B
Blueboy1
Guest
Re: Octaviar MFS Premium Income Fund PIF
PART TWO............
ASIC then claims that White told King he knew of a way to "obtain $150 million", use part of that to satisfy Fortress, and "undertake . . . transactions which would legitimise the use".
Interestingly, in spite of ASIC supporting other allegations against the men by referring to admissions made in their section 19 interviews, the claim document does not reveal how the commission knows that White made that proposal, or that King agreed to it ”” or even if anyone else was party to the conversation and told ASIC.
It goes on to say White knew that MSF Investments had a $200 million credit line with Royal Bank of Scotland for Premium Income Fund, and that on November 27 (the day after the Fortress deal), he jointly signed a request to draw down $150 million of that.
On Friday, November 30, in ASIC's view, the millions zapped quickly from one account to another. RBoS sent its $150 million into PIF's operating account (held under the name of PIF's custodian, Perpetual Nominees) at CBA's Southport branch. MFS Investments then crossed $130 million to another account at the same branch, owned by MFS Administration, which in turn had by mid-afternoon sent $103 million to Fortress' National Australia Bank account.
ASIC says that last transfer was cash belonging to PIF investors, and that under the fund's constitution should have been put into recognised investments.
A month later, the day after Boxing Day, another $17.5 million was moved from PIF's account to another at the Southport CBA ”” this time for the benefit of MFS Pacific Finance in New Zealand, where ASIC alleges it was used to pay redemptions for debentures and noteholders at a time when nervous investors in NZ were withdrawing funds.
ASIC argues that only three days later, on December 30, MFS Investments put PIF's finance from Royal Bank of Scotland in jeopardy by allowing the fund's ratio of assets and liabilities to breach the limit allowed under the loan.
It was three weeks, January 23, before RBoS sent a formal "Event of Default" notice ”” and by then King had already been forced out after $1 billion of MFS's market worth was destroyed when its shares crumbled from $4 to 99 ¢ (triggering the margin calls on his and Adams' shareholding, and that of another director, Michael Hiscock), trading in the shares was suspended (as it turned out, forever), MFS had revealed its debts were larger than thought and that pretty much all its assets were for sale.
ASIC says that the very next day, White and Anderson ordered staff to begin drawing up documents to show the $147.5 million had been invested on PIF's behalf.
A week later, RBoS's Bailey demanded details of where its money had been spent. ASIC says that of the list of 12 loans produced by Anderson, and amended by White, only three, totalling almost $53 million, related to the bank's cash.
It contends that from around early February a series of documents were created, revolving around another MSF Investments-managed fund, Maximum Yield, issuing special units to other MFS group companies that paid for them using loans from PIF ”” thus justifying the $150 million drawdown of money from RBoS.
The documents were signed and backdated, says ASIC, and created a trail that even convinced its auditor, PricewaterhouseCoopers, and external lawyers, Mallesons Stephen Jaques, that there had been no breaches
PART TWO............
ASIC then claims that White told King he knew of a way to "obtain $150 million", use part of that to satisfy Fortress, and "undertake . . . transactions which would legitimise the use".
Interestingly, in spite of ASIC supporting other allegations against the men by referring to admissions made in their section 19 interviews, the claim document does not reveal how the commission knows that White made that proposal, or that King agreed to it ”” or even if anyone else was party to the conversation and told ASIC.
It goes on to say White knew that MSF Investments had a $200 million credit line with Royal Bank of Scotland for Premium Income Fund, and that on November 27 (the day after the Fortress deal), he jointly signed a request to draw down $150 million of that.
On Friday, November 30, in ASIC's view, the millions zapped quickly from one account to another. RBoS sent its $150 million into PIF's operating account (held under the name of PIF's custodian, Perpetual Nominees) at CBA's Southport branch. MFS Investments then crossed $130 million to another account at the same branch, owned by MFS Administration, which in turn had by mid-afternoon sent $103 million to Fortress' National Australia Bank account.
ASIC says that last transfer was cash belonging to PIF investors, and that under the fund's constitution should have been put into recognised investments.
A month later, the day after Boxing Day, another $17.5 million was moved from PIF's account to another at the Southport CBA ”” this time for the benefit of MFS Pacific Finance in New Zealand, where ASIC alleges it was used to pay redemptions for debentures and noteholders at a time when nervous investors in NZ were withdrawing funds.
ASIC argues that only three days later, on December 30, MFS Investments put PIF's finance from Royal Bank of Scotland in jeopardy by allowing the fund's ratio of assets and liabilities to breach the limit allowed under the loan.
It was three weeks, January 23, before RBoS sent a formal "Event of Default" notice ”” and by then King had already been forced out after $1 billion of MFS's market worth was destroyed when its shares crumbled from $4 to 99 ¢ (triggering the margin calls on his and Adams' shareholding, and that of another director, Michael Hiscock), trading in the shares was suspended (as it turned out, forever), MFS had revealed its debts were larger than thought and that pretty much all its assets were for sale.
ASIC says that the very next day, White and Anderson ordered staff to begin drawing up documents to show the $147.5 million had been invested on PIF's behalf.
A week later, RBoS's Bailey demanded details of where its money had been spent. ASIC says that of the list of 12 loans produced by Anderson, and amended by White, only three, totalling almost $53 million, related to the bank's cash.
It contends that from around early February a series of documents were created, revolving around another MSF Investments-managed fund, Maximum Yield, issuing special units to other MFS group companies that paid for them using loans from PIF ”” thus justifying the $150 million drawdown of money from RBoS.
The documents were signed and backdated, says ASIC, and created a trail that even convinced its auditor, PricewaterhouseCoopers, and external lawyers, Mallesons Stephen Jaques, that there had been no breaches
