Wellington Capital PIF/Octaviar (MFS) PIF

Hi All,

Can someone approach Carneys and ask them if, after all these investigations, could they have a public meeting with us , and for them to update us with all relevant facts re class action. The last meeting we had with them was about 2 years ago, so it may be time for us to have a face to face meeting with them.

It would be a great exercise for us long suffering PIF investors.

Michael

In the Australian financial section today,very interesting article, in relation to court proceedings in the Supreme Court. Makes you quite ill reading about the mis-management of OUR money. Just hope this gives more ammunition to IMF and Carneys in our upcoming class action.

Michael

Fund used to cover MFS shortfall, NSW Supreme Court told
Bridget Carter From: The Australian August 17, 2010 12:00AM

THE failed MFS Group used money from its Premium Income Fund to plug a hole in a capital raising shortfall, a court heard yesterday.

This was after directors of MFS, now known as Octaviar, promised to cover any shortfall in the $175 million equity raising, the NSW Supreme Court was told.

The raising was held to fund ski-field businesses and aquarium acquisitions by MFS Living and Leisure off parent company MFS Group during 2006.

But the transaction, which involved the MFS PIF acquiring nearly $8m worth of shares in the MFS Living and Leisure Fund, happened "urgently", according to documents produced in the NSW Supreme Court yesterday and before any compliance committee approval was sought.

The units purchased by PIF were held by Management Finance, which was PIF's trustee and of which the group's chief financial officer, David Anderson was the sole director in 2006. Former MFS executive director and deputy chief executive officer Craig White was on the stand yesterday as part of a public examination conducted by liquidator Bentleys Corporate Recovery, to find out when the company became insolvent.

End of sidebar. Return to start of sidebar.
MFS listed in 2005 and collapsed in January 2008, owing creditors $2.5 billion.

Under questioning, Mr White was unable to recall or did not know many details about transactions and emails in 2006, including why the PIF, which MFS managed, would buy the units.

An email was sent by MFS co-founder and former chief executive Michael King to Mr White saying: "We need to remit this from PIF to Shaws in the morning", referring to shortfall that needed to be paid to the broker Shaw Stockbroking, which undertook the raising for the MFS Living and Leisure fund.

An email was then sent by Mr White to former director of MFS Investment Management, Steve Kyling, saying: "Steve, can you please do urgently as immediate/real time transfer?"

Mr White was asked if he was aware that Management Finance had set up a margin loan facility using as security units in the PIF. Mr White agreed that "on the face of it" this would breach PIF's compliance plan, which required transactions to be in the best interest of security holders.

When asked if PIF unitholders would receive a benefit from this, Mr White said "no". MFS also needed $100m to honour a promise to shareholders to provide a 20c per share dividend by October 2007, when the company had cashflow challenges.

MFS sold loans to PIF to secure cash, and Mr White said "on the face of it", it appeared proper process had not been followed.

The examination continues today.
http://www.theaustralian.com.au/bus...tfall-court-told/story-e6frg8zx-1225906069116

atlas1950 said:

In the Australian financial section today,very interesting article, in relation to court proceedings in the Supreme Court. Makes you quite ill reading about the mis-management of OUR money. Just hope this gives more ammunition to IMF and Carneys in our upcoming class action.

Michael

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Wow. Great stuff. http://www.theaustralian.com.au/bus...tfall-court-told/story-e6frg8zx-1225906069116

Seems that White is dropping Anderson and Kyling in it.

Kyling resigned from the MFSIM board on 17 September 2007. Why then?

The Australian is trying some more serious reporting on MFS today. Meanwhile, for some light news, over at the Gold Coast Bulletin:

http://www.goldcoast.com.au/article/2010/08/17/247785_gold-coast-business.html

The GC Bully really seems to just be a local bulletin.

........... and on the same page, this link:-

http://www.goldcoast.com.au/article/2010/08/17/247725_gold-coast-business.html

quote ""I think this a big step in the right direction," said Ms Hutson who conceded the profit had taken her by surprise.

I think our so called fund should act as a case study into exactly all that is flawed with the the Corporations Act and why ASIC is treated with utter contempt by a great many in the business community . It is patently obvious that these, so called Corporate ‘LAWS?’ are’ regarded as no more than a Brownies Girl Guides code or a Mission Statement

The extent and depth of the abuse and exploitation of the PIF over many years without the slightest censure by so called Compliance Committees and Auditors ,demonstrates unequivocally that these people have absolutely no fear of the Corporations Act .And why should they? a few 9 to 5 bureaucrats acting as buffer and shield for a small ,second rate legal team .

Look what happened when John Elliott ( former chairman of the liberal party) was taken to court many years ago . He decimated a buisness and ruined tens of thousands many tears ago in similar circumstances. Nevertheless a team of expensive high flying lawyers got him off . Yesterday he was giving commentary on the election without a care in the world . Just recently, Jody Rich , One Tel , got off with the presiding Judge singing his praises as an exemplary human being , and damning ASIC for incompetence.

Duped ,if we were in China this lot would be in front of a firing squad in short order , In Iran they would probabably be stoned to death . Sometimes you just gotta wonder.

I have never understood the Living and Leisure deal that Wellington did with Artic Capital.

Even after the collapse of MFS more funds were flowing I believe to LLA from PIF but then a deal was done to sell the debt and shares at a discount and pay a fee to Artic for being so kind as to buy the PIF debt out at a discount.

If Wellington was such a great merchant bank why did they not take control of LLA instead of Artic as these were cash generating assets and PIF was the major creditor behind only the bank.

Wouldnt these be the type of assets to be retained and value be rebuilt for the benefit of unitholders.

I also question the selling off of the shares in what is now GEO who I think time will tell like LLA will go on and kick quite a few goals once unshackled from the taint of MFS.

Wellington will point the finger at the share prices as say that they were vindicated but I think these companies are undervalued and still suffer from where they came from.

It was all a rush to pay of RBOS but did anyone ever stop and ask the question of how much did RBOS know when the line of credit was taken and the monies drawndown of where it was going ?

Did they turn a blind eye also to what was going on.

gardie said:

I have never understood the Living and Leisure deal that Wellington did with Artic Capital.

Even after the collapse of MFS more funds were flowing I believe to LLA from PIF but then a deal was done to sell the debt and shares at a discount and pay a fee to Artic for being so kind as to buy the PIF debt out at a discount.

If Wellington was such a great merchant bank why did they not take control of LLA instead of Artic as these were cash generating assets and PIF was the major creditor behind only the bank.

Wouldnt these be the type of assets to be retained and value be rebuilt for the benefit of unitholders.

I also question the selling off of the shares in what is now GEO who I think time will tell like LLA will go on and kick quite a few goals once unshackled from the taint of MFS.

Wellington will point the finger at the share prices as say that they were vindicated but I think these companies are undervalued and still suffer from where they came from.

It was all a rush to pay of RBOS but did anyone ever stop and ask the question of how much did RBOS know when the line of credit was taken and the monies drawndown of where it was going ?

Did they turn a blind eye also to what was going on.

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Well Gardie its not exactly a well kept secret that approx 10400 investors would seriously have been questioning for quite some time the following as quoted from http://www.wellcap.com.au/profile.html 'Wellington Capital is differentiated by its innovative style and access to capital, which enables it to be faster and more creative in designing suitable solutions. Wellington Capital's experienced team focuses exclusively on finance and property based transactions, and offers clients proven expertise in de-risking opportunities and innovatively structuring transactions.'

'Wellington Capital is active in a broad and varied range of transactions ranging in size and across all property sectors. These property based projects are diverse and range from fund raisings associated with the acquisition and further development of CBD offices, residential towers, commercial and industrial facilities, and large scale subdivisions.'

Glaring ommissions from the wellcap website include no mention of the negotiating expertise by the experienced team to secure finance for the Wellington Capitals Premium Income Fund at a staggering 25%!!! A legendary status such as that when interest rates were at an all time low should go down in history me thinks!!

I hope potential investors in G8 education, trading as GEM are keeping a close eye on management because statements from the chairperson, Jenny Hutson, such as 'operationally our team is delivering for all stakeholders' make a totally mockery of the Premium Income Fund investors who were promised far more by the same person over two years ago!

Heres a question for you Gardie, are investors who were encouraged to invest in the PIF and had their money accepted or rolled over after OCV became insolvent, elligible to become creditors of OCV separate from the PIF being a creditor for missapropriated funds?

Seamisty

Jadel said:

...

Duped ,if we were in China this lot would be in front of a firing squad in short order , In Iran they would probabably be stoned to death . Sometimes you just gotta wonder.

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Or even the US for that matter. Compared to the heavy hitters the US system has sent to jail, our system looks more like a uni moot. See Stephen's criticism of and list of ASIC's incarcerations at maynereport.com.au. ASIC is more facade than wall. Or maybe just transitory, like the removable barriers put in place each year for the F1 or the Indi Cars.

But then again, as I'm learning from my current readings, Australia seems to have always been a bit like that. More like a civilised mob rule. Democracy Lite. Or a freeware version of Democracy. If you want the full version with all its extra features you have to pay. Tempting but will it crash or slow down my other software? Or will it even work with my version of the OS - Free Market 2.0. Or my security suite - State & Federal Judiciary. Or just make the whole lot run slow. All questions for the next republic debate.

So how do we make this Commonwealth's system work for us?

The idiosyncratic American trends forecaster, Gerald Celente, has a very good way of describing the American fraudsters and swindlers of the moment. They are, he says, impervious to the damage they do to orhers because they are addicts - addicts to money. It seems that this addiction to wealth is so strong that nothing can stand in their way. The innocent are trampled over as these expensively dressed hyenas always protect one another. Appropriately, Celente labels these inter-related bunch of miscreants as “money junkies.”

While in the Carney's office today, an associate gave me a pointer to our progress being jump-started in 2 weeks time.
The sealed orders were, it seems, in relation to some minor amendments which are being ironed out right now.
So in some 2 weeks we can expect some sort of "moving forward". Keep faith.
Regards,

simgrund said:

While in the Carney's office today, an associate gave me a pointer to our progress being jump-started in 2 weeks time.
The sealed orders were, it seems, in relation to some minor amendments which are being ironed out right now.
So in some 2 weeks we can expect some sort of "moving forward". Keep faith.
Regards,

Click to expand...

Thanks for that simgrund. We are all patiently (or impatiently) waiting for some legal action of some description by someone remotely competant to demonstrate that mismanagement and misappropriation of other peoples money is totally unacceptable.

Senator Nick Sherry (Minister for Superannuation and Corporate Law) stated that the PIF was a risk based investment and the Govt would not extend guarantees to protect investors against losses in these type of funds as it would be seen as rewarding them for taking risks!! He also said that 'protecting investors against losses on such investments does not appaer to be an appropriate role for govt as it is likely to significantly distort the allocation of risk and return which is essential to the proper functioning of investment markets'!!

Wayne Swan (Deputy Prime Minister and Treasurer of the Australian Labor
Party) stated that PIF investors were 'greedy' for going after higher returns. And as for ASIC, what are they waiting for? The election? The PTQ and Bentleys to do their work for them?
Seamisty

By off forum popular demand I am posting a recent picture of the 'relocated church' to Andelaine from Binjour in Qld to David Burkes enneagram retreat http://www.enneagram.com.au/pages/andelaine.htm#re an attatchment. The fees associated with these 'not for profit' organisations and their informative 'once in a lifetime workshop opportunity' would be interesting to certain people I am sure.
The ph contact no for the workshop was 07 3218 7304http://www.naturaltherapypages.com.au/therapist/28284
That would be the same Jane Buxton who is employed by both WC and David Burkes Ingenius Communications Pty ...Sorry, Just checked and the picture is not coming through!! Shame, I am sure it would have been a great place to hold a 'not for profit EGM'!!

Seamisty

Court told that MFS documents were 'backdated'
Teresa Ooi From: The Australian August 18, 2010 12:00AM

http://www.theaustralian.com.au/bus...s-were-backdated/story-e6frg8zx-1225906567969

A FORMER deputy chief executive of the failed MFS Group signed documents that were later backdated by a year, a court heard yesterday.

Craig White told the NSW Supreme Court he had signed documents in 2008 that were later backdated to 2007, and that minutes of a MFS management meeting held in 2008 were dated November 21, 2007.

Asked by Adam Bell SC on behalf of the liquidator, Bentleys Corporate Recovery, whether the minutes of a MFS management committee meeting held on November 21, 2007 were an accurate record, Mr Craig said: "I think the minutes were prepared sometime in 2008."

When Mr Bell questioned him whether it was "misleading" for the date to be backdated, Mr Craig did not comment.

Mr Craig took the stand yesterday as part of a public examination by the liquidator to ascertain when MFS, now known as Octaviar, became insolvent. MFS listed in 2005 and collapsed in September 2008, owing creditors $2.5 billion.

Mr Craig said he did not recall receiving a statement of accounts every month.

He denied the cash situation at MFS was very tight by mid-November 2007, despite receiving emails from chief financial officer David Anderson saying the company was facing "serious cashflow problems".

"I was aware there were cashflow challenges, but I did not think they were unmanageable," Mr Craig said.

But Mr Bell said Mr Anderson's email had conveyed that something had to be done urgently to address the company's cashflow problems.

Mr Craig was also questioned as to why $147.5 million had disappeared from the company's Premium Income Fund without proper documentation, which was a breach of compliance.

MFS chief breached disclosure rules Kate Lahey
August 18, 2010

CASH was so tight at the financial services group MFS in late 2007 that aside from using borrowed funds to pay its dividend, senior executives worried about how to pay an employee's entitlements, the NSW Supreme Court has heard.

Despite this, it took the deputy chief executive, Craig White, just a few days to find the $100 million MFS urgently needed to repay a loan from US lenders Fortress Credit.

Once he had secured the cash, he emailed the chief financial officer, David Anderson, saying: ''Come on mate, you know I wouldn't let you down. Told you I had the cash and do'', and ended his message with a smiley face

Full article::http://www.smh.com.au/business/mfs-chief-breached-disclosure-rules-20100817-128hm.html

The thing I find incredible is that during all this time ASIC and nearly every politician on both sides of federal politics knew we were pleading for help and some shady deals were being done under everyones noses.

A lot of people need to be thrown in jail for this and ASIC needs to be held to account for its role in our loss.

Who's in favour of a Class Action against ASIC? Enough is enough! At least they would have the money to pay us.

Hi Seamisty

Going back to the question you asked about investors who invested after potential insolvency and if they could claim as general creditors of OCV.

While not a lawyer I am guessing that it may come down to who was inducing you to invest. Was it OCV or the RE of the fund.

Having said that a investor in this boat could put a proof of debt into the liquidator of OCV to test the water as the liquidator would need to make a determination of status.

In relation to ASIC I am guessing they are waiting for liquidators report to see what breaches of law there are.

In another fine example called Westpoint this company used to put out these nice reports called Onpoint News which featured these collumn charts.

These showed how much total sales of the project would be, how much was debt to bank, how much owed to the promissory note investors, how much still owed on construction.

The top part showed a nice cushion of profit.

Problem was they repeatedly understated the amount they had actuallly raised from investors. One of these I recall said they owed 30 million when it was actually over 70 million meaning they could never pay back what they owed.

Project after project was the same.

Now to me this must be fraud or misrepresentation or some crime asinvestors were sent these as part of roll overs and new cap raising material.

To date no action against the two main people in this and in fact Norm Carey in court trying to argue that Westpoint was solvent when shut down by ASIC.

I know this is off topic but it shows how crazy this all is when you can rip people off and even with public documents showing the lies nothing happened

With $147.5 million missing from the Premium Income Fund, Mr White compiled a list of ''investments'' made the previous year to account for the figure.

At the same time, Mark Korda, from Korda Mentha, was appointed to advise the board, and the court has heard he advised it the group was solvent. Mr White told the court yesterday he did not think it was relevant to let Mr Korda know about the retrospective accounting.

''At that point in time I didn't see how that pertained to the solvency of the group, going forward,'' Mr White said.

Mr White has told the court he now works as a consultant. His examination continues today.

I would like to know who is employing this fellow as a consultant ??????????

Perhaps somebody wants to defraud a Major Bank and was looking for somebody with prior experience.