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Wellington Capital PIF/Octaviar (MFS) PIF

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MARCOM What is that they say ''THE REST IS HISTORY" I say history is not finished yet, not by a long way. Charles36, V/Pres. PIFAG, "WORKING TO PROTECT AND STABILISE YOUR INVESTMENT"
 
From Business Spectator's 29 January 2011

"Rich Pickings: The Art of Selling"
...
Bargain hunting
...
Gandel appears to be trying something similar. According to his selling agent, Simon Rowley of Jones Lang LaSalle, Gandel wants to switch out of physical property and into property shares, as he thinks Australia’s real estate investment trusts still represent good value. His timing looks good.
..."

Really?

So what's Hutson's WC doing about not making my PIF investment an easy takeover target?

Hutson's WC values PIF at 34.1c per unit (Jun 2010 valuation less 1c for the distribution late last year).

Yet under WC's watch the market currently values the units at 6.6c. And this is against the reported tide of money heading our way.

Is Hutson just too busy with G8 to bother with us?
 
Article in the AFR today starts with:

"Disclosures insufficient, says Octaviar auditor
PUBLISHED : 8 HOURS 18 MINUTES AGO

The external auditor of collapsed finance company Octaviar has admitted it was “more than likely” that related party transactions entered into by the failed Gold Coast company should have been publicly disclosed, but were not."

You need a paid subscription to view the article; does anyone have access to the Australian Financial Review? I'll be in town this afternoon and will try to get to the library for a copy unless another follower of this thread can post the article sooner.

Cookie1
 
Here's a bit more from the AFR article:

http://news.tradingcharts.com/futures/6/8/152520586.html

Jan 31, 2011 (The Australian Financial Review - ABIX via COMTEX) -- The New South Wales Supreme Court was told on 31 January 2011 that Octaviar failed to properly disclose related-party transactions. Mitch Craig, who worked for KPMG when the accounting firm acted as the auditor of Octaviar, agreed with the barrister for the liquidator that related-party transactions should have been publicly disclosed. Octaviar collapsed in January 2008, with debts of $A2.5 billion.

Publication Date: 1 February 2011

OCTAVIAR LIMITED
KPMG AUSTRALIA PTY LTD
SUPREME COURT OF NEW SOUTH WALES
BENTLEYS CORPORATE RECOVERY PTY LTD
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
JONES DAY
KORDA MENTHA AND COLLEAGUES PTY LTD
 
Thanks Cookie. Judgement day is looming!! This old 'Crikey' article is worth reading again::

http://www.crikey.com.au/2008/02/04/kpmg-the-common-link-in-allco-and-mfs-fiascos/

Both of MFS’s company secretaries were previously employed by KPMG; David Anderson, chief financial officer of MFS, was previously a partner at KPMG in the finance area while Kim Kercher, MFS’s chief “governance” officer was previously a manager at KPMG.

The auditor signing off on MFS reports (which in light of recent announcements, don’t seem to be entirely accurate) was Mitch Craig (who is KPMG’s National Partner in Charge of Risk Advisory Services). According to MFS’s 2007 Annual Report, KPMG were paid $483,600 for audit services. However, the audit fees pale in comparison to the non-audit related services performed by KPMG. The firm was paid $771,098 for assurance, taxation and diligence services in 2007. KPMG also provided $665,600 in non-audit services to MFS satellite, MFS Diversified (KMPG also audited MFS Diversified until last year).

In the Sarbanes-Oxley era, this is a farcical situation, with KPMG collecting almost double as much from MFS for non-audit related services as they did for conducting the audit. As noted by The Guardian back in 2002:

Regardless of the individual integrity of those involved, this situation [of auditors performing non-audit related services] raises a serious conflict of interest.

Where an auditor is providing other services to a company it is auditing, it can hardly be said to be independent and it is less likely to be critical or do anything that might embarrass management.

Companies may hire or fire an auditor. Consequently, with future career prospects and income hanging in the balance, there is little incentive for an auditor to publicly expose improper behaviour or “creative” bookkeeping being used by the company they are auditing.
 
Interesting!!http://www.abc.net.au/pm/content/2011/s3127207.htm

ASIC announces Westpoint settlement

Listen to MP3 of this story ( minutes)
Alternate WMA version | MP3 download
MARK COLVIN: The Australian Securities and Investments Commission has settled with directors of the failed property group Westpoint and its accountants KPMG.

Westpoint collapsed in 2006, costing thousands of investors nearly $400 million. ASIC has announced a settlement of about $67 million. The commission says that when this is added to other amounts, the total return to investors will be up to $170 million.

But it's too late for some, who have died since the saga began five years ago. Some, apparently, driven to suicide.

David Weber reports.

DAVID WEBER: ASIC says the settlement means that compensation action in the Federal Court has come to an end. The president of the Westpoint Investors Group, Graham MaCaulay says the return is not enough.

GRAHAM MACAULAY: I want to know where the other $140 million is that ASIC said they were gonna get from KPMG, is my reaction. And the other thing is remember that out of that money that they got back, of course, there will be liquidator's fees and other fees to be drawn from it.

DAVID WEBER: The terms of the settlement mean that none of the directors or KPMG has admitted liability. KPMG was accused of knowing of Westpoint's problems while signing off on its reports. In April, 2006, Westpoint's founder Norm Carey said investors would not have lost a cent if ASIC had not intervened.

But Graham MaCaulay says the commission should have intervened sooner.

GRAHAM MACAULAY: They didn't take any notice from day one when a Western Australian solicitor Doug Solomon advised Denise Brailey that the scheme was really a Ponzi; really it was a managed investment scheme and ASIC issued a no-action letter.

DAVID WEBER: What kinds of things have people had to put up with?

GRAHAM MACAULAY: Well it's been, I was actually the president of Westpoint Investors Group by chance not by choice and the things that have happened here I've spoken to people who have ultimately suicided, there's the people who have threatened to suicide, there is the, if you like the physical health dramas brought on by the changing fortunes; there's been all kinds of things come through down this telephone in that direction, but nobody seems to care.

DAVID WEBER: Is this enough money to make people, you know even if it's not what they expected, it's certainly not what they were hoping to get back out of the company when they invested the money in the first place, but do you think it might help some people move on at least?

GRAHAM MACAULAY: Well five, six years is a long time, yep, and from that point of view most of them are now inured to whatever's going to happen to them put it that way.

The current Labor Government said they would have an inquiry into ASIC if they came to power; they've done nothing about that. So they just know there's nothing they can do so what else do they have to do but survive in the best way they can.

DAVID WEBER: ASIC says several regulatory matters and investigations are continuing.

MARK COLVIN: David Weber.
 
After reading the various reports on ASIC's settlement of the Westpoint claims I am reminded of that famous statement

I'M FROM THE GOVERNMENT AND I'M HERE TO HELP YOU.

Thank god we are conducting our own litigation against KPMG!

According to reports on Business Spectator:
http://www.businessspectator.com.au...sation-pd20110201-DN3T7?OpenDocument&src=hp18
ASIC "...also sought $200 million dollars in damages from KPMG for alleged auditing negligence... The regulator said today's settlement could recover up to $67.45 million for Westpoint investors, although it's not yet clear how many investors stand to benefit from the deal."

That's a third of the claim! No wonder "the president of the Westpoint Investors Group, Graham MaCaulay says the return is not enough." according to the ABC's PM report.

And look what KPMG secured in return for the settlement: In a statement after the decision, KPMG said the settlement was not an admission of liability but brings to an end High Court proceedings started last year.

"KPMG cooperated fully with ASIC during its investigation into the Westpoint collapse. We share ASIC’s view that the resolution of the proceedings has been achieved in a constructive manner," it added. And remember that the terms of the settlement are CONFIDENTIAL.

An admission of liability would have increased KPMG's insurance permium so the lowly 33% of the claim ($67.45Mil) probably represents a saving on an increased premium.

From memory there was a recent case where investors took action themselves and secured a result 10 times that which ASIC had recomended through mediation.
 

The competency of ASIC is seriously questionable Marcom!! It was reported ::http://www.businessspectator.com.au...T-DEALS-pd20110202-DNRDZ?opendocument&src=rss

'ASIC’s investigation has cost up to $100 million, while receivers and liquidators have pocketed close to $55 million in fees.'


$155million of taxpayers money to recover $67 mill gross????? And from the same article::

'the settlement fails to nail those directly responsible for the fiasco '



'I'M FROM THE GOVERNMENT AND I'M HERE TO HELP YOU.'


That quote is as credible as 'I will chase that $147million to the end of the world. I will stay on the battlefield until I get it.'


Seamisty
 
Mitch Craig is currently (started 11am) being examined for the third time in the NSW Supreme Court today. Looking back over the reports of the last two examination sessions raises more qustions about what was going on at MFS.

This is an extract from the Australian 16 December - the first time Mitch Craig was examined:

Auditor quizzed over MFS accounts
* Susannah Moran

"Mr Craig was questioned yesterday by Adam Bell SC over a share sale entered into on the last day of the 2007 financial year.

"...Mr Craig said he believed the purchaser of the shares was outside Octaviar.

Documents shown to Mr Craig revealed that the purchasers of the shares were either principals or entities associated with the MFS principals.

When asked if he was aware of this at the time of the 2007 audit, Mr Craig replied: "I don't know."

Mr Bell also asked Mr Craig about a number of loans and the property secured against those loans. Mr Bell outlined five loans that were all secured by the same property, but Mr Craig said he was not aware of this when auditing the 2007 accounts..."

And from yesterdays AFR report on the continuing examination:

"...Mr Craig told the court the audit team had reviewed related party transactions "throughout the audit on a largely substantive basis because of the complexity of MFS.

"Parties make profits every day of the week by selling to related parties" he said and rebuked Mr Aspenall's suggestion the creditors rely on an auditors 'to stand in their shoes and protect their interests'.

He also said his 'level of concern wasn't higher in 2007'depite a profit increase as a result of selling to related parties.

The related-party transactions Mr Craig was questioned about involved Mr King, 'other key management personel' and former Directors"...

Does anyone know what this is about? Sounds like a case of siphoning off funds?
 
Filing away my latest PIF update, I noticed the miniscule photo of Ms Hutson. Despite its size, I guess it appears on the sheet as a symnol of reassurrance for devastated investors. For my part, the thumbnail image served only to remind me of the terrible share price - something that was never predicted at the 2008 roadshhows.
 
A media article of interest. I wonder if Jenny Hutson is still the 'corporate adviser' to Print Mail Logistics? Armstrong Registry Services were/are? substantial shareholders in PML.


http://www.solomonstarnews.com/news/national/10039-si-printer-selling
SI Printer selling? Friday, 04 February 2011 03:57
Talks of ICSI selling off SI printer


A SMALL company in Australia has been earmarked to purchase the run down Solomon Islands Printers Limited (SIPL), a source revealed.

It is Print Mail Logistics Limited (PML) which is based in Tasmania.

Our source said some members within the Government wanted to sell SIPL to PML despite it not having gone through the tender process.

"There is an under the table deal going on to sell SIPL," our source said.

"Government needs to put SIPL out for tender in accordance to the law."

However, Investment Cooperation of Solomon Islands (ICSI), which owns 100 percent of SIPL denied any knowledge of this shady deal.

"I am not aware of anything like this," one of the ICSI officers who refused to be named said.

"What I know is according to Government policy, it wants to put SIPL for liquidation because it can't meet its debt obligations.

"But whether to sell or put out for tender is something yet to be done," the officer said.

SIPL general manager, Steve Daniel Likaveke said it was wrong information that the Australian company would purchase SIPL.

"I have no further comments on this," he said.

"Only the Ministry of Finance and ICSI can release any information on the future of SIPL."

SIPL is one of the State Owned Enterprises.

It used to be called the Government Printers before being coporatised in 1994.



By EDDIE OSIFELO
 
Liquidator Kate Barnett back in Sydney Supreme Court for the third day this week.

KATHERINE ELIZABETH BARNET AS LIQUIDATOR OF OCTAVIAR ADMINISTRATION PTY LTD (IN LIQUIDATION) 200900291718 Assistant Registrar Equity A Musgrave Court 1 Darlinghurst 11:00 AM

They must really be giving Mitch Craig (ex KPMG) a grilling.
 
Wellington Capital has finally updated their website. Some interesting figures re some of their trusts etc. Some appear to be struggling. According to WC figures PIF unitholder numbers have increased from 10,387 to 10,729 Unitholders. The http://www.newpif.com.au/ website is missing so maybe getting updated or has been totally incorporated in the new updated http://www.wellcap.com.au/ version.

Seamisty
 

Very interesting Seamisty........ Hudson's answer to BRW's Lisa Allen's question "what is the most important relationship you have in business" - Answer - "the relationship with the providers of capital (ain't that us??) being both the equity and debt providers"
 
I like this bit JohnH::Wellington offers corporate
solutions beyond the conventional
to ensure our clients keep ahead
of an ever changing market:

Rimcorp Property Trust No 4 offered clients an Estimated distribution yield of
8.45%*p.a. for 7 years

Last year the return was 6.15%, this financial year nil.

Some of the other trusts will not mature when expected but will have to be extended so it appears investors are locked in beyond the original term, some with no distributions it seems.

PriceWaterhouseCoopers have drawn attention to the Derrimut Industrial Property Trust to the fact that there is significant concern as to whether the trust will continue as a going concern.

No wonder the race is on to empire build G8 education to try and emulate S8, but honestly, apart from MFS grossly overpaying for S8 and take away the duplication of booking commissions which must have bolstered figures no end, just how successful was S8? IT contributed largely to the demise of MFS/OCT in my opinion when it failed to realise its trumped up value.


Not exactly figures for nominations of any awards for delivering exceptional returns or.....anything really? 1 cent of our own capital returned after two years of and decimating the unit value rather than rebuilding it?


'Wellington Capital has a reputation for high standards of client service, innovation and devising successful commercial solutions to complex issues.

Our sucess has been fuelled by strong, longstanding relationships which have been built on trust, a commitment to delivering commercial advice and focussing on helping clients achieve their long term aspirations'

Seamisty
 
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