Wellington Capital PIF/Octaviar (MFS) PIF

[Javier]

Re: Octaviar MFS Premium Income Fund PIF

Dora,
I have left things in the hands of the lawyer. JH is refusing to hand over the investor register unless I hand over $14000! I sent her a reply email stating that this is 1 not a prescibed charge and 2 insulting considering how we are getting screwed. I am flat out at work at the moment plus another personal issue has come up. So if you or anyone else can take over at this stage it would prob be better, the lawyer that I spoke to is of the opinion of wait and see what JH has to say. If you believe another angle / legal advise is appropriate, go for it. Noone is really in charge here I guess.

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

Thanks for the update Javier!

Some Brisbane members are meeting today; I’ve asked if they will add this to their agenda. Could other members please provide feedback on whether you want a formal committee established and suggestions on how to proceed?


BTW: The prescribed amount = a reasonable amount that does not exceed the marginal cost to the company of providing a copy. I find that anyone quoting $14,000 is showing complete incompetence in understanding the law or that the person can’t be trusted.

 

[Rocky1]

Re: Octaviar MFS Premium Income Fund PIF

Dear All

It would appear that most people on this forum are prepared to listen to what JH has to say, but at the same time are a little nervous as to her intentions and unhappy with the way things have unfolded to date.

I personally believe she has got off on completely the wrong foot by communicating through the media or not communicating at all. To add to this I didn't even receive my letter RE: the forums and wonder how many other people did not receive the letter also. Maybe they drew our names out of a hat!!!!

From listening to everyones thoughts over the past couple of weeks it appears that investors are probably going to fall into four categories
1. Sell no matter what at a capital loss once the opportunity arises
2. Stay in the fund for the long haul and see if things improve
3. Push to have the RE replaced
4. Push to have the fund wound up via a process that maximises returns

Based on this I believe we should be looking at what is involved in 3 and 4 now just in case we are not happy with the outcome of the forums. I understand what Tuart is saying (we need to structure the AG) but I think we are at a point where this could happen fairly quickly, my point is we need to inform ourselves of the process for these two options (3 and 4 above).

Like Javier I have little time so if someone has the time (DOORA????) then I would suggest we push on, we have nothing to loose.

My concern is that if we don't push on then we are buying JH more time to make decisions without consulting us.

She may be good for the fund, but I believe there are too many negatives surrounding the whole deal (e.g association with Chris Scott and the fact other entities didn't even get a foot in the door)

 

[Javier]

Re: Octaviar MFS Premium Income Fund PIF

I AM GUTTED!!!!!!!

Dear Investor
PREMIT]M INCOME FTIND ARSN O9O 687 577
As foreshadowed in our last investor update, the board of Wellington Investment Management Limited is now able to
advise the revised unit value of the Premium Income Fund.
The board has determined the value of the Premium Income Fund on three different models:
Option 1: Value of unit assuming going concern and full recovery of $147.5 million from MFS
After assessment of the investments of the Premium Income Fund, the board of Wellington Investment Management
Limited is of the view that the units have a value of 65 cents per unit assuming the Fund remains a going concern and
there is full recovery of $147.5 million from MFS under the legal action commenced on 24 June 2008.
Option 2: Value of unit assuming going concern with no recovery from MFS
After assessment of the investments of the Premium Income Fund, the board of Wellington Investment Management
Limited is of the view that the units have a value of 45 cents per unit assuming the Fund remains a going concern and
there is no recovery from MFS under the legal action commenced on 24 June 2008.
Option 3: Value of unit on liquidation of the Fund
An orderly realisation of assets by a liquidator of the Premium Income Fund would in the opinion of the board of
Wellington Investment Management Limited see investors receive approximately 14 cents per unit.
It is the opinion of the board of Wellington Investment Management Limited that this is not the preferred option for
unitholders.
ttl
| 6s cents | 45 cents I 14 cents I
The future
The board of Wellington Investment Management Limited is committed to the implementation of a value recovery
strategy and restoring unit value in the Premium Income Fund and is taking steps to ensure that this is achieved. There
have already been substantial changes to the management of the Fund. Wellington's team of experienced and successful
professionals are now responsible for the Premium Income Fund.
I look forward to discussing the way forward with you at the investor forums which will be held throughout Australia
commencing 7 July 2008.
Kind regards
Jenny Hutson
Chairperson
Wellington Investment Management Limited
ACN 101 634146 AFSL246ss3
Level 22 307 Queen Street Brisbane Qld 4000 CPO Box 694 Brisbane Qld 4001
T 1300 854 BB5 F 1300 854 893 E enquiries@newpif.com.au W www.newpif.com.au

 

[Rocky1]

Re: Octaviar MFS Premium Income Fund PIF

Javier

Where did this info come from

Again - broad figures, no detail.

My first impression is what a load of crap. I went through the Fincorp debacle which I perceive as being far worse than this and to date we have recovered 57 Cents in the $.

This fully reiterates my previous post - we need to get active!!!!!!!

 

[Javier]

Re: Octaviar MFS Premium Income Fund PIF

Was sent to advisors today, we should all get it by end of week.

 

[Rocky1]

Re: Octaviar MFS Premium Income Fund PIF

Javier

To be able to come up with these cents in the $ values they must have crunched some pretty accurate numbers.

As Investors can we request full details of our investment, because I am skeptical about receiving this information at the forums

 

[Tuart]

Re: Octaviar MFS Premium Income Fund PIF

I think waiting for the meetings before formalising your structure is wrong. There is a bit of work involved in puting together the rules and regulations of the body which would also be reflected in the power of attorney that was proposed to be incorporated in a membership application form.

It would have been good to have your membership pack ready for the forums but I think time has run out.

The benefits of an incorporated body is that it creates a committee who can represent your interests easily and is made up of members and is run for the members by the members.

For many people they do not have the time or understanding to help but joining the incorporated body is a simple step and they know they are helping.

As to the numbers just posted by Javier this is a disgrace and the following must be released:
1) exact nature of the $147million in loans (who when what etc)
2) what losses were experienced in clearing RBOS and is RBOS cupable in the creation of this loss.
3) In the value that is left is this inclusive of assets that have a reduced listed value and therefore potentially can have value restored over time.

There must be a time line of events and a full disclosure of assets left.

For example my understanding of the Ray Group to which funds were loaned as part of the 147 million is that they are a substantial group so how can the loan have no value of recovery.

The problem I have with the forthcoming forums is that it will be a sell job by WC and its team of "experienced profesionals "(how many are inherited from the existing manager they acquired).

What benchmark are you going to measure them against. If at the forum another RE group could also stand up and make a presentation about resources, experience and what they can provide investors then PIF holders can compare WC to others.

WC would never allow this as they are minnows compared to other groups who would take on this role.

 

[pixierich]

Re: Octaviar MFS Premium Income Fund PIF

This is bull****! We were told in January that the fund was worth 770 million.
Even assuming that this was inaccurate, and that the assets have lost value in the meantime, how can the "orderly winding up" scenario be down by over 600 million, which is what 14cents suggests.

I believe that this is a ploy by WC to scare everyone into hanging in while they do what they like with our money. They assume that these appalling figures will have been digested by the time the Forums come up, and that investors will be even more susceptible to their suggestions.

As the song says, "We're not going to take it, NO, we ain't going to take it!!"

 

[PIFholder]

Re: Octaviar MFS Premium Income Fund PIF

Tuart,

with all due respect, I thought this forum was about everyone being able to have an opinion so that we could get all the information out in the open. Your response is aggressive.

All of us haven't had distributions, can't redeem etc and are suffering as a result and all I'm saying is that maybe we have to put some faith in someone that is actually willing to roll up their sleeves and have a go because the previously board absolutely stuffed up the management our PIF, and after looking at Javier's post lost our money as well.

We'll never know really if it is a related party transaction .... you'd think that the liquidators of MFS would have had a pretty big say in who got the fund. It's pretty clear from following OCV in the market that the directors can't make any decisions themselves ... ASIC would have been all over them

I've spoken with JH who has said the board will answer all questions and I know she's given that assurance to other investors I know who have spoken to her. It's going to be pretty hard for her to deflect questions in a capacity crowd and as investors we just need to be forceful in getting the answers.

I for one am going to give them a go because 14 cents in liquidation is a disaster.

Dear "PIFholder"

The forthcoming forums is an opportunity for WC to sell itself and JH in particular as the person for the job. This is what the forums will be with all the hard questions deflected in finger pointing at the old board.

The major stumbling block is trust or lack of it.

WC was Chris Scotts advisor and then must have continued that role with OCV once they got CS on the board. To sell the management rights to your own advisor without even entering discussions with other parties has had huge ramifications for your fund.

I know of at least one other group who had lodged a formal expression of interest and OCV would not return phone calls or correspondence with this consortium (including JH who was provided a copy of the proposal before Chris Scott was even on board).

It is as Crikey suggests that no one got close to doing Due Dilegence as both the old and new board would not let any other party in the door.

Consider for one moment if a party had bought the management rights who had the resources to replace the RBOS facility. THis would have removed the number one threat to your fund. Deals like GPM would not be required as the fund would have had the luxury of time to hold this investment until the market returns to some form of normality which over time will occur. This was an income earning investment.

The proposal I am aware of may not of being the best offer on the table as I am sure other groups had also expressed an interest but to date I believe it was better than the WC offer as the consortium had the capacity to bring in new funding which WC has not put in one cent of their own money.

The sale process should have being transparent and not conducted in the manner it was.

There continues to be alternatives for the fund out there in terms of an ongoing management and if you formalise your group into a structure with a committee these groups I am sure would love to sit down and talk with your committee about alternatives. Sadly as time moves on they can help less as deals like GPM occur which makes the position worse not better and they have less assets to work with.

The bottom line is that the existing RE has to go as it should be the number company sued in relation to the 147 million in money that has disappeared. It has its own board and compliance committee who signed off on tranactions. No one is forced to do anything unless they had a gun at their head. If OCV threatened to sack these people if they did not undertake the transactions they should have ran to ASIC at that point.

I will also leave you with a final thought.

With this $147 million claim plus the $50 million the total claim against OCV is $197 million. Between this claim and the NZ claim in total dollar terms any scheme of arrangements put up for OCV (x cents in the dollar as full and final settlement) will be either agreed or voted on by your RE and between the RE and OPI Pacific Finance ?? they control the fate of OCV. (A scheme of arrangement is voted for by creditors and these two by total dollar value now out weight Challenger and Qld trustee)

Do you trust the until recent advisor of Chris Scott to do the best deal for the fund and not in anyway compromise the outcome to benefit OCV. IMO it would be better to have a fully indepenent party protecting your interests and conducting these negotiations with CS and potentially voting on any formal scheme.

A question to ask WC on this is will they put any deal in relation to OCV either through a formal administration or negotiation to PIF investors first or will they just cut a deal and tell members after.

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

65 cents / 45 cents / 14 cents

Don't forget to add the lost distributions to these numbers. I.e. lost earnings, the earnings our investments could have made if they were sitting in a bank term deposit these last 6 months. At 7% pa thats .583 cents per month per $1 unit. So in the last 6 months I have already LOST 3.5 cents per $1 unit. I.e. $350 for each $10K invested in the PIF.

For all of us that now have debts and are PAYING interest on those debts you can MORE THAN DOUBLE that amount when you calculate the financial damage MFS/Octaviar have caused.

Never forget that OUR lost distributions have been helping pay the RBOS debt for these last SIX MONTHS. To the tune of $28MILLION (755M units at and average of 7.5%)

I know I keep going on about it but the political angle in this is not to be ignored. The buck in any business always stops with the Chairman of the Board of Directors. Which of course for MFS Ltd (who owned 100% of our RE) was Mr Andrew Peacock. The man that the good people of the opposition Liberal Party chose to be their leader. I would not be surprised if likes of ASIC have been told by their political peers to avoid helping us PIF investors if possible. The greater our fall the greater the political value.

'Former Opposition Leader Rules Over a Billion + Dollars of Investor Losses': that's a 6 inch gun for the battle against the coalition's image as the superior financial manager. (Does a little bit of damage every time it is fired. Just like the Coalition never ceased reminding us about 18% interest rates under Hawke/Keating.)

 

[PIFholder]

Re: Octaviar MFS Premium Income Fund PIF

Hear Hear Duped!

I agree that the political angle can't be ignored. Andrew Peacock was in charge of the company that owned the RE - the same RE that has lost our money.

The buck has to stop with MFS, Andrew Peacock and Michael King.

65 cents / 45 cents / 14 cents

Don't forget to add the lost distributions to these numbers. I.e. lost earnings, the earnings our investments could have made if they were sitting in a bank term deposit these last 6 months. At 7% pa thats .583 cents per month per $1 unit. So in the last 6 months I have already LOST 3.5 cents per $1 unit. I.e. $350 for each $10K invested in the PIF.

For all of us that now have debts and are PAYING interest on those debts you can MORE THAN DOUBLE that amount when you calculate the financial damage MFS/Octaviar have caused.

Never forget that OUR lost distributions have been helping pay the RBOS debt for these last SIX MONTHS. To the tune of $28MILLION (755M units at and average of 7.5%)

I know I keep going on about it but the political angle in this is not to be ignored. The buck in any business always stops with the Chairman of the Board of Directors. Which of course for MFS Ltd (who owned 100% of our RE) was Mr Andrew Peacock. The man that the good people of the opposition Liberal Party chose to be their leader. I would not be surprised if likes of ASIC have been told by their political peers to avoid helping us PIF investors if possible. The greater our fall the greater the political value.

'Former Opposition Leader Rules Over a Billion + Dollars of Investor Losses': that's a 6 inch gun for the battle against the coalition's image as the superior financial manager. (Does a little bit of damage every time it is fired. Just like the Coalition never ceased reminding us about 18% interest rates under Hawke/Keating.)

 

[Tuart]

Re: Octaviar MFS Premium Income Fund PIF

Dear PIFHolder

I am sorry if I came across as agressive to you.

The point I was trying to make is that what benchmark are you going to use to determine if WC are the right group for the job.

There were over 25 expressions of interest lodged for the PIF management rights (direct quote Louise Edwards head of merger and acqusitions at OCV)

On what basis was it determined that WC offer was in the best interests of investors. They did not have the capacity (funds) to remove RBOS which stops the requirement for having to discount assets to sell them.

WC were advisors to CS and I find it hard to believe that once WC got CS on the board of OCV they played no further part. So potentially you have an advisor turned acquirer of assets. (IMO not good governance and makes new board as bad as old)

The other point I was making is that Korda Mentha (unofficial administrators/liquidators) to OCV may have formed the view that WC was the best option for OCV shareholders. But was this what was best for PIF investors or were there better alternatives out there.

WC have been handed a signifcant asset for effectively no consideration and will earn substantial fees over time and if they retain some or all of the funds have created millions of dollars of value for themselves out of a very questionable transaction.

PIF investors should be the only ones to benefit from any value the management rights bring until a party is prepared to contribute real value to fixing the problems.

 

[Mary Lynch]

Re: Octaviar MFS Premium Income Fund PIF

Dora,
WAY back, in answer to your plea.....YES we definitely need some structure to this group....in individual states and on a national level.

We can't have more than one legal practice to pay, and we will have to make a decision around that very quickly after the forum if we are pursuing that route.
At least we should have a lot more members to contribute then....but also we will have a lot more opinions!!

We need someone to put together agenda to be thoroughly discussed and voted upon at our meetings post forum. We will all be pretty well informed about what needs to be worked over after the first meeting in Brisbane.

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

Given the news we have received today, it is worth while going back to what was said at the beginning of this year

"MFS responds to Stephen Mayne: ... Guy Hutchings, CEO, MFSIM, MFS Limited, writes:....

* Only 16% of the funds assets are invested in MFS related entities and there are no funds invested in MFS Limited or its wholly owned subsidiaries. No assets in the Premium Income Fund are impaired in terms of generating income or recovery of principal and the fund continues to pay its distributions at the target rates.

* The deferral of redemptions by the Premium Income Fund is not caused by a deterioration in the quality of its assets. Distributions will continue to be paid from income generated by the fund. MFSIM has waived its management fee for the duration of the deferral".

Crikey 31/1/08

Absolute BS!

And this piece in Feb on Crikey: ...

"All this cash will go to repay short term debt, but the problems go a lot deeper because the MFS board basically used the suspended $770 million MFS Premium Income Fund as a private bank to fund development projects all over the place, including many with links to the broader MFS empire.

Word is starting to circulate that MFS was lending the funds and then recovering some of them in advanced profit sharing fees before the profits had actually been made:.

Crikey 4/2/08

And those wonderful folks who came in to help us:...

"When former S8 founder turned MFS shareholder Chris Scott first started agitating for a spot on the board, MFS chairman Andrew Peacock came out swinging, telling The AFR three weeks ago: “For reasons well known to Mr Scott, I have absolutely no respect for him whatsoever.”

Adam Schwab pointed to the possible reason for this position in Crikey on March 3 when he wrote:

Peacock’s feelings towards Scott may have something to do with Scott’s scheduled appearance in the Southport Magistrates Court in August in relation to charges relating to commissions deducted at S8 apartments. If found guilty, Stella could be liable to pay $44 million in fines while Scott could face a two-year jail term.

What is it about these Gold Coast companies!"

Crikey 19/3/08

 

[Jadel]

Re: Octaviar MFS Premium Income Fund PIF

I can inform Action Group Members with absolute certainty that all you need to do to aquire the registry for the fund is have 100 members or 5% of the total asset value of the fund and that you intend to legally call an EGM

The only cost involved is the photocopying which you can do yourself .

If Hutson continues with these obvious delaying tactics contact ASIC immediately .

 

[Rocky1]

Re: Octaviar MFS Premium Income Fund PIF

Jadel

If this is true, lets not waste time. Lets formalise a list of AG members to prove we have the 100 (breaker would need to send a generic email to all members to confirm they are happy to be on the formalise list) and lets get a volunteer to get the registrar.

Clearly she is using a number of tactics to try and stall our progress and we are playing right into her hands by buying her time. ENOUGH IS ENOUGH.

I'm not saying she won't do a good job or we need to overturn her, but this is our money and we need to be smart, organised and prepared. As someone said earlier in this thread even IF WC do a good job, having a structured AG will keep WC on it's toes.

Is there anyone out there who can make this happen!!!!!!!!!!

 

[Mutchy]

Re: Octaviar MFS Premium Income Fund PIF

Dora,
WAY back, in answer to your plea.....YES we definitely need some structure to this group....in individual states and on a national level.

We can't have more than one legal practice to pay, and we will have to make a decision around that very quickly after the forum if we are pursuing that route.

Yes we do need some some formal entity as previously discussed. I think we need to be seriously addressing the option of replacing the RE provided there is a way that this can be done whilst still retaining the ability to recover the $50 Million or part thereof from OCV which would lapse under the loan agreement if Octaviar Investment Management Limited was replaced outright. (WC own the management rights to OIML so OMIL are the RE licence holder) Potential Responsible Entities will be more likely to talk to a formally constituted group than a loosely aligned action group.

Here is my understanding of our current situation from the last few days:

Summary of PIF Posts from 1st July

There are three options open to PIF Action Group members:
Replace the RE
Remove the RE or
Force the RE to wind up the scheme

It appears we do not have any rights when it comes to telling the RE want to do (like listing on the NSX) except to tell them to wind up the scheme.

WC will be listing PIF on the NSX and there is nothing we can do about it.
The value of our PIF units will not change in line with our NSX units, but with the fund realizing(selling) the assests over time. If we sell our NSX units we will get our cash out, but probably at a capital loss. In the meantime, %redemptions and distributions are will be available again in a few months.

Listing on the NSX doesn’t just disadvantage the investors who need to sell immediately – it also disadvantages the rest of the unit holders. Once we have fellow investors in the fund that only paid say 20c for their units we will have a hard time convincing those investors to agree to a special resolution if ever the need were to arise. Also, the RE could suggest a workout where we only get 40c in the dollar back and those new investors who bought on the NSX would agree as they would double their money!

There is a suspicious relationship between Jenny Hutson and Chris Scott with some apparently just out of arms reach transactions having taken place and probably in process. There are past relationships and loans which are also suspicious and none of which have benefited PIF unit holders. There may be reason to sue the directors for their negligence in relation to clauses of the Corporations Act.

JH was Chris Scotts advisor and appears to have continued that role with OCV once CS was appointed to the board. OCV sold the management rights of PIF to the boards own advisor without entering discussions with other parties and without due diligence having been performed.

Wellington Capital are suing Octavia for a related party transaction for $100 Million. Can WC be suing Octavia for related party transactions and simultaneously be involved in a related party transaction of your own? Probably not.

The old RE should be sued in relation to the 147 million in money that has disappeared. It had its own board and compliance committee who signed off on transactions. Does WC. having bought the management rights also now hold responsibility for the $147 Million transactions? - Probably not.

With this $147 million claim plus the $50 million the total claim against OCV is $197 million. Between this claim and the NZ claim in total dollar terms any scheme of arrangements put up for OCV (x cents in the dollar as full and final settlement) will be either agreed or voted on by your RE and between the RE of OPI Pacific Finance. They control the fate of OCV. (A scheme of arrangement is voted for by creditors and these two by total dollar value now outweigh Challenger and Qld Trustee combined)

On 2nd July WC issued a statement to Advisors outlining three options with three estimated values of unit values.
Going Concern full recovery $147 Million - 65 cents
Going Concern No Recovery of $147 Million - 45 cents
Liquidation - 14 cents

There were over 25 expressions of interest lodged for the PIF management rights. Korda Mentha, unofficial administrators/liquidators to OCV may have formed the view that the sale of management rights of the PIF RE to WC was the best option for OCV shareholders, not PIF unitholders.

WC have been handed a significant asset for effectively no consideration. WC will earn substantial fees over time out of a questionable transaction.

Please feel free to clarify any point which is in error or answer any questions raised.

Mutchy

 

[BootsnAll]

Re: Octaviar MFS Premium Income Fund PIF

PIF Action Group should become a formally incorporated body, engage legal people and above all get a forensic accountant to delve through the whole sorry mess to ascertain what the true financial situation is. If we all contribute say, $100 we would have a decent fighting fund.
At the moment we are getting the mushroom treatment; being kept in the dark and fed bull***t.

We need people with expertise to step forward & get the ball rolling. Only wish I qualified!

 

[Jadel]

Re: Octaviar MFS Premium Income Fund PIF

Rocky

We had a very pleasant informal meeting with Brisbane AG group members today regarding our strategy and i believe Dora is working on the problem

Suggest you contact through the site he has specifically set up for these problems