Wellington Capital PIF/Octaviar (MFS) PIF

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

Quote: "If you don't know what you are dealing with, how can you develop a credible plan for dealing with it? That's why people often prefer the devil they know to the one they don't. The trouble is, devils are devils. They like to lull folk into a false sense of security. They connive with our inner demons to produce misplaced confidence. As long as we reckon we know what we are up against, we won't notice them siirring up more trouble behind our backs." (Does this ring a bell with anyone)

Charles36 fitting thoughts for this Halloween - looks like we are finally starting to exorcise our devils!:evilburn:

 

[charles36]

Re: Octaviar MFS Premium Income Fund PIF

You are right Marcom, the lights are on and there is someone at home. You can fool some of the people some of the time but not all of the people all of the time. Stay tuned. Like your posts.

 

[Cookie1]

Re: Octaviar MFS Premium Income Fund PIF

Here is an article from today's Weekend Financial Review also to do with ASIC going after MFS executives.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Here is an article from today's Weekend Financial Review also to do with ASIC going after MFS executives.

Thanks Cookie!! Your a legend!! This is a MUST READ!! It just gets beter and better. I hope ASIC can move faser than JH to catch Michael King and cohorts because JH has been on the battlefield chasing M King since 26th June last year and still hasn't caught him!!!!!!Seamisty

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

There will be three open hearings: the ASIC case, the Liquidator's examinations and the Class Action. We finally do seem to be seeing favourable signs. We certainly deserve them! And it does demonstrate that those of us who contacted ASIC didn't waste our time after all.

 

[Jadel]

Re: Octaviar MFS Premium Income Fund PIF

Yes Selciper I think everybody who took the time and effort to contact ASIC and place a submission to the Parliamentary Enquiry should be commended for their efforts.

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

Just to remind you about MFSIM's dynamic duo, here is a piece from the Sydney Morning Herald's CBD column on 11 Feb 2008:

Mark their words

Investor, a glossy magazine published by MFS and left in the lobbies of MFS hotels and properties, features golf tournaments sponsored by MFS, interrogating pieces on MFS products and illuminating interviews with MFS executives.

Take the December edition, which features an illuminating interview with Guy Hutchings, the chief executive of MFS Investment Management, and one of his fund managers, Marilyn Watts.

Hutchings runs the MFS Premium Income Fund, which manages about $770 million in funds and two weeks ago put a stop on punter withdrawals for six months, given the few issues the company is facing.

The parent company MFS remains suspended from trade as it tries to shore up its debt position with moves including emergency asset sales like the Stella tourism group.

Hutchings's breezy chat with Watts began with some of the broad challenges ahead. But, oh, the irony of what was around the corner.

Hutchings: "The US subprime debt problem looks like it will take a while yet to sort out."

Watts: "Yes, I think it will be well into 2008 before they see the worst of it."

Gosh, hope it's not going to get too much worse.

And among Hutchings's thoughts just weeks before MFS and its funds hit the skids: "I see the main risk from this US subprime problem being the flow-on effects to other borrowers around the globe. We still don't know which banks or other companies are holding the bulk of the losses. It's been the parcelling up of those dud loans and their on-selling to other banks and investors that is causing the current credit market problems." Oh, dear.

There's more from Hutchings. "Corporate America - and for that matter Corporate Australia - have their borrowing costs hitched to the wholesale money market rates."

Watts was a touch prescient: "I think investors this year [2007] have had quite a few surprises sprung on them and next year [2008] will probably be no different."

Watts even gave some tips on the importance of "actually understanding what you are investing in. There is no substitute for doing your own homework."

So there you go, straight from the horses mouth! - and we didn't really understand what they were trying to tell us.

 

[charles36]

Re: Octaviar MFS Premium Income Fund PIF

Can anyone recall the statement made by M/S Hutson that the directors and former RE only probably would have a million dollars between them and it was not worth spending a million dollars in legal expenses to pursue them. I am waiting to see what statement is made to the NSX within 48 hours from Friday by M/S Hutson as I guess we all are.

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

Re: Costs to list on the NSX

DUDWEISERS

"... The Newcastle Stock Exchange-listed beer maker Brewtopia Limited has taken the mantle for possibly the smallest corporate transaction of the year.

The firm is pressing on with plans to sell its beer operations for $10 after plans to outsource its operations to the Wetherill Park label manufacturer AC Labels last November appear to have backfired.

In the group's recent annual report, the chief executive, Liam Mulhall, described the original outsourcing deal as a ''major milestone''.

''We doubled our production capacity during this time and our revenues reflect [this] for the period,'' he reasoned.

But now Brewtopia has been forced to sell its beer business to AC Labels in order to extinguish the debts racked up over the outsourcing deal.

''The operational challenges and costs associated with maintaining a listing on the NSX has led the company to be in debt to its supplier, AC Labels Pty Ltd,'' Mulhall explained. ..."

{Emphasis mine}

http://www.smh.com.au/business/inspector-d-releases-the-news-hounds-20091004-ghv4.html

Is the NSX really expensive?

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

From Investor Weekly:

MFS fund unfazed by credit squeeze

By Vishal Teckchandani
Mon 05 Nov 2007

Research house Lonsec has maintained its investment grade rating for the MFS Premium Income Fund (MFSIM) following a recent review.

MFSIM fund manager Marilyn Watts said the fund was unaffected by this year's financial market volatility and credit crunch.

The $796 million fund had been structured for income dependability for investors who wanted monthly distributions, Lonsec said.

MFSIM invests in commercial loans, property-backed managed investment schemes, assets, cash and fixed interest securities.

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

Can anyone recall the statement made by M/S Hutson that the directors and former RE only probably would have a million dollars between them and it was not worth spending a million dollars in legal expenses to pursue them.

charles36, In a report on the Brisbane forum (post 706 page 36 7/7/08) DoraNBoots reported:

"Q: Are you pursuing people like Guy (Hutchings) for PI?

JH: As a group they only have $20mill PI that could be pursued and this is a tiny amount in relation to the fund."

Dora also commented: "I find this kind of answer very frustrating. She didn’t answer the question but it indicates to me the answer is no. I think every cent should be pursued; $20mill should not be scoffed at!"


I was at the Newcastle forum and recall that JH said the same thing and said something like "it is not worth spending $1Million of fund money to pursue PI worth only $20m." There was a comment from the floor to the effect that "$20m is a lot of money and should be pursued", to which JH replied "is it retribution that you want!", she then went on to another question.

 

[charles36]

Re: Octaviar MFS Premium Income Fund PIF

Marcom, I was the same meeting and heard the same comments but I also heard her say that she would chase them to the end of 'THE WORLD' which I thought at the time was odd because most people say the earth, what good would it be to chase someone to the end of the world, we would not be here to see the result. Cheers.

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

JH may think the end of the world is near!!!

See what Wellington gives for the NSX trading halt then...?

Regarding ASIC's claim in the Supreme Court of Australia, Mr King tells us that he is looking forward to the truth coming out regarding the MFS & PIF failures > :grinsking :casanova:



Just to inform - IMF Aust will shortly be sending out an update on matters class related - possibly this week sometime - to signed up class members is my understanding.

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

charles36, That quote was also in an article in The Australian on 26/6/08:

"I will chase that $147 million to the end of the world" Ms Hutson said. "I will stay on the battlefield untill I get it". http://www.newpif.com.au/articles/AUS_OBIseesred_260608.pdf

Yes it is a very strange mix of metaphors. Is there a battlefield at the end of the world????

But on a more serious note, after telling us all that it would not be cost effective to spend $1m to pursue the OCV directors and officers PI, JH turns around and in 2009 FY spends $2.997m in legal and professional fees the majority of which would have been on the OCV creditors action in the Qld Supreme Court.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

$130m holiday rental dream turns into a nightmare;;; Bridget Carter | November 02, 2009
Article from: The Australian
IT was a $130million waterfront resort promoters promised would become the pride of Port Douglas. Guests would pay a minimum of $1000 a night and investors would secure annual returns on their investment of as much as 7 per cent.

Now some of the 50-odd owners of the villas at the exclusive Peppers Bale Port Douglas, in north Queensland, have joined others around the country in declaring war on the resort's manager -- the former Stella Hospitality Group, rebranded as Mantra.

Owners of the villas at the resort, where Desperate Housewives star Teri Hatcher is rumoured to have stayed this year, claim Mantra is slashing rates so severely that, after deducting commissions and costs for the property's upkeep and management, they are essentially paying guests to stay.

Instead of guests being charged $1000 a night, as promised by resort developers MFS and Ray Group, they are being offered villas for as little as $200, the owners say.

Bruce Gold said he paid the Ray Group more than $1.6m for a villa at the resort. Now his investment was virtually unsaleable and it was costing him more in fees than he was receiving in income from his villa -- one of about 50 individually owned. The majority are managed by Mantra, which is owned by the private equity investor CVC Asia Pacific.

At a recent mortgagee auction, one of the villas had a reserve of half that price. Mr Gold said he was no longer paying Mantra, which also owned the Peppers brand, for its management services, and claimed other owners, including some overseas, were equally unhappy. "It is not just me. I might be dirty about it, but I'm not the only one," he said.

Mr Gold said the owners of the villas received only 45 per cent of the income, with funds going to the administrator of the resort owner.

The resort was part of the MFS group, which was renamed Octaviar after going into administration.

Mantra chief executive Bob East hit back at the villa owners, saying his company, which was brought in as manager only this year, had not promised the high rages of return.

"We have come in more recently and put the Peppers brand on top of the Bale brand to give it some market penetration," he said.

Mr East said it was the owners who had asked Mantra to manage the resort and, with realistic room rates it was approaching break-even.

"We called in the owners, saying we don't believe in what you are trying to do, we don't believe you are going to get $1000 room rates," he said. "We put realistic room rates into the market and we start running it as we see fit."

Mr East said the villas were being rented out at market rates.

"I understand (the owners') situation, but we are there because they paid us a fixed fee to try to get them out of trouble."

Mantra is facing criticism from other apartment owners around the country, including those who own apartments at the Mantra Circle on Cavill in Surfers Paradise and at the Mantra Ettalong Beach.

At the Ettalong Beach resort on the NSW central coast, some of the 236 owners are moving to rent out apartments individually.

Ettalong apartment owner Daryl Lynch said people had gone out on their own after paying about $100,000 more in costs each year than the almost $200,000 they believed would be the original amount.

"If you don't get enough occupancy you have to keep paying the fees and there is no return," he said.

Mr Lynch said the project was bought first by Outrigger before being managed by Mantra.

"Basically, our prospectus for the unit was to have 65 per cent occupancy within two years, conservatively. It is more like 40 per cent."

Apartment rates were supposed to average about $180 a night, he said, but some nights rooms were $99.

He had purchased his one-bedroom unit for $340,000, but he would be fortunate to receive $250,000 if it was sold, he said. "Right now, we are subsidising them dramatically."

At Surfers Paradise, Mantra is in a Federal Court battle with a private operator over the use of its trademark for the Circle on Cavill apartments.

Private operators of apartments in that building -- those who have elected not to pay commission to Mantra -- were told last week they were no longer able to promote their accommodation on the website roamfree.com.au.

Roamfree chief executive David Oliver said the contract stated that if a manager of a resort had a problem with private operators using the website, the company would support the manager.

The company was supporting Mantra because there were situations where private operators were trying to check in guests in the car park, Mr Oliver said.

"We want to make sure we look after managers and consumers."

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Well according to the NSX PIN is no longer in a 'trading halt', but no sign of any announcement!!! Seamisty

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

Well according to the NSX PIN is no longer in a 'trading halt', but no sign of any announcement!!! Seamisty

Thought trading halts were to ensure that there is an informed market in the trading of units in Premium Income Fund and an announcement to explain?

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Thought trading halts were to ensure that there is an informed market in the trading of units in Premium Income Fund and an announcement to explain?

I can't see any purpose to the exercise of requesting a halt then letting it expire without providing the promised fund update unless JH is stalling for time? Something doesn't gel here!!!! I wonder if JH as the RE had acess to the same documents/information that ASIC are using, or for that matter did Deloittes have the same info when they contracted David Anderson? This whole saga is starting to smell worse if that is at all possible!!!!! I hope ASIC come through with the goods. Seamisty

 

[mellifuous]

Re: Octaviar MFS Premium Income Fund PIF

I can't see any purpose to the exercise of requesting a halt then letting it expire without providing the promised fund update unless JH is stalling for time? Something doesn't gel here!!!! I wonder if JH as the RE had acess to the same documents/information that ASIC are using, or for that matter did Deloittes have the same info when they contracted David Anderson? This whole saga is starting to smell worse if that is at all possible!!!!! I hope ASIC come through with the goods. Seamisty

You raise an interesting issue -- and that is access to information.

ASIC has powers way beyond mere mortal managers.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

From ASIC media centre...
http://www.asic.gov.au/asic/asic.ns...nst+former+officers+of+MFS+Group?openDocument

09-214AD ASIC commences civil proceedings against former officers of MFS Group

Monday 2 November 2009


ASIC has commenced civil proceedings in the Supreme Court of Queensland against three subsidiary companies of the formerly listed MFS Ltd (now known as Octaviar Ltd (in Liquidation) and four former officers and one manager of MFS Investment Management Ltd.

The proceedings relate to the use of $147.5 million in funds of the Premium Income Fund (PIF), for which MFS Investment Management Ltd (‘MFSIM’, now known as Managed Investments Ltd) was the responsible entity at the relevant time.

In taking this action, ASIC is addressing the core obligations of a responsible entity and its directors and officers to operate the fund with care and diligence, and in the best interest of the fund’s members.

The defendants in the matter are:


Michael Christodoulou King of Canungra, Queensland, former Chief Executive Officer (CEO) and Director of MFS Ltd;
Craig Robert White of Holland Park West, Queensland, former Deputy CEO (and for a short period, CEO) and director of MFS Ltd and MFSIM;
Guy Hutchings of Paddington, NSW, former CEO and director of MFSIM;
David Mark Anderson of Robina, Queensland, former CFO and Company Secretary of MFS Ltd;
Marilyn Anne Watts of West Pennant Hills, NSW, former fund manager of MFSIM;
Managed Investments Ltd (formerly known as MFSIM and Octaviar Investment Management Ltd);
Octaviar Administration Pty Ltd (formerly MFS Administration Pty Ltd) (In Liquidation); and
Octaviar Castle Pty Ltd (formerly MFS Castle Pty Ltd and MFS Investment Holdings No 17 Pty Ltd).

ASIC is seeking orders for declarations of contraventions, pecuniary penalties, compensation and disqualifications from managing corporations.

A schedule of allegations and orders sought in relation to each defendant is attached.

The transactions:
ASIC alleges that in November 2007, officers of MFSIM caused PIF to transfer $130 million to MFS Administration Pty Ltd so that MFS Administration could use those funds to pay financial obligations of other MFS Ltd subsidiaries, including $103 million owed to Fortress Credit Corporation (Australia) Pty Ltd by MFS Castle Pty Ltd.

ASIC also alleges that in December 2007, officers of MFSIM caused PIF to transfer $17.5 million to MFS Pacific Finance Ltd, a New Zealand registered company (now known as OPI Pacific Finance Ltd (Receivers and Managers Appointed)).

ASIC further alleges that in about January 2008, officers and the fund manager of MFSIM created and used false documents, relating to the use of the $147.5 million.

As a result of the funds being transferred, ASIC alleges that the PIF suffered a loss of $147.5 million.

Background:
MFS Ltd was a publicly listed company with interests in financial services, travel and leisure and child care businesses.

MFSIM was an unlisted public company and wholly owned subsidiary of MFS Ltd (now in Liquidation). MFSIM was the responsible entity for six unlisted managed investment schemes, including the PIF and the Maximum Yield Fund (‘MYF’). MYF is also relevant to the current civil penalty proceedings.

The PIF was an unlisted managed investment scheme which offered investments to retail and wholesale investors through a Product Disclosure Statement.

Wellington Capital Ltd took over as responsible entity of the PIF in late 2008. PIF units have since been listed on the National Stock Exchange.