparent, MFS's fatal flaw was to announce a rights issue, and then let slip that it would use the funds to repay inter-company loans as well as a short-term debt facility due in March.

This was in sharp contrast to an announcement made by King in November that the company would not need to raise new equity.

This, coupled with revelations that it had company loans and debts of up to $900 million owed to UBS and Investec, has done nothing to pacify investors about the company's debt profile.

MFS was founded in 1999 by two criminal lawyers, Phil Adams and Michael King, to specialise in funds management. Since then it has made its name by styling itself on Macquarie Bank and Babcock & Brown. In recent years, the company has made countless acquisitions, including Harvey World Travel, Gullivers Travel Group, Let's Go Travel, Saville Hotel Group, Peppers Resorts and the S8 resorts and travel business, spun off a stake in funds management company HFA Holdings and created a range of listed and unlisted property trusts.

Then last year, the public face of the company, Phil Adams, left Australia to run the company's Dubai operation.

This was followed by the aborted sale of a 50 per cent stake in its Stella tourism business.

MFS appointed UBS to find an equity partner for its Stella Group, for about $1.2 billion, and to keep management control.
The plan was to use the funds to beef up other parts of the MFS empire, then list the Stella entity on the Australian Securities Exchange in the next two or three years. The deal, with CVC Asia Pacific, fell over in November with virtually no explanation.

The task was always going to be a challenge, given that the various assets inside the Stella Group had not been merged, and one of the Stella Group's key assets, S8, which MFS acquired in 2006 for $700 million, was under investigation by the Office of Fair Trading (OFT) in Queensland.

The OFT investigation followed allegations of double-dipping on holiday bookings, by allegedly redirecting tourists to book holiday units through its retail and wholesale businesses, enabling them to claim extra commission potentially worth millions.

S8 was also in dispute with the body corporates of certain properties, specifically Equinox, Aruba, Phoenician, Sirocco, Zanzibar and South Pacific Noosa, over allegations that they were claiming too much commission.

And buried on page 94 of its 113-page financial accounts is a note for a contingent liability of $27 million.

The only explanation is the following: "A controlled entity is the subject of a counter-claim of approximately $27 million made by a party against which the controlled entity had launched recovery proceedings for fees owed in 2002. Such counter-claim was not foreshadowed until the controlled entity had launched its own recovery proceedings in 2003.

"The controlled entity's view is that the claim is frivolous and without merit. The allegations are denied and this counter-claim is being strenuously defended.

"There are a small number of other legal actions in which the company or controlled entities are involved. However, the amounts involved are not material," according to the full year financial accounts.

But, like most companies that make a lot of acquisitions, raise a lot of equity and compare themselves to investment banks, the accounts of MFS are hard to penetrate and often attract controversy.

For instance, there is controversy over the sudden resignation of Michael Hiscock on January 16 for "personal circumstances".

The day before he had put out a change of director's interest notice showing he had sold 500,000 shares, due to a margin call on the shares. These shares were sold during a black-out period when the company was discussing restructuring plans and an equity issue.

This is scandalous and the spotlight should be put on chairman Andrew Peacock to fully explain whether other directors are vulnerable to a similar thing.

The reason is simple: directors such as Michael King own 6.6 per cent of the company, and so any forced sale would have a significant impact on the share price.

At the group's annual meeting in November, Peacock referred to the outlook for the company: "MFS is well positioned for another year of substantial growth across its businesses in financial 2008. The company will enjoy a full year's contribution from our more recent tourism-related acquisitions while our deal pipeline is considerably stronger and more diverse now than at the same time a year ago.

"The Australian funds management business is targeting at least $10 billion of fee paying Assets Under Management by June 30, 2008, despite recent equity and debt market volatility.

"Our investment banking business is pursing an abundance of opportunities in Australia while Stella Group's first quarter - traditionally its slowest quarter - is well ahead of plan."

MFS will no doubt join the growing list of companies facing class actions by aggrieved shareholders over lack of information.

The big question is, when will the board and senior management take responsibility for their actions and fall on their swords.

 

[Mary Lynch]

Re: Octaviar MFS Premium Income Fund PIF

"Criminal" lawyers is right...lol!

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

"Criminal" lawyers is right...lol!

Perhaps they were 'conned' into taking lessons in lieu of fees Mary?

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

Yesterday I attended the "launch" of the renamed ICON apartments 20-22 Mort St Port Macquarie which has a mortgage to our fund of $28M. The project is being marketed with the comment in the sales brochure "serious developers seek early sales".

The new builder has been busy completing the second of two town houses on the site as well as finishing the interiors of the 24 units - one furnished unit is open for inspection. The 2 town houses are being separately split off from the units strata. Ray White and L J Hooker are jointly marketing the units and town houses.

Three units have been sold and 4 others are on "hold". The unit pricing contained in the sales flyer is as follows:

Level 1 6 units X $650,000 = $3.9M
Level 2 6 units X $725,000 = $4.35M
Level 3 6 units X $825,000 = $4.95M
Level 4 6units X $1.2M = $7.2M
The 2 town houses are $TBA but they should get at least $0.8M.

Total sales = $21.2M LESS commissions, builders costs etc etc etc.

Presume that the $28M carrying cost includes interest, but we will be a long way short on this one.

I do not know why JH thinks that details of the PIF projects are so confidential that she will not even disclose the address - except that we may find out the poor grade of assets in which our money has been invested.

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

Yesterday I attended the "launch" of the renamed ICON apartments 20-22 Mort St Port Macquarie which has a mortgage to our fund of $28M. The project is being marketed with the comment in the sales brochure "serious developers seek early sales".

The new builder has been busy completing the second of two town houses on the site as well as finishing the interiors of the 24 units - one furnished unit is open for inspection. The 2 town houses are being separately split off from the units strata. Ray White and L J Hooker are jointly marketing the units and town houses.

Three units have been sold and 4 others are on "hold". The unit pricing contained in the sales flyer is as follows:

Level 1 6 units X $650,000 = $3.9M
Level 2 6 units X $725,000 = $4.35M
Level 3 6 units X $825,000 = $4.95M
Level 4 6units X $1.2M = $7.2M
The 2 town houses are $TBA but they should get at least $0.8M.

Total sales = $21.2M LESS commissions, builders costs etc etc etc.

Presume that the $28M carrying cost includes interest, but we will be a long way short on this one.

I do not know why JH thinks that details of the PIF projects are so confidential that she will not even disclose the address - except that we may find out the poor grade of assets in which our money has been invested.

I couldn't imagine any properties would be sold at the asking price - you might further discount 'Total sales' by allowing for sale price discounts, after all, it's a buyer's market.

We've just seen some of the FMF's security assets knocked off at discounted prices. One asset went for $80m and we stand to lose about $135m - we don't even know the true figures. Although City claimed 40% ownership in the project ('Pacific Beach'), it was never declared as a related party transaction.

Neither manager has really told investors about the details of the deal - we only know what we hear in the media. Since the loan wasn't declared as 'related', then it wasn't separately disclosed in financial statements.

$205m (or more) was lent - $100m went to acquire the property - but no further work was carried out on the site. It's a good read to see just what can be promised and how little really needed to be done.

We also have a dud deals yet to be fully disclosed at Grande Pacific at the Broadwater, and down at Martha Cove.

Of course, ASIC didn't care. ASIC did care enough to go to bat to get back $2m for the CBA (info from the Storm thread) - but for us, nothing.

The winners -> fund managers, real estate agents, liquidators, receivers, consultants, lawyers .. yes, etc. etc. etc.

Ah! the frozen fund is truly a 'manager's delight'. Watching all the frozen funds moving along is like looking at a train wreck is super slow motion.

We really should get together and get the government to enact laws to force managers to provide (1) complete details on ALL loans, (2) debt, and (3) expenses, at least while funds are frozen.

While the funds are frozen, managers do not give information and seem to have a free hand to do as they like without regard to investors' concerns.

There is always a review, a strategy, or a promise - but nothing happens - delay, delay, delay - our money melts away before our very eyes and there is nothing we can do about it.

We just get the surprises when we read the finanicals which come months and months after the deeds are done.

.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

'Presume that the $28M carrying cost includes interest, but we will be a long way short on this one.':: From memory from an earlier enquiry to WC I don't think interest is included marcom. Also if she manages to get the full $21 mill then that is even short of the amount needed to give us our 3cents so JH will have to quit more assets to pay herself management fees. So much for re building and stabilising the PIF. JH said the PIF was stabilised in June 2008, if it was so bloody stable, why did it incur impairment and losses of $36.4mill in 2009?!!!!!! I am becoming more and more concerned as to JH's ability to do anything more than act as an expensive liquidator and procurer of mezzanine finance from a provider I believe she has had prior business dealings with. The evidence of an astute, successful business person in control of our fund is yet to be proved and I shudder to think what the true unit value of the PIF is now, NOT after we receive our 3 cents of capital from the sale of dwindling PIF assets. How can you rebuild and strengthen something that is no longer there and the proceeds are not re invested. The heady days of boom where Funds had money to burn and deals were done on inflated prices to procure kick backs are over! I welcome any investigation into the past and present dealings of PIF related business, I just wish it was not so slow.
'I do not know why JH thinks that details of the PIF projects are so confidential that she will not even disclose the address - except that we may find out the poor grade of assets in which our money has been invested.'
Exactly, it will be interesting to see how much we end up with from the Wollongong Hotel JV deal with the original builder/developer. I know when I enquired with the Real estate marketers after the auction, I was told an offer of $40 mill had been passed in but they were still in negotiation with a potential buyer. I will be peed off if we end up with less than the offer! Seamisty

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Quote mellifuous:'We really should get together and get the government to enact laws to force managers to provide (1) complete details on ALL loans, (2) debt, and (3) expenses, at least while funds are frozen'
I was hoping something like that would be the outcome from the The Parliamentary Joint Committee on Corporations and Financial Services enquiry mellifuous. Otherwise it will be a complete waste of time and tax payers funds.
How do you propose it could be done by us mere mortals? Seamisty

 

[Cookie1]

Re: Octaviar MFS Premium Income Fund PIF

My husband and I also went along on Friday to have a look at the Aston Hill Apartments (rebadged "Icon Apartments") since we have a personal stake in the project. I forgot to ask about the Townhouses so, thank you, Marcom for that update. There was no price on the sales sheet so I wasn't sure if they were even built.

Further to Marcom's description: All the apartments are 3 BRs (quite spacious) & 3 baths (with square sinks...hard to clean), Miele appliances, also a computer alcove. Total living area is from 179-195 square meters. Penthouses and ground level apartments have large terraces and the rest have good sized balconies and all have parking for 2 cars. There is visitor parking under the building, then a secure area for owners with marked parking spaces and no extra storage (which I found surprising). All apartments go through from front to back, so should have water views.

In JH's August Investor update she said "A developer known from a previous transaction put forward a proposal to complete the property and assist the Fund to market the units in return for a modest share of the profits." It would certainly be good to know what % a "modest share of the profits" is and a lot more transparency. Let's just hope there IS some profit.

We saw the initial presentation by David Bloomfield (original developer) when they first started selling off the plan and prices up to at least $1.75m were mentioned (can't remember exactly any more). Back then I had bad vibes about him, not realising or knowing that some of my money was supporting the development. We asked where he expected to find his market and he told us those "cashed up" Eastern suburbs and North Shore people in Sydney; we wished him luck. He obviously needed a lot more luck than he got and so do we.

There are a number of luxury apartment/unit buildings in Port Macquarie with units that have been for sale for 3+ years, so I won't hold my breath that these units are going to sell like hot cakes!

I suggested to the fellow from LJ Hooker that if they would take the amount of my investment off the price of one of the apartments, I thought I could live there and I would consider that I had at least partly recouped my investment. LOL.