Wellington Capital PIF/Octaviar (MFS) PIF

seamisty · 20 May 2011

How dare Wellington Capital have the audacity to accuse the PIFAG of being involved with explanatory material that is misleading and ambiguous!! Wellington Capital is the queen of misleading and ambiguous behaviour. One example that comes to mind is the Wollongong Hotel which was taken to auction on the 9th May 2009. I received the following from an employee of Jones Lang Lasalle after the auction with the relevant bids.
'Several parties were bidding on the property with the last bid at $ 40.5 million.The Auctioneer at this stage asked for instructions from the Vendors and it was aprox 30 minutes later that he was instructed to pass the property in as $ 40.5 million was not acceptable to the Vendors.'

Jenny Hutson was quoted as saying "the project had found a $40.5 million buyer after auction earlier this year, that deal fell through after a 'very short' due diligence" which was total crap! The $40.5mill offer was rejected (seen a word similar to that before) by WC at auction, not after. So, consequently, here we are more than two years later and the PIF has received a paltry $15mill from a project that was going to "reap the Fund $38mill in 2010" from a joint venture deal with an estimated revised gross total of $43.1. Had Wellington Capital accepted the original offer at auction of $40.5 mill in May 2009, we could have had our 3 cent return of capital and there would have been money left to finish other projects without having to capital raise over 2 years later by issuing another 300,000,000 million + shares which will do nothing but dilute our investment at the end of the day.
Incompetant? Deceptive? Misleading? Ambiguous? We've EXPERIENCED it all before, from previous and CURRENT management. I would have been the happiest person around had we received what WC promised, but it was less than 3 months into management I was being lied to by WC staff, still insisting we would receive a payment of sorts pre Xmas 2008. Well the rest is history, no transparency was forthcoming, no distributions, no positive outcomes from the highly qualified team of outstanding professionals at WC, stuff all. Periodic discussions offered never eventuated and we couldn't even get a simple vote result from the much touted IAC election. Don't even begin to think you can discredit all the hard work PIFAG executive committee members have done to get us to the stage where we have a chance to possibly make a difference WC. Your credibility rests amongst the piles of manure around the trough you have been feeding from for nearly 3 years. Seamisty

ASICK · 20 May 2011

Sorry to rehash an old point, after all, I am aware there's a lot of things going on, but I've just taken a look at Corporations Act, s. 601FM again, and in particular, "... Note: If the members vote to remove the responsible entity but do not, at the same meeting, choose a company to be the new responsible entity, or the company they choose does not consent to becoming the scheme's responsible entity, the scheme must be wound up (see section 601NE). ..." http://www.austlii.edu.au/cgi-bin/sinodisp/au/legis/cth/consol_act/ca2001172/s601fm.html?stem=0&synonyms=0&query=removal%20of%20responsible%20entity

I realise your EM has made it clear that if WC is voted out, and if a new manager isn't ready and willing to take over the fund, that the fund must be wound up, and it's that point that compels me to believe that many of your proposals are defective to extent of being effective before the ousting of WC takes effect (I guess in order to negate the 2% fee and perhaps other things): eg. "before Resolution 5 takes effect.”

I think the only possible reality is that once the votes for proposals 5 and 6 are made, and if carried, then WC is no longer the manager: Castlereagh would then be the manager.

I think the necessity to notify ASIC does not extend WC's management of the fund. The notification is not even manditory for WC since the new manager is able to give that notification in the event WC fails to do so: a mere formality.

Resolutions 5 and 6 are conditional upon each other in order to prevent a windup because the meeting cannot change its mind in the event WC is voted out and your proposed manager is not supported.

I think there's a strong argument to support the view resolution 5 will take effect at the same time as those relying on its effect to be delayed, in which case the requirements of those resolutions that require WC to do certain acts 'before resolution 5 takes effect' even if passed at a meeting, may fail if challenged in a court of competent jurisdiction.

Now, some of you might feel that the $5m is neither here nor there, but consider those resolutions which rely on being effected 'before resolution 5 takes effect', and it all then becomes a different story.

I won't encroach on these grounds again - but I thought it worthwhile expressing my view.

selciper · 21 May 2011

Some observations about class actions (SMH today).

http://www.smh.com.au/business/fincorp-investors-get-29m-20110520-1ewtp.html

DoraNBoots · 21 May 2011

My review of Wellington Capitals conduct as Responsible Entity of the Premium Income Fund.

Quarterly Payments
WC told unit holders at meetings and in the Explanatory Memorandum dated 18 August 2008 the target rate of return for the fund was 1.5 cents per unit per quarter.

Another document entitled Information Memorandum also dated 18 August 2008 said WC do not expect to make any cash payments to unit holders in the foreseeable future. This IM was only released to the NSX and was not sent to unit holders.

At this time ASIC took WC to court over these quarterly payment statements made in the Explanatory Memorandum and the judge concluded these statements were misleading. At the hearing WC appeared to mislead the judge saying there would be some amount of quarterly payments but would not say how much. WC continued to mislead investors at meetings and on the phone after this hearing saying the target rate of return per quarter was 1.5 cents per unit.

Comment:
There have been no quarterly payments.

Unit value
WC said they would restore the PIF’s unit value to $1 in 3 to 5 years.

Comment:
The NTA has gone from 45 cents to 32 cents in 2011 with the only way out of the fund being the NSX with buyers at only 8 cents. The unit value will decline again due to the May 2011 capital raising.
WC knew (or ought to have known) $1 wouldn’t be achieved in 5 years because they knew how impaired the fund was and had already lodged the $147.5 million statement of claim against MFS. WC failed to tell investors the extent of the MFS fraud before the Sept 2008 resolutions.

Buy Back
WC said in the Explanatory Memorandum dated 18 August 2008 and to investors "Up to 37.75 million units in the Fund will be redeemed by the Fund at 45 cents per unit by 18 September 2009"

Comment:
This buy back could not have been funded and did not eventuate.

WC stated the proposal “would enable unit holders to accept for the first 10,000 units and then on a pro rata basis.” It was impossible for each unit holder to have had up to 10,000 bought back using only 37.75 million units. This was bought to JH’s attention but she brushed it off saying some amazing computer program had worked it out and it must be right.

Also interesting to note JH saying “resolution 2 is an ordinary resolution whereby the RE is seeking authority from Unit holders to approve it making a buy back though the Fund.” There was never a need for unit holders to approve this buy back. The buy back was a gimmick with the sole purpose to entice unit holders to vote for them. This buy back proposal was not legally binding and didn’t disadvantage unit holders, plus it didn’t determine if unit holders participated.
In May 2011 WC did not seek unit holder approval for the capital raising and the constitutional changes which DO negativity impact unit holders.

3 cent payment by Dec 2008
WC stated in investor updates, in the Explanatory Memorandum dated 18 August 2008 and verbally they would pay 3 cents per unit to investors by 24 Dec 2008. WC threatened this would only take place if the Sept 2008 resolutions to change the constitution and list the fund are approved by unit holders.

Comment:
As at May 2011 1 cent is still outstanding. The second cent paid in April 2011 was made after WC became aware of the July 2011 EGM and just weeks before announcing the need to raise capital via new units at 10 cents per unit (NTA was 33 cents).

Threat of liquidation
JH said the law prevents the RE from extending the 360 delay on redemptions and that liquidation is the only option if unit holders didn’t vote to list the fund in Sept 2008.

Comment:
This was not true.
Lonsec said in their report: “the RE of the fund has the power to extend the 360 day redemption period under the existing constitution. However WCIM has determined not to exercise its power under clause 4.11 of the constitution to extend the 360 day redemption period”

Provisions existed in the Constitution where redemptions could be suspended whilst the Redemption Price was not able to be calculated or the redemptions would be to the detriment of the interests of unit holders. The option canvassed in the Explanatory Memorandum of having to liquidate the fund by March 2009 was deceptive.

WC are using these scare tactics again in 2011 telling unit holders in investor update and reported in the media that the July 2011 EMG could cause the fund to be wound up. This is not true.

Trading on the NSX
WC said they would ensure there is a market on the NSX (buyers) for the PIN units if people need to exit the fund. They said it was their job to promote PIN units.

Comment:
There has been no evidence of WC promoting PIN units which have traded well below the NTA and in small quantities.

However, WC had no problem finding a buyer for 75 million units at 10 cents in May 2011, while at the same time there is an existing unit holder on the NSX offering 100,000 units at 10 cents with no buyer. WC have not disclosed who the professional investor is but it is suspected they are in the same business as WC when it comes to covering up PIF dealings.

Capital Raising
In May 2011 WC said they need to raise capital to finish projects.

Comment:
It is suspected the capital raising first announced on the 6 may 2011 was a last minute scramble to get votes at the up and coming July 2011 EGM where it is proposed unit holders replace WC as RE.

1. Unit holders were not informed of the strategy to raise capital in this manner; in fact WC had said they would not do this. The investor update mailed to all investors dated 10 May 2011 did not notify investors of the capital raising.
2. WC are not giving unit holders adequate time to receive their placement documentation and take up the offer due 2 July 2011. It is likely that most investors will receive this information only one week before 2 July.
3. It was a last minute strategy; there were two changes to the constitution made after the fact (section 3.1 and 3.2 relating to Issue Price). Section 3.1 needed to be changed by WC twice to get it right after the placement was announced.
4. WC made a distribution less than a month before this supposed need for capital.
5. If WC were genuine about looking out for unit holder’s interest they would have made the offer available to existing unit holders first and not privately organise for some unknown entity to take a 10% stake in the fund at a discounted rate.
6. WC did not allow unit holders to vote on the constitution changes or the capital raising both which disadvantage unit holders.
7. WC were able to find a buy for 75 million new units at 10 cents despite there being unsold offers on the NSX (of existing units) also priced at 10 cents. This makes me question the motives of the buyer of the 75 million units.

Acquisition of (the RE of) the PIF
Jennifer Hutson told unit holders and the media WC would pay “north of $20 million” for Octaviar IM (the RE of the PIF)

Comment:
WC acquired Octaviar IM (The RE of the PIF) for effectively no real consideration which highlights the suggestion that this was not an arm’s length transaction. This lack of money going into MFS disadvantages the PIF as PIF is a major creditor of MFS. Also hard to imagine why MFS would be prepared to just give away its prized asset (PIF), I know MFS shareholders were not happy.

Will continue in another post as there is a word limit...

DoraNBoots · 21 May 2011

My review of Wellington Capitals conduct as Responsible Entity of the Premium Income Fund. Continued...

WC covers up for MFS.
After becoming RE of the PIF, WC said they were no longer associated with MFS or Chris Scott and that the acquisition of the PIF by WC was an arm’s length transaction.

Comment:
JH and Chris Scott continue to work together in other companies. The following shows WC putting the interest of MFS before PIF unit holders:

1. WC have not assisted the PIF class action, they have not provided necessary documents to the class action lawyers and have also tried to get the former RE removed as a respondent.

2. WC stated the illiquidity of the PIF in Feb 2008 was due to a rush on redemptions and did not mention the fact that $200 million was drawn on and used illegally.

3. WC said at the July 2008 investor’s updates and in documentation that the losses in the fund were due to the global financial crisis and glossed over the real reason which was the fraud by MFS.

4. WC have not taken any action against the former directors.

5. WC have not taken any action over the related party losses to LLA and continued to loan LLA money when they become RE.

6. WC went out of their way, spending PIF money to try to prevent an enquiry into MFS. WC were at court at the expense of the PIF assisting MFS in 2008 defending against the PTQ. The following judgements mention WC having motives other than that of looking out for the PIFs interests.
QSC10-017 2nd Feb 2010 states:
"[4] Each was a substantial creditor with a commensurate interest in whether the company was wound up or was allowed to pursue some alternative arrangement. But further, each company had another reason to oppose a winding up, which was that it would be likely to be subject to a liquidator's investigation. I made the same observation when refusing Wellington Capital Limited its costs of the proceedings to terminate the deeds of company arrangement. Further, the proper interests of these applications, as creditors of the company, did not require them to be participants in the subjects hearings in order to protect the interests of the company and creditors generally. Their case for the adjournment of the winding up application was no different from that argued for the company subsequently its administrators."
WC’s support of the Fortress DOCA was due to WC trying to avoid an inquiry into matters involving Octaviar and Wellington Capital .
Justice McMurdo (31 July 2008) says:
“[177] Secondly, it can be seen from the above discussion that most of the votes in support
of the DOCAs were by parties having an interest in avoiding an inquiry by a
liquidator: Fortress, Wellington Capital Ltd and PAC. That does not mean that
their views as creditors are to be disregarded. But it detracts from the arguments for
the DOCAs that a majority of creditors has made a commercial decision as to what
is in the interests of creditors as creditors.”

8. WC went out of its way in court using PIF money to support Deloitte to stay on as liquidator of Octaviar despite the conflicts of interest surrounding Deloittes. At the QSC09-283 QLD Supreme Court hearing new Liquidators Bentleys were appointed as liquidators of Octaviar Admin Pty Ltd replacing Deloittes. WC asked the court to keep Deloittes as liquidator despite Deloittes conflict of interests. At the QSC09-202 QLD Supreme Court hearing, the judge decided Deloittes were to be provisional liquidator until another was appointed. The judge did not accept a proposal by Delottes and Fortress which would see the $20 million paid to Fortress (on 23 Dec 2008 and 23 Feb 2009) put into an escrow account on the condition Deloittes would not to be investigated in the future for handing this money over while they were administrators of Octaviar.
McMurdo states in judgment QSC09-283: "Counsel for WC and PAC each suggested that to meet this potential conflict, the court could leave Mr Greig and Mr Harwood as liquidators but appoint other persons as liquidators to consider the questions for which Mr Greig and Mr Harwood would have a conflict." The judge in the application for costs states how Wellington Capital and OPI Pacific Finance went out of their way to have Deloittes stay on as liquidators and later dismissed WC’s application for court costs because they were not there to protect unit holders but rather themselves “the proper interests of these applications, as creditors of the company, did not require them to be participants in the subjects hearings in order to protect the interests of the company and creditors generally.” .. ."[5] Mainly for the reason that each company had its own interest in resisting an order for the winding up of the company, I am not persuaded to grant the order for costs which is sought. Each application for costs is dismissed."

9. WC lodged a statement of claim against MFS but never pursued it. The statement of claim contains what appears to be false information. WC say in the SOC that $147.5 million of the PIFs funds went to the MYF ($85 million) and OPI Pacific Finance participation loans ($62.5 million) when in fact ASIC say it went to MFS Administration ($130 million, paid to Fortress and other MFS creditors.) and OPI Pacific Finance ($17.5 million). WC are in a position to know the OPI Pacific loans are bogus and that $85 million never went into the MYF.

10. JH was involved in setting up the PIF. WC was an advisor to Chris Scott at the time MFS committed the fraud. WC assisted to get Chris Scott on the board of MFS and then were handed the PIF for no consideration in the following days.

June 2011 EGM
The following has taken place since WC became aware of the June 2011 EGM to replace them:

1. WC made a one cent per unit cash payment to unit holders.
2. WC organised contracts with buyers which WC say could fall through if they are no longer RE of the fund.
3. WC have changed section 3.1 and 3.2 of the constitution and issued 75 million units to an unknown professional investors for only 10 cents per unit.

GEO
Just days after acquiring the PIF in 2008, WC sold the PIF’s 9.4% stake in GEO to Trojan for $0.225 per unit when the market price was 39 cents.

WC justified the low unit price by saying if Trojan sell any shares above 25.5 c the PIF will get 40% of the profit.

Comment:
WC failed to mention this 40% upside deal was only valid until the end of 2008 and resulted in no upside for the PIF.
GEO was sold to Trojan whose director is former S8 director Andrew Kemp (other S8 directors were Jenny Hutson, David Burke and Chris Scott).

LLA
WC arranged for the LLA loan of $77 million to Arctic Capital to be written down to $20 million and also provided a further loan of $8 million as part of a deal which benefitted Octavia as a condition of the Arctic capital re-capitalisation of Living and Leisure Australia (LLA).

Comment:
Some of this $77 million was lent to LLA while WC was RE of the PIF.
There are discrepancies in the MFS, LLA and PIF financial reports when reporting on this loan. The reports show this unsecured debt facility was originally provided by MFS to LLA but later said to be a PIF facility.
It is negligent of the RE of the PIF to have lent further money to LLA when it was in a position to know they could not repay the money and also inappropriate for WC not to have included this loss as part of the legal action against MFS.

Withholding information
WC have refused to provide unit holders information which the Corp Act states is to be provided at cost.

Comment:
WC asked unit holders to pay $14,000 for a copy of the PIF members register and $500 for the WIP register. This WPIF was a one page excel spread sheet maintained by WC.

WC also provided the false information to unit holders that WC were not required by law to supply these documents. It was only after ASIC intervened that these documents were provided by WC to unit holders.

RBOS loan
WC continued to repay the RBOS loan when it knew the money had been drawn and used illegally.

Comment:
WC were aware of the misappropriation of the $147.5m by 24 June when the Supreme Court action was commenced. At which time the loan balance stood at $45M. WC secured finance to repay the RBOS when it was clear the RBOS loan had been drawn illegally. This should not have occurred and repayment stopped because of the legal action against MFS.

Will continue in another post as there is a word limit per post...

DoraNBoots · 21 May 2011

My review of Wellington Capitals conduct as Responsible Entity of the Premium Income Fund. Continued...

The Maximum Yield Fund
WC claim $85 million of the PIFs losses were due to the PIF putting $85 million into the MYF as class A units.

Comment:
WC are in a position to know $85 million never went into the MYF but went instead to MFS Administration as stated in the ASIC statement of claim.

Despite being in a position to know this, WC have distributed money to these bogus Class A units in the MYF, and have also voted on behalf of these units at MYF unit holder meetings. This denied the ‘real’ MYF unit holders any chance of having a say and reduced their return on investment.

MYF Investments
WC said the MYF had an investment in OPI Pacific Finance Notes and there was no prospect of return from this investment.

Comment:
It was only after a MYF unit holder investigated that he realised the MYF had an investment in OPI Pacific Finance Debentures and not Notes and that some return had in fact been received by WC from OPI. After this was raised with WC a payment was made to the MFY investors. WC also paid this return to the 85 million bogus Class A units which severely reduced the real MYF unit holder’s payment.

Reporting

1. There has been a lack of reporting on operating costs incurred in financial reports allowing WC to hide the reasons why expenses can change from, for example, $1.32 million estimated at 18th August 2008 to $10.95 million at 10th December 2008
2. The realised value of an asset is reported in comparison with the estimated realisable value. This is deceptive because the book value of the asset should be used for accurate comparison
3. The principal and interest amounts outstanding on mortgage loans are reported as at dates up to seven months prior to the date of the update.
4. WC gave a unit holder in the MYF a copy of the MYF’s Information Memorandum dated 23 November 2007 despite knowing this was a falsified document which had been back dated.

Wollongong
WC passed in an offer at an auction in March 2009 ie payment immediately for the Beach Street Wollongong property for $40.5 million and then signed a deal a few months later for $38 million with payment to be made when the last unit sells. At May 2011 the last few units are yet to be sold.

Investor Advisory Committee
The IAC did not provide any useful information to unit holders and proved to be a waste of unit holder money and I’d guess a waste of the time spent by the members of the IAC trying to get any useful information out of WC. As at May 2011 two of the IAC have resigned.

PIF Class Action
WC entered into an agreement with class action lawyers to provide necessary documentation but reneged saying “The agreement between Wellington Capital Limited and the Applications' legal representatives is at an end as a result of the dispute.”

It is a conflict of interest to have WC as RE of the PIF while they are also respondents in the PIF Class Action as the former RE (MIL formerly Octaviar IM). WC said they would only co-operate with the class action if the former RE (MIL) was dropped as a respondent of the class action. http://www.nsxa.com.au/ftp/news/021722507.PDF WC state:"The Notice of Motion sought to have the former RE (currently the Third Respondent in the class action) discontinued as a party to the court proceeding pursuant to an agreement entered into between Wellington Capital Limited and the Applicants of the class action."

WC are clearly putting their own interest (that of MIL) before PIF unit holders.

Disclaimer: The above was compiled from financial reports and investor updates written by WC. WC have been shown in a court of law to have mislead investors and to put their own interests ahead of unit holders including using unit holder money to preserve their own interest in court. It is therefore highly likely that some of the above information is inaccurate.

How an RE who has been shown to mislead investors and put their own interest ahead of investors is allowed to hold an Australian Financial Service licences is beyond me.

ASIC are aware of all of this information and have effectively done nothing. At the time of the Sept 2008 resolutions it was ASIC’s view that unit holders should vote NO if they don’t like the resolutions. ASIC turned a blind eye to the fact that unit holders were lied to in the following ways: investors were scared into approving the resolutions and also given unrealistic rates of return by WC. I do not believe unit holders were able to make an informed decision at that time. It was also suggested by ASIC back in 2008 that unit holders could take WC to court if we thought WC were acting illegally. It is unfair to expect a group of mum and dad investors to take an RE to court as the RE hold all the cards and can use the funds money to fight the case. If ASIC are not prepared to act then there is no protection for the average unit holder against a rogue RE. I don’t think it is realistic for unit holders to take an RE to court over these kinds of matters and there is no money in it for a litigation funder to take up the matter.

It is my view that this information shows WC can not be trusted and are not fit to hold an Australian Financial Service licences.

The END

flyinghigh · 21 May 2011

Since the fund was frozen I have been interested in developments but in a defensive sense preferred not to dwell on an unjust, undeserved substantial loss apparently beyond my control. Images of the MFS chairman leaving ‘in the best interest of the company’, listening to Australia’s treasurer suggest PIF investors were speculators (motivated by greed), and revelations of the reallocation (theft) of PIF assets was enough to make me feel physically sick.
The tenacious and inspirational efforts of contributors to this forum have demonstrated that not all circumstances of life are not beyond control. Thank you to all who have made so much happen for silent observers like myself. I look forward to June 16 and encourage others silently watching this thread to register in support of those who have turned our views toward the future.

seamisty · 21 May 2011

Thankyou DoraNBoots for that excellent summary of events relating to the PIF, justifing the reasons many of us feel the need to remove Wellington Capital Ltd as Responsible Entity. I am sure there will be many other detrimental activities conducted by WC that will be uncovered in due course. Your summary of the deceit and ineptitude relating to WC also leaves the door open for anther PIF investor Class Action in my opinion. Seamisty

charles36 · 21 May 2011

ASICK said:
Sorry to rehash an old point, after all, I am aware there's a lot of things going on, but I've just taken a look at Corporations Act, s. 601FM again, and in particular, "... Note: If the members vote to remove the responsible entity but do not, at the same meeting, choose a company to be the new responsible entity, or the company they choose does not consent to becoming the scheme's responsible entity, the scheme must be wound up (see section 601NE). ..." http://www.austlii.edu.au/cgi-bin/sinodisp/au/legis/cth/consol_act/ca2001172/s601fm.html?stem=0&synonyms=0&query=removal%20of%20responsible%20entity

I realise your EM has made it clear that if WC is voted out, and if a new manager isn't ready and willing to take over the fund, that the fund must be wound up, and it's that point that compels me to believe that many of your proposals are defective to extent of being effective before the ousting of WC takes effect (I guess in order to negate the 2% fee and perhaps other things): eg. "before Resolution 5 takes effect.”

I think the only possible reality is that once the votes for proposals 5 and 6 are made, and if carried, then WC is no longer the manager: Castlereagh would then be the manager.

I think the necessity to notify ASIC does not extend WC's management of the fund. The notification is not even manditory for WC since the new manager is able to give that notification in the event WC fails to do so: a mere formality.

Resolutions 5 and 6 are conditional upon each other in order to prevent a windup because the meeting cannot change its mind in the event WC is voted out and your proposed manager is not supported.

I think there's a strong argument to support the view resolution 5 will take effect at the same time as those relying on its effect to be delayed, in which case the requirements of those resolutions that require WC to do certain acts 'before resolution 5 takes effect' even if passed at a meeting, may fail if challenged in a court of competent jurisdiction.

Now, some of you might feel that the $5m is neither here nor there, but consider those resolutions which rely on being effected 'before resolution 5 takes effect', and it all then becomes a different story.

I won't encroach on these grounds again - but I thought it worthwhile expressing my view.

Thanks you ASICK, I can assure you that the PIFAG have engaged the largest firm of lawyers to advise and prepare all appropriate documentation. This of course has been at no cost to any unit holder. I am confident we are on the right track and want unit holders to believe that PIFAG have always acted in their best interest and have not in any way acted as our own lawyers.

marcom · 21 May 2011

seamisty said:
Thankyou DoraNBoots for that excellent summary of events relating to the PIF, justifing the reasons many of us feel the need to remove Wellington Capital Ltd as Responsible Entity. I am sure there will be many other detrimental activities conducted by WC that will be uncovered in due course. Your summary of the deceit and ineptitude relating to WC also leaves the door open for anther PIF investor Class Action in my opinion. Seamisty

DoraNBoots - an excellent start for a Statement of Claim against WC and others. The infamous $5m loan at 25% should also be included.

zixo · 21 May 2011

Thanks for all the extremely hard work from the AG members and investors who are trying to seek justice even though we've been blockaded by Government ministers and Government regulatory bodies.

This is dumbfounding reading considering it had quotes from the masters of uselessness... ASIC.

BAD advice, fraud, misleading information and deceptive conduct are causing "catastrophic" losses for investors and their families, the government's investment watchdog has found.

The Australian Securities and Investments Commission released research yesterday that the social impact of financial misconduct and bad advice also caused prolonged anger and depression in victims as well as long-term impacts caused by the underlying financial losses.

"This research highlights the very real social costs of investor losses following misconduct by financial advisers," ASIC Consumer Advisory Panel chair Jenni Mack said yesterday.

The main findings included most investors who lose money in managed investment schemes or through a financial planner's misconduct are never fully compensated.

These types of losses have a "corrosive effect on trust" for the wider Australian financial sector.

http://www.dailytelegraph.com.au/mo...ce-for-investors/story-e6frezcr-1226059385832

ASICK · 21 May 2011

charles36 said:
Thanks you ASICK, I can assure you that the PIFAG have engaged the largest firm of lawyers to advise and prepare all appropriate documentation. This of course has been at no cost to any unit holder. I am confident we are on the right track and want unit holders to believe that PIFAG have always acted in their best interest and have not in any way acted as our own lawyers.

good news. I'm pleased I was wrong on that one.

simgrund · 21 May 2011

Big thanks to DoraNBots for this detailed expose of WC tresdmill of broken promises.
Allow me to point out small pedantics regarding your #7224 paragraph on "June 2011 EGM":
We received 1st payment in October last year.
You probably meant the second payment made this year with the knowledge of impending AGM,
Thanks again,
Regards

seamisty · 21 May 2011

A big thankyou to all contributors, supporters and viewers of the thread. I am 'encouraged' to see that there has been 3,488 hits to this thread since 10.00 am yesterday. WC can no longer insinuate that the PIF investors who are 'disgruntled' at the performance of Wellington Capital's performance are a minority group. I am not a religous person but my mum was once a Sunday school teacher and I had to attend and I remember the saying "TREAT OTHERS AS YOU WOULD LIKE TO BE TREATED."

'This is not so that others, themselves, will "do unto you" what you have done unto them. It is because God, Himself, will "do unto you" what you have done unto others'

Not sure what the rules are in the grand scheme of the Enneagram are apart from personality profiling and using a not for profit prototype to reap tax avoidance benefits, but from what I see as a bystander its seems to be okay to benefit financially from companies that can multitask. Without going into detail, I refer to KAM, ( Kooralbyn Asset Management) got your attention now Jen, and David Burke and our external compliance officer, Philip Wibaux? You dare to question the integrity of others? Your activities have not gone unnoticed, by the way, who is driving the luxuary 4 wheel drive vehicle removed under instruction by David Burke with your consent from Forest Resort Jen? Yeh, registration TFR-02 2007 Land Rover discovery DSE. Yep, we the original PIF investors own that if it is proved that the Forest resort developers defaulted, not you or your new PIF diluted cohorts. I think your days are numbered WC. Seamisty

charles36 · 22 May 2011

Dear M/S Hutson, I note that you have espoused your economic credentials and have informed us that you have always had an economic outcome. Please inform my untaught mind what does that really mean? I believe all economic dealings have an outcome don't they? Whilst on the subject of economics I have tried to make economic sense of the sale of the Wollongong Hotel which, of course, with what little information I have been able to obtain. Now is your chance to please explain what skills were utilised to seal this deal I recall that the unit holders were promised 3 cents upon the sale of this hotel in March, 2010. A date that has long gone. I have many more instances but perhaps in fairness to you we will deal with one failure at a time? I will be waiting for the reply.

simgrund · 22 May 2011

seamisty said:
A big thankyou to all contributors, supporters and viewers of the thread. I am 'encouraged' to see that there has been 3,488 hits to this thread since 10.00 am yesterday. WC can no longer insinuate that the PIF investors who are 'disgruntled' at the performance of Wellington Capital's performance are a minority group. I am not a religous person but my mum was once a Sunday school teacher and I had to attend and I remember the saying "TREAT OTHERS AS YOU WOULD LIKE TO BE TREATED."

'This is not so that others, themselves, will "do unto you" what you have done unto them. It is because God, Himself, will "do unto you" what you have done unto others'

Not sure what the rules are in the grand scheme of the Enneagram are apart from personality profiling and using a not for profit prototype to reap tax avoidance benefits, but from what I see as a bystander its seems to be okay to benefit financially from companies that can multitask. Without going into detail, I refer to KAM, ( Kooralbyn Asset Management) got your attention now Jen, and David Burke and our external compliance officer, Philip Wibaux? You dare to question the integrity of others? Your activities have not gone unnoticed, by the way, who is driving the luxuary 4 wheel drive vehicle removed under instruction by David Burke with your consent from Forest Resort Jen? Yeh, registration TFR-02 2007 Land Rover discovery DSE. Yep, we the original PIF investors own that if it is proved that the Forest resort developers defaulted, not you or your new PIF diluted cohorts. I think your days are numbered WC. Seamisty

Mentioning Enneagram again on this thread; I hasten to inform all that after arduos and hazardous rummaging through Vinnies, Salvos and other discarded bins, I am now in possession of a rare edition of the "The ENNEAGRAM" by the Illustrious Authority Don Richard Riso.
Anyone wishing to update their "diccovering your personality type" skills may make a request to have passages of personal interest recited on this forum.
As a reminder, the 9 personalities exposed are: 1. The Reformer; 2. The Helper;
3. The Status Seeker; 4. The Artist; 5. The Thinker; 6. The Loyalist; 7. The Generalist; 8. The Leader; 9. The Peace Maker
Warmly,

seamisty · 22 May 2011

simgrund said:
Mentioning Enneagram again on this thread; I hasten to inform all that after arduos and hazardous rummaging through Vinnies, Salvos and other discarded bins, I am now in possession of a rare edition of the "The ENNEAGRAM" by the Illustrious Authority Don Richard Riso.
Anyone wishing to update their "diccovering your personality type" skills may make a request to have passages of personal interest recited on this forum.
As a reminder, the 9 personalities exposed are: 1. The Reformer; 2. The Helper;
3. The Status Seeker; 4. The Artist; 5. The Thinker; 6. The Loyalist; 7. The Generalist; 8. The Leader; 9. The Peace Maker
Warmly,

For those interested there is a picture of Don Riso and David Burke on page 3 in this link http://www.enneagram.com.au/newsletter/insight0207v4.pdf There is also mentions of names closely associated with WC. Seamisty

selciper · 22 May 2011

"The time has come," the Walrus said, "To talk of many things: Of shoes - and ships - and sealing-wax - Of cabbages - and kings..." DoraNBoots' admirable summary will doubtless be useful to investigative journalists who may well finally spring into action after the EGM and write of many things..

DoraNBoots · 22 May 2011

Here’s an example of the way WC reported to unit holders the misappropriation of PIF money .

WC explains the loss of $85 million of PIF money in the follow manner:
$85 million went from the PIF to the Maximum Yield Fund (MYF). The MYF is another fund that was managed by MFS (and is now managed by Wellington Capital). WC state the MYF made a series of loans totalling $85 million but which are valued at $0.

Extract from the June 2008 PIF Annual financial report written by Wellington Capital states:
“The Octaviar Maximum Yield Fund has only three investments which have been valued as follows:
Q Deck (Qld) Pty Ltd: $30 mill, Fair Value $0
Octaviar Blue Sky Development Trust: $45 mill, Fair Value $0
Octaviar Pacific Finance Limited participation loan: $9.9 mill, Fair Value $0
Total $85,000 with a Fair Value of $0”

The 2008 MYF Annual financial report written by WC states this money was invested in accordance with governing documents but that money was lost due to the credit crisis and the collapse of Octaviar:
Extract from the June 2008 MYF financial report written by Wellington Captial:
“the Fund invested unitholders’ fund’s in accordance with the governing documents of the Fund and the provisions of the Fund constitution.” …
“However, the turmoil in the financial markets and the impact on property valuations as a result of the world-wide credit crisis, together with the collapse of Octaviar Limited, has caused a substantial decline in the value of the Fund’s investment portfolio”…”The directors, with the assistance of external adviser, have endeavoured to assess the potential value of each of the Fund’s assets. This process has resulted in a decline of approximately $85 million in the assessed fair value of the Fund’s loan and investment portfolio, in the opinion of the directors.”

These statements by Wellington Capital are outrageous when you consider what really happened to this $85 million of PIF money.

On 30th Nov 2007, the Royal Bank of Scotland paid $150 million into the PIF’s Operating Account. This same day $130 million of PIF funds illegally went from PIF’s operating account to MFS Admin’s bank account. To hide this misappropriation of PIF money, MFS are alleged to have fudged the books to make it look like the PIF bought 85 million units in the MYF.

The ASIC Affidavit_Forbes_Octaviar_Filed 20091029 alleges:
“42. On 30 November 2007, MFSIM as Responsible Entity for PIF, paid $130 Million from PIF’s Operating Account to Commonwealth Bank account BSB xxx, number, which was held in the name of MFS Administration. The funds were transferred by electronic funds transfer by Pertpetual, at the written direction of xx and xx on behalf of MFSIM as Responsible Entity for PIF.”

The ASIC Affidavit_Forbes_Octaviar_Filed 20091029 alleges:
“On 6 Feb 2008 by email sent xx and xx at 18:34 hours that day, xx approved for use as a record of MFSIM a document which on it’s face appeared to be an Information Memorandum dated 23 November 2007 offereing information to potential investors in respect of Class A units in MYF, which offer was expressed to close on 31 January 2008.” (the False Documents)

The ASIC Affidavit_Forbes_Octaviar_Filed 20091029 alleges:
On or about 18 Feb 2008, Michael Skepper of MFSIM’s internal compliance unit (Compliance) raised a concern that s1017E of the Act had been breached because, although the records of MFSIM as RE for PIF showed an investment of $85 million into MYF by MFSIM as RE for PIF, no corresponding funds were received into MYF application account (the anomaly).

The ASIC Affidavit_Forbes_Octaviar_Filed 20091029 alleges:
The documents pleased at paragraphs 109 – 125 (the False Documents) were kept by MFSIM as RE for the PIF as though they were genuinely part of the financial books and records of MFSIM.

A false document (the back dated Information Memorandum) is still kept by WC and was offered to a MYF investor in response to his questions about the fund.

The ASIC Affidavit_Forbes_Octaviar_Filed 20091029 states:
“135. The Half Yearly Reports contained false information in that:
(a) the accounts showed MFSIM as RE for PIF owned an asset comprising $85 million worth of Class A units in MYF, when it did not;

WC continued this false information in PIF and MYF financial reports.

Judge McMurdo states in his judgment on the 31July 2008:
“[142] It is further alleged that at the same time, those controlling the PIF purported to purchase units in another fund of which WIM was also the responsible entity. But no money was paid to that other fund, and the suggestion is that this was a guise to conceal the misappropriation of the $130 million paid to OA.

How WC can say the Fund invested unitholders’ fund’s in accordance with the governing documents of the Fund and the provisions of the Fund constitution is beyond belief.

DoraNBoots · 22 May 2011

DoraNBoots said:
...
Judge McMurdo states in his judgment on the 31July 2008:
“[142] It is further alleged that at the same time, those controlling the PIF purported to purchase units in another fund of which WIM was also the responsible entity. But no money was paid to that other fund, and the suggestion is that this was a guise to conceal the misappropriation of the $130 million paid to OA.[/INDENT]

Sorry this judgment is from 2009 not 2008.
It's judgment Re Octaviar Ltd (No 8) [2009]QSC 202

Wellington Capital PIF/Octaviar (MFS) PIF

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