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Wellington Capital PIF/Octaviar (MFS) PIF

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Re: Octaviar MFS Premium Income Fund PIF

mellifuous said:
Why? Because there is no point complaining to the very entity you complain about.

How about ASIC?

No harm in shooting off an ecomplaint in parallel to a complaint to the Ombudsman.

..
Click to expand...
Yes mellifuous, I will after all the effort that was put into it. Cheers, Seamisty
 
Re: Octaviar MFS Premium Income Fund PIF

Wellington Capital is now proceeding with another legal action about the Mirage Gold Coast sale to Pearl, and of course another loss, will cause e few more million dollars coming out of our Fund.

She will NOT pay any 3c distribution at any time, according to my sources.

And why would she, as she is surviving very nicely on the legal action's
income.

Wellington must RESIGN and hand the Fund to someone else.

Why cannot we convene a Unit Holders meeting and do this?
 
Re: Octaviar MFS Premium Income Fund PIF

Brett Heading is Chairman of Trinity Limited and Trinity Funds Management.

Trinity investors in dark on $19.8m debt

* Anthony Klan
* From: The Australian
* February 04, 2010 12:00AM

EMBATTLED Queensland property group Trinity has yet to materially claw back any of the $19.8 million owed by its "project partners", despite protracted negotiations and legal actions.

Six months since Trinity suffered a management spill amid a scandal over a $1m secret payment it made to lobbyist Ross Daley, the group appears to have also made little headway on its promise to improve transparency.

In late December the listed Trinity settled a legal case brought by a company controlled by project partner Martin Spinks, but refused to cite the terms of the settlement.

According to the company's accounts, debts owed by several other project partners are included in the outstanding $19.8m.

With the exception of former Trinity director Don O'Rorke, whom Trinity has sued in a bid to recover about $3m, investors do not know the state of those negotiations, how much those partners individually owe, or even who they are.

Trinity's $1m payment to Mr Daley, supposedly for helping secure a $100m investment for the group from funds giant Sunsuper, was at the heart of the allegations of poor transparency levelled at the group.

Trinity said it would sue Mr Daley in a bid to recover the money.

On Christmas Eve, the group announced it had dropped the action and settled with Mr Daley, but would not provide details of the settlement amounts or terms citing "confidentiality".

Amid the scandal of the $1m fee, Trinity engaged Deloitte to conduct an investigation into the payment, but Trinity refused to release that report, on the grounds that it could hurt the group's legal case against Mr Daley.

The group has since declined to release the report, despite ending its case against Mr Daley, meaning investors will most likely never know why the fee was paid.

"Our position in respect of not releasing the report is unchanged," Trinity joint managing director Steve Leigh told The Australian yesterday.

Mr Leigh refused to comment on speculation that Mr Daley had kept between $500,000 and $600,000 of the payment and repaid the rest.

Mr Daley has repeatedly declined to comment.

Keeping a close eye on Trinity is a group of institutional investors, including Sunsuper, known as the "investors representative committee".

The group is expected to announce within days whether it will follow through with a move to put out to tender the management of Trinity's $800m of property trusts, after last year forecasting that it would probably come to a decision by the end of January.

Trinity declined to comment on the progress of discussions with the representative committee, but the committee is unlikely to remove Trinity as fund manager.
 
Re: Octaviar MFS Premium Income Fund PIF

selciper said:
Link to Financial Ombudsman site is:

http://fos.org.au/centric/home_page.jsp
Click to expand...

Why doesn't one of you go and get a new manager to take over the fund?

or alternatively, it only takes 100 member to force the manager to call a meeting - all you have to do is get a proposal together -

eg. Proposal 1 -- delist the fund
Proposal 2 -- disclosure
Proposal 3 -- etc.. ect...

Trouble is that you need 75% to get the vote passed.

It seems to me to be the most practical way to get yourselves out of the position your're in.

Some of us in the PFMF are aready in contact with a prospective manager.

We just can't sit by and complaint and see all this crap going on day after day without doing something constructive.

Complaints to ASIC (or anyone else for that matter) are proving useless. Yes, we have to keep them up, but they're not proving of any value - and in the end, we don't get feedback anyway - so, how could we possibly know if our complaints have been taken notice of?

It's all bs - no one cares - if investors do nothing, then no one else will.

..
 
Re: Octaviar MFS Premium Income Fund PIF

Of course, to get rid of the manager, and to ensure you don't have to pay $8m to her company as a 'termination fee', you'd have to have two meetings, each on different days (I would think), the first to amend the constitution to repeal the 'termination fee', and the next meeting to terminate the manager (if you have a replacement one).

Of course members could apply to the court and ask the court to appoint a manager to wind up the fund.

I would think that paying a professional for some advice about these issues would be money well spent.

..
 
Re: Octaviar MFS Premium Income Fund PIF

In the Brisbane Supreme Court today:

RE: OCTAVIAR LIMITED (FORMERLY MFS LIMITED) Justice Philip McMurd
Court 15 Floor 3 9:15 AM
(Costs Judgment)
 
Re: Octaviar MFS Premium Income Fund PIF

An interesting piece of research on class actions in Australia:

Business Spectator 5 February 2010
Ken Adams and Damian Grave

Litigation funders or bounty hunters?

There is a lot of hysteria surrounding class actions in Australia and unfortunately for all parties involved it can lead to some serious misconceptions about what's happening in the local legal sector.

For example, following the settlement of the GIO class action a leading practitioner said he had been “…warning anyone who would listen about the danger of ‘Wild West bounty hunters’ turned class-action litigators”. Fear of a burgeoning US-like class action society can be detected in, and influences much of, the debate concerning class actions.

This type of misconception about class actions and litigation funding has been dispelled by a recently released empirical study by Monash University’s Professor Vince Morabito.

On some occasions the hyperbole is understandable and grossly inflated damages claims are frequently the subject of intense media interest. Telstra, a company with an outstanding reputation for market disclosure, was sued by 'angry investors' for at least $300 million. There was little media attention of the near total failure of the case when it settled for an ultimate payment of about $2.4 million as it was cheaper to do so than proceed to trial.

Similarly, Esso defended the so-called $1 billion class action arising from the explosion at its Longford plant, which it ultimately settled for $32 million, or about 3 per cent of the amount claimed. Considerably less media attention is often given to the unspectacular results of many class actions than the more spectacular allegation.

But the findings of this new report and the ongoing study will enable us to determine whether the legislative objectives of class actions are met. The objectives are to provide an efficient and effective means of resolving multiple claims, and to provide access to justice. In providing better access to justice, there has been a concern expressed not to encourage abuse or the pursuit of the trivial.

Amongst all this noise, it is useful to have regard to the facts. Here are seven findings that are contrary to popular misconceptions about Australian class actions.

Myth 1: There are vast numbers of class actions.

There has been an average of 14 class actions a year since the introduction of the statutory class action procedure in 1992. There are many examples of multiple class actions concerning the same subject matter so that the number of disputes that is the subject of a class action is less than 14 per year. In the 17 years that Australia has had a class action procedure in the Federal Court, class actions represent less than 1 per cent of all cases in that Court in each of the 17 years.

Myth 2: The number of class actions is exploding.

In the first quarter of the 17-year period (i.e. four years and three months) that Australia had a class action procedure, there were relatively few class actions. Numbers increased in the second quarter and have been in decline ever since. In the last three quarters of the 17-year period, class action numbers have declined from 92, to 63 and to 53 in the final quarter.

Myth 3: Litigation funding is increasing the number of class actions.

Australia’s largest litigation funder listed on the ASX in 2001. Amongst the leanest years for class actions were 2004 and 2005 when just four and five class actions were commenced respectively.

The High Court’s decision in the Fostif case in August 2006 gave judicial approval for litigation funding, where previously there had been some doubt about its lawfulness. One might then have expected an increase in class actions post-Fostif. In the 2006-07 financial year in which Fostif was handed down there were 19 class actions. In the following two financial years there were 21 and 11. Although more time is required to draw definitive conclusions about the role of litigation funders on class actions, there is no immediately observable spike in the number of class actions post-Fostif.

Myth 4: Class actions are usually successful.

As often as not, class actions fail. Either the application is dismissed (21 per cent), the proceeding is discontinued (18 per cent) or the proceeding limps on, but not as a class action (12 per cent). In total, 51 per cent of the time the class action does not continue or does not continue as a class action.

Myth 5: Class actions are the product of ambulance chasing.

Class actions are not only commenced by inappropriately described “ambulance-chasing” lawyers. The largest user in recent times has been ASIC, although it should be observed that each of the nine class actions it has recently commenced arise from the failure of Westpoint.

Myth 6: Most class actions are shareholder class actions.

When reading the financial press one could easily assume that there was an avalanche of shareholder class actions. While rising in prominence, shareholder class actions in the past five years represent only 25 per cent of all class actions. Historically they have been a smaller portion of all class actions, representing only 10 per cent over the last 17 years.

Myth 7: Class actions are taking longer and longer.

Close to 70 per cent of all class actions were concluded within two years, and the average duration is declining.

The study is yet to resolve whether the class action procedure meets its statutory objectives of efficiency and effectiveness, and provides access to justice.

The further findings of this important study should enable a meaningful assessment to be made of whether class actions meet the statutory objectives of efficiency, efficacy and access to justice. In the meantime, the preliminary report recording facts including those outlined above will provide a foundation for a more informed debate about the risks posed by, and the utility of, class actions.

Ken Adams and Damian Grave are partners at Freehills.

Footnote: Freehills is a sponsor of the empirical study; and Freehills acted for Telstra and for the State of Victoria in two of the class actions mentioned in this article.
 
Re: Octaviar MFS Premium Income Fund PIF


Hi Marcom,

The research in your posting is precisely why I'm concerned for the outcome for members of the PIF.

If too much reliance is placed on the class action, and the class action is not successful, then the remaining options for members of the PIF are not good.

Depending on what 'deferred tax' means, and even if ASIC is successful (or not) in recovering the $150m or so, then that money would go back to the fund and could become a tax problem for members.

If the fund was unlisted, then there are absolutely no tax implications.

As far as I can see, the listing of the PIF does not offer members of the PIF one iota of a benefit, in fact, it is quite the contrary.

..
 
Re: Octaviar MFS Premium Income Fund PIF

Money Management.

IMF to pursue class actions, forced to wait on Great Southern

5 February 2010 | by Chris Kennedy
Print this article Comments Bookmark and Share

Litigation funding group IMF Australia has been successful in receiving an exemption from ASIC from having to register several class actions as managed investment schemes (MISs) but group actions including Great Southern were declined exemption, according to IMF.

The Centro, Westpoint and Premium Income Fund class actions were among those granted exemptions, but IMF said that it would have to wait until June 30 for a decision from ASIC about whether group actions including Great Southern and Australian Stockbroking and Advisory Services would be classed as MISs.

IMF was currently looking at several options, including registering the remaining group actions as MISs, a company spokesperson said. It was also possible that IMF would just act for sophisticates and not for retail clients, but any decision would be made after ASIC’s ruling on June 30, he said.

In October a Federal Court overturned an earlier decision stating that a funded class action did not fit the definition of an MIS. No court has yet declared that funded group actions are MISs, according to IMF.

That's a relief !
Blueboy1
 
Re: Octaviar MFS Premium Income Fund PIF

was anybody short MFS with CMC markets when they went into suspension?

I am in a dispute with CMC over a position held in MFS when they went into suspension.

If you did hold a short position with CMC Markets back in early 2008 when they were suspended can you please advise if:

i. you short position was closed out at the last traded price; or
ii. was your short position held and honoured through to the delsiting and closed out at a price of $0.000?

Responses much appreciated.

Thanks.
 
Re: Octaviar MFS Premium Income Fund PIF

I think you've all been duped. (sorry 'duped', no pun intended)

IMO the very reason that so many of you voted was to avoid a fire sale of your assets, but the truth is that there was no need to have a fire sale.

Your manager stated (below, and among other things) "... The Fund will (subject to a different resolution in relation to the Constitution being proposed and passed in general meeting) continue to be obliged to redeem units in the Fund. This will need to occur by early 2009. It is the view of the board that the net cash available per unit would be 14 cents. ..."

Your manager has stated that because the 360 day 'freeze' on redemptions would have to be lifted and that redemptions would have to be paid, and that is simply not true.

The reality is that when a fund is 'non-liquid' (declared or otherwise) as your fund was, then the non-liquid provisions of the Corporations Act takes over, and the manager is simply allowed to return money to investors as assets are sold and monies are accumulated within the fund.

I'm afraid some of you (perhaps, many of you) voted to list your fund based on a false premise, that is, that if you didn't list, then the fund had to be fire saled.

Further, the $.45c buyback could have only come from your own money anywy, so it offered nothing more than you were entitled to in the first place.

That's my opinion -- you can value it equal to how much you paid for it if you like.

Get some professional advice - you might have a case here.

..





http://www.moneymagik.com/Wellington.pdf

Page 3

The net asset backing per Unit in the Fund, assuming it remains a going concern, is 45 cents per unit plus any amount recovered from MFS.
The net asset backing per Unit in the Fund assuming all assets are sold by 31 March 2009 is 14 cents per unit plus any amount recovered from MFS (see section 6.1 for details).

Page 19

"... The outcome for the Fund if no resolutions are passed is:
The Fund will (subject to a different resolution in relation to the Constitution being proposed and passed in general meeting) continue to be obliged to redeem units in the Fund. This will need to occur by early 2009. It is the view of the board that the net cash available per unit would be 14 cents.
No buy-back will occur.
Wellington Investment Management Limited will remain the responsible entity. ..."
 
Re: Octaviar MFS Premium Income Fund PIF


I voted for JH because I feared the fund would be firesaled and that we would recover 14 cents per unit. I am immediately reminded of this article, which now that we understand more about the non-liquid provisions of the Corporations Act, makes complete sense...
http://www.smh.com.au/business/asic-must-step-in-on-behalf-of-pif-investors-20080911-4e5o.html


".....ASIC must step in on behalf of PIF investors September 12, 2008 ...

Unless the Australian Securities & Investments Commission takes a stand on behalf of the beleaguered 10,000 unitholders in the old MFS Premium Income Fund (PIF), these investors will lose the bulk of their savings.

Many PIF investors believe the only options available to them are to either accept the offer by Wellington Capital to run their fund, or watch it liquidated at 14c a unit.

They have been led to believe a "no" vote means liquidation and therefore losses. This is wrong. ASIC needs to step in. Now that PIF's parent Octaviar (the old MFS) is bound for administration and PIF has $200 million in claims to pursue, the imperative for clear and independent instructions is even greater.

The best outcome for PIF would be the orderly work-out out of the fund's external investments and loan book and a return of capital to investors.

The best way for PIF investors to achieve this would be to vote "no" to the Wellington proposal and appoint their own manager to wind-up the fund and pursue any legal claims.

Wellington chief Jenny Hutson has been on a roadshow pitching for the vote from PIF unitholders to restructure and list their fund on the NSX (National Stock Exchange - formerly Newcastle).

Investors should ask themselves if they really want to be locked into a fund listed on an illiquid market paying large fees to a manager who is yet to make enough relevant disclosures.

Wellington had secured the management rights under questionable circumstances from Octaviar in the first place. Octaviar is now run by her former associate and client Chris Scott. For his part, Scott wants to get some money out of Octaviar since he vended his businesses S8 into the old MFS for scrip. That scrip now looks worthless.

For its part, Wellington wants to permanently capture PIF by making it a listed fund. This would appear to be the best outcome for Wellington - who captures millions in fees - but is it best for PIF?

PIF unitholders have a choice, says Hutson. They can vote "yes" to approve Wellington as manager and take stock worth 45c a unit listed on the NSX. She estimates the asset backing at 45c but given the state of the listed property market PIF would trade at a large discount to 45c - especially as Wellington would likely put the hand out for more capital at some stage.

Under the Wellington proposal there is a raft of fees, both cheeky and onerous. There is even a severance fee of 2% of gross assets so PIF would have to pay $8 million to Jenny just to see her off.

Wellington to gee up a 75% "yes" vote to get control. PIF investors need to know they have other choices. In fact they can dump Wellington altogether and appoint their own RE (Responsible Entity). The RE ought to be simply a manager the 10,000-odd unitholders in PIF can trust and who can preside over an orderly sale of their assets.

As PIF is not the only train wreck unfolding on the Gold Coast - there is City Pacific and others - the sooner they unwind the fund the better prices they will get for their assets...."
 
Re: Octaviar MFS Premium Income Fund PIF

I guess the questions are these:-

1. Would you have listed the fund if you knew that the manager didn't have to wind the fund up if the fund remained unlisted?

2. Would you have listed the fund if you knew that listing the fund would not give you even a single advantage? and,

3. Would you have listed the fund if you knew that you would face tax complications with what is left of your investments in the fund as a consequence of the listing?
 
Re: Octaviar MFS Premium Income Fund PIF

Like I've stated before, the goal of the manager is to separate investors from their money - and listing a fund is the optimum way to do it.

As M.W. says, it's great for the manager, but what is best for investors?

"... For its part, Wellington wants to permanently capture PIF by making it a listed fund. This would appear to be the best outcome for Wellington - who captures millions in fees - but is it best for PIF?
..."

I think ASIC failed members of the PIF by not stepping in and making the manager clearly state there is no advantage to listing, and there is no disadvantage to not listing. ASIC should have also made the manager make the tax implications clear to all members.

I think the statement made by W.C. about winding up the fund in the event of a 'no' vote for the three proposals is misleading - and even though ASIC didn't make W.C. correct the statement (or, at least to the best of my knowledge, they didn't), that does not make the statement legitimate.

M.W. says the statement was 'wrong' - I agree.

So, what is it when a manager makes a 'wrong' statement and investors rely on that statement to their detriment?

Get the answer from a professional.

..
 
Re: Octaviar MFS Premium Income Fund PIF


Thanks for posting that article k.smith. I remained mislead by WC until I read your posting. WC led me to believe that if we didn't remove the redemption provisions in the PIF constitution, then the fund would be wound-up and the best I could expect would be a return of about 14c.
 
Re: Octaviar MFS Premium Income Fund PIF

Believe me Duped & Melifluous
some people did try everything possible at the time .





For the urgent and immediate attention of;

ASIC Chairman

Tony D’ Aloisio



Complaint regarding Wellington Capital



Wellington Investment Management responsible entity of the Premium Income fund intends to call a members meeting on the 18th September 2008 to:

1. Propose a special resolution to amend the constitution to remove the redemption clauses and replace it with the National Stock Exchange and other clauses.

2. On the basis that Wellington Investment Management does not receive in excess of 75 % of the vote required for the proposal, Wellington Investment Management will
arbitrarily place the scheme in the hands of professional liquidators which will liquidate the scheme by the 31st March 2009 at an estimated firesale valuation of 14 cents .


Please find attached supporting documentation as presented by Wellington Investment Management at the recent member forum meeting in July.

Our complaints are;

1. We consider the responsible entity is not complying with Corporations Act 2001 Clause;

“601FC Duties of responsible entity
(1) In exercising its powers and carrying out its duties, the responsible entity of a registered scheme must:
(a) act honestly; and
(b) exercise the degree of care and diligence that a reasonable person would exercise if they were in the responsible entity’s position; and
(c) act in the best interests of the members and, if there is a conflict between the members’ interests and its own interests, give priority to the members’ interests; and ………..”

We believe Wellington Investment Management is deliberately misleading unit holders of the Premium Income Fund and that they are not providing sufficient information for unit holders to make an informed decision when voting in September.

Wellington Investment Management has given unit holders the impression it is not possible for the freeze on redemptions to be extended or for the scheme to be wound up over a number of years. Questions were raised about both these issues at the Wellington Investment Management investor forums in July, and most investors that we have communicated with definitely got the impression from Jenny Huston (director of Wellington Investment Management) that it was not possible for the scheme to be wound up over a number of years or for the redemption period to be extended. Amendment of the Constitution was not offered as an option.

Members of the Premium Income Fund action group have since called Wellington Investment Management in private telephone conversations asking why they won’t give us the option of a long wind up. The response from Wellington Investment Management is that it is simply not interested in this option.

We believe it is the unit holder’s right to be informed of the option of an orderly windup over a number of years and that it is the responsibility of the RE to inform us this is possible, providing estimated unit prices for this scenario. The fact the RE is not personally interested in this option should not influence its behaviour when supposedly keeping unit holders fully informed, and when asking them to make decisions about the fund’s future.

We would also like to your draw attention to the fact that 95% of investors in the fund are retired pensioners over the age of 65 ,many remain entirely unaware that any other alternative legally exists for them to access their investment money in a reasonable timeframe at fair asset values

.


The following screenshot is from Wellington Investment Management’s ‘Investor Update – Q&A – July 2008.pdf.’ document. We consider this to be misleading in that it gives the average reader the impression the redemption period cannot be extended, and also that a long wind up of the scheme is not possible.







We believe that Wellington Capital tactics to gain control of the PIF is morally and ethically indefensible .

Please, we have no one else to turn to in the present situation ,we are therefore requesting ASIC to urgently intercede to uphold the fundamental rights of investors for transparency and honesty in this matter , before unit holders vote on September 16.

Please help us , we have only 22 days to stop this injustice.

Yours Sincerely,
 
Re: Octaviar MFS Premium Income Fund PIF

Jadel,

Now that I understand the provisions of the Corporations Act for non-liquid funds I feel that we have been mis-informed....and I do not understand why ASIC, who seemed so involved in WC presentation of the disclosures to unitholders within the Explanatory memorandum for the meeting regarding future 'payments", did not make WC tell us that....

1. The Corporations Act provides us with our rights to wind up our assets in the fund in an orderly fashion,

2. The tax implications of receiving payments that would in effect just be the return of our own capital that we had originally invested.

It seems grossly unfair, imo, that most unitholders were not, and/or are still not aware of these facts .
 
Re: Octaviar MFS Premium Income Fund PIF


Hi Jadel,

I can see from your posting that you were on the ball.

The problem (as I see it) is that ASIC doesn't take investors seriously.

I know that at the time of the proposal, if I was an investor in the PIF, then I would have felt it was 'wind up' or 'list' - at that time I knew nothing about the non-liquid provisions of the Corporations Act.

While you didn't spell out the provisions, I really don't think it would have mattered if you did - ASIC would still ignore you simply because you're an investor and you're not supposed to know the rights and wrongs of things.

I think that ASIC was intenesely focusing on the 'distributions' and would have been blind-sided to any other issue. Even to this day, I'm stunned that ASIC even let W.C. speak about 'distributions' without mentioning any money paid as such would be no more than investors own money (since there was no income into the fund, and certainly no profit to pay proper distributions from).

The beat goes on with the PFMF too - bt gets away with mentioning 'distributions' as does at least one of bt's supporters.

I was also stunned why ASIC allowed W.C. to set out the formula D = I + C (where D = distribution amount, I = Income (less allocations to run the fund), and C = capital). The very idea of one's investment capital being paid as taxable income is repugnant to common sense.

I really believe that both W.C. and ASIC have failed investors in the PIF very badly. The listing was a very big mistake for investors in the PIF.

I would think that PIF members might have a good case to cause W.C. to de-list the fund at its sole expense - only my opinion of course.

..

..
 
Re: Octaviar MFS Premium Income Fund PIF

Slightly off topic. The so-called helpline is today no more than a blatant propaganda tool for WC to “sell” their great abilities. The trouble is that investors who are not readers of this thread might believe them.
 
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