Wellington Capital PIF/Octaviar (MFS) PIF

JohnH · 24 May 2011

JohnH said:
Seamisty, how can we stop this latest decimation of our fund? This means that to maintain the voting power of our units we would have to chuck in a further 27% of our original investment! "

........ just received the "offer" docs, and of course that should be 2.7% not 27%

.................. Hope I didn't mislead anybody.

marcom · 24 May 2011

From the WC release on 17 May. Placement - $7.55 million raised
Wellington Capital Limited as responsible entity of the Premium Income Fund has finalised the placement of 75.5 million units raising $7.55 million at $0.10 per unit to professional and sophisticated investors.

Now I will need some help from those investors that are familiar with the share market.
If professional and sophisticated investors have purchased 75.5 million units raising $7.55 million at $0.10 per unit, when the constitution is amended to restore only $1 units does this mean that Castlereagh can issue them with a bill for 75.5million units @$0.90. If so they will be required to pay $67.95m into the fund. If they refuse to pay Castlereagh can confiscate their units and we still make $7.55m.

Now if a full 7% distribution (not return of capital) to all investors costs approx $830.5 million @ 7% is only $58.135m - this is the ultimate ponzi scheme!

Equally any current investors (or new investors if no one takes up the offer) who subscribe at $0.09 per unit, they will be issued with a bill for the balance at $0.91, allowing for further distributions.

Under this senario the professional and sophisticated investors do not look too professional and sophisticated, and I doubt whether WC will have much of a chance to sell any more units.

simgrund · 24 May 2011

charles36 said:
Hi Michael, I have left phone messages for you but now I know why they remain unanswered. If we have your email address on record I will ensure you get documents. If not perhaps you could leave your email address by private message in the notification section. This message can apply to any person in similar circumstances who may be reading this post.

Hi Charles,
There is delivery in private message box.
Thanks, regards

charles36 · 24 May 2011

marcom said:
From the WC release on 17 May. Placement - $7.55 million raised
Wellington Capital Limited as responsible entity of the Premium Income Fund has finalised the placement of 75.5 million units raising $7.55 million at $0.10 per unit to professional and sophisticated investors.

Now I will need some help from those investors that are familiar with the share market.
If professional and sophisticated investors have purchased 75.5 million units raising $7.55 million at $0.10 per unit, when the constitution is amended to restore only $1 units does this mean that Castlereagh can issue them with a bill for 75.5million units @$0.90. If so they will be required to pay $67.95m into the fund. If they refuse to pay Castlereagh can confiscate their units and we still make $7.55m.

Now if a full 7% distribution (not return of capital) to all investors costs approx $830.5 million @ 7% is only $58.135m - this is the ultimate ponzi scheme!

Equally any current investors (or new investors if no one takes up the offer) who subscribe at $0.09 per unit, they will be issued with a bill for the balance at $0.91, allowing for further distributions.

Under this senario the professional and sophisticated investors do not look too professional and sophisticated, and I doubt whether WC will have much of a chance to sell any more units.

MARCOM This must have deal is not done and dusted yet, not by a long way in my opinion, for what that is worth, of course.

Duped · 24 May 2011

ASICK said:
I refer in part to a letter received by an investor in your fund from ASIC. ASIC responded because of a complaint made by the investor in relation to the placement, "... Section 601GC(1)(b) of the Corporations Act 2001 (the Act) provides that a responsibile entity may alter a scheme's constitution if it reasonably considers the change will not adversely affect members' rights. At law, the question is not a general question whether members would be 'worse off' if the change is made (for example, it is not a general question of prejudice or financial disadvantage). It is a specific question that goes to the narrow matter of the affect of the amendments on members' rights as set out in the constitution, for example, a member's right to vote or a member's right to withdraw from the fund. ..."

ASIC doesn't concede that the amendment cause members to be 'worse off' but then on the other hand, it doesn't state they are not 'worse off'.

The above excerpted paragraph is then closed with, "... Of course, in making the amendment, the responsibile entity must act honestly and in the best interests of members in accordance with section 601FC of the Act. ..."

In my view, Section 601FC is shattered when a manager causes a diminution of members' interests in the fund by merely amending the constitution.

With regard to section 601FC, 'interests' is not narrowly defined, but rather broadly defined. ASIC did not make a determination as to whether 601FC is breached by the amendments, and ASIC should have.

Astounding! On the one hand ASIC purports to restict the broad meaning of "interests' in section 601FC by the narrow meaning of 'interests' in section 601GC(1)(b).

To my mind, ASIC should have also determined whether the manager complied with section 601FC which might have brought ASIC to an entirely different conclusion.

Isn't ASIC just saying an RE can amend the constitution if it's in the best interests of members - except where that amendment adversely affects members rights. I.e. the RE can't make an amendment that adversely affects members rights even if it's in members best interests.

Issing new shares certainly dilutes member's interests (IMO) but does issuing new shares dilute a members rights? E.g. the right to vote is still there, unchanged, but the value of that right for the original unit holders has been diluted. It seems ASIC is saying the 'rights' per se haven't been 'adversely affected' even if the value of that right has. Grrr. Just like the value of a federal senate vote by e.g. a NSW citizen has diluted as the NSW population has increased dramatically compared to e.g. Tasmania. A federal senate vote by a Tasmanian is now worth about 14 times as much as a NSW voter.

I can see ASIC's point. But it still doesn't explain why ASIC lent the Commonwealth brand through its AFS licensing of financial advisors to flog this product to me.

Wellington's amendment still needs to pass the 'best interests' test.

For all of you who've seen 'The Social Network', what WC is doing to us is similar to what Parker and Zuckerberg tried to do to Saverin.

ASICK · 24 May 2011

Duped said:
Isn't ASIC just saying an RE can amend the constitution if it's in the best interests of members - except where that amendment adversely affects members rights. I.e. the RE can't make an amendment that adversely affects members rights even if it's in members best interests.

Issing new shares certainly dilutes member's interests (IMO) but does issuing new shares dilute a members rights? E.g. the right to vote is still there, unchanged, but the value of that right for the original unit holders has been diluted. It seems ASIC is saying the 'rights' per se haven't been 'adversely affected' even if the value of that right has. Grrr. Just like the value of a federal senate vote by e.g. a NSW citizen has diluted as the NSW population has increased dramatically compared to e.g. Tasmania. A federal senate vote by a Tasmanian is now worth about 14 times as much as a NSW voter.

I can see ASIC's point. But it still doesn't explain why ASIC lent the Commonwealth brand through its AFS licensing of financial advisors to flog this product to me.

Wellington's amendment still needs to pass the 'best interests' test.

For all of you who've seen 'The Social Network', what WC is doing to us is similar to what Parker and Zuckerberg tried to do to Saverin.

I agree. It seems a nonsense that by having a unilateral constitutional amendment pass the narrow test under s. 601GC(1)(b) of the Act, a manager is then entitled to disregard its essential obligation under the Act (s. 601FC).

seamisty · 24 May 2011

http://www.nsxa.com.au/ftp/news/021724039.PDF
CORPORATIONS ACT
SECTION 657E
INTERIMORDERS
PREMIUM INCOME FUND
Wellington Capital Limited as responsible entity for the Premium Income Fund (PIF)
made an application to the Panel dated 11 May 2011 in relation to the affairs of PIF.
The Panel ORDERS:
1. Mr James Byrnes and ALF PIF Finance Limited (ALF Finance) not publish or
dispatch any further material to PIF unitholders in respect of the off-market
takeover bid by ALF Finance for all of the units in PIF (ALF PIF Offer) or make
any variations to the ALF PIF Offer.
2. These interim orders have effect until the earliest of:
(i) further order of the Panel
(ii) the determination of the proceedings and
(iii) 2 months from the date of these interim orders.
Alan Shaw
Counsel
with authority of Peter Scott
President of the sitting Panel
Dated 24 May 2011

zixo · 24 May 2011

seamisty said:
http://www.nsxa.com.au/ftp/news/021724039.PDF
CORPORATIONS ACT
SECTION 657E
INTERIMORDERS
PREMIUM INCOME FUND
Wellington Capital Limited as responsible entity for the Premium Income Fund (PIF)
made an application to the Panel dated 11 May 2011 in relation to the affairs of PIF.
The Panel ORDERS:
1. Mr James Byrnes and ALF PIF Finance Limited (ALF Finance) not publish or
dispatch any further material to PIF unitholders in respect of the off-market
takeover bid by ALF Finance for all of the units in PIF (ALF PIF Offer) or make
any variations to the ALF PIF Offer.
2. These interim orders have effect until the earliest of:
(i) further order of the Panel
(ii) the determination of the proceedings and
(iii) 2 months from the date of these interim orders.
Alan Shaw
Counsel
with authority of Peter Scott
President of the sitting Panel
Dated 24 May 2011

Ironic how The ALF has always spruiked itself as being "one for the investors" against Wellington Capital. Its laughable that they think they'll do a better job than the scum sucking bottom feeders wellington who've simply profited on vunerability and insecurities of the PIF investors .
It would be one for the books if ALF are found to be the secretive sophisicated investors wellington is crowing about. I have no doubt in my mind which way the ALF vote rights would be directed at any impending egm.

selciper · 24 May 2011

I received my AG kit today. What a huge amount of work must have been put in by the AG!

NOR · 24 May 2011

selciper said:
I received my AG kit today. What a huge amount of work must have been put in by the AG!

NOT A LOT OF WORK US FOR US .PIF...JUST ... 7 FOR AND THERE ..OUT

seamisty · 24 May 2011

selciper said:
I received my AG kit today. What a huge amount of work must have been put in by the AG!

selciper you are correct and it is not over yet!! Thanks to all who recognise not only the committment, time, (not to metion anguish) and personal expense from PIF AG execs and supporters but also the support, expertise and access to top quality legal advice we have received from BRI Ferrier and Castlereagh Capital to be in a position to offer what we consider a better alternative to our current situation. We still have an intense work load between now and the proposed EGM so thanks to all of those signing and submitting their proxies early. Your FOR votes encourages us to continue our efforts on behalf of those, that like ourselves, recognise that we were conned by an expert!! We voted for Wellington Capital in 2008 who declared 'that they were committed to the full return of investors capital in the next 3 to 5 years' Wellington Capital as far back as July 2008 also committed to 'pay a DISTRIBUTION of 3 cents per unit to each investor before Christmas 2008. Wellington Capital stated that distributions would commence on October 2008 and 24 Dec 2008 and the CONTINUE DISTRIBUTIONS ON A QUARTERLY BASIS thereafter http://www.wellcap.com.au/assets/pif/updates/2008/InvestorInfoForumHandout.pdf
WC now appear to want to just wind up the PIF, dilute our units and score a bit of voting power along the way, quite the contrary to what we were promised!
Well I personally know of four other entities apart from BRI Ferrier/Castlereagh Capital that expressed an interest in being possible alternative RE's after it became apparent that Wellington Capital couldn't get their snout out of the trough long enough to actually produce promised results.The PIF AG actually approached BRI Ferrier and asked them to consider taking on the PIF as a preferred RE, Bri Ferrier did not approach the PIF AG. None of the other interested parties to my knowledge were prepared to actually personally fund and offer the same committment that we have received from BRI Ferrier/Castlereagh Capital. CASCAP http://www.cascap.com.au./ have got not only got my vote but my thanks for bearing with us for so long to make this happen. Seamisty

atlas1950 · 25 May 2011

Hi Charles36,

Just a quick thankyou for helping me out and advising me how to vote, while I am still overseas. I am sure there are more people like me who are iether overseas, interstate, or in country areas who faced the problems that I had.

As every vote will be so critical for us to get over the line, we need to try to liase with those investors who cannot get access to there voting papers and to try to get them to vote on there proxy papers.

Michael

charles36 · 25 May 2011

I was trawling through my vast amount of documentation yesterday and I came across the transcript of a meeting held in Melbourne in July 2008, The meeting of course was none other than that conducted by Wellington Investment Management Ltd. In the light of what has happened to our fund I believe it is compulsory reading. Perhaps someone with more computer literacy than I could even post it on the ASF. If anyone is interested perhaps you could leave your email address in the private mail box and I will send it to you.

simgrund · 25 May 2011

charles36 said:
I was trawling through my vast amount of documentation yesterday and I came across the transcript of a meeting held in Melbourne in July 2008, The meeting of course was none other than that conducted by Wellington Investment Management Ltd. In the light of what has happened to our fund I believe it is compulsory reading. Perhaps someone with more computer literacy than I could even post it on the ASF. If anyone is interested perhaps you could leave your email address in the private mail box and I will send it to you.

I will post it even if it is "confidential and privileged".
I got removed once before, so the precedent was created.
Address in PMB.

Also, WC's "offer" is open till 2 June 2011.
Any clarion call as to how to react for true PIFers; or leave the scramble to the Alfies of this world?

Thanks,

simgrund · 25 May 2011

This is the first page of:
Transcription – Jenny Hutson, Wellington Capital
Melbourne, July 2008
It is of all 36 pages in total so please open the
View attachment 43015
It is for those with fond memories of what innocent b*s*t* used to be;
before wax in our collective ear got melted.
Regards,
----------------------------------------------------
Jenny: Ladies and gentlemen, thanks for joining me here today. Today is an important day in terms
of the communication of information and as you’ve just heard from Chris, we are here to
answer all of your questions and to have other people share in the benefit of other people’s
questions. But to do that we need to give you some information first and to put it in context I
think it’s important to reflect upon what has brought us here and the people that can’t be
here. And so I’d like to commence by reading to you 2 of the many hundreds of letters that I
have received so that you can understand how serious and important a business it is for me
and for my team in terms of creating the best possible outcome for you the investors in the
Premium Income Fund.
Jenny just to confirm my phone call to you today, we are desperate and ask please that you
reconsider our February maturity investments. We had hoped that we would be able to
continue as long as the usual interest was paid. However it was very embarrassing to be
advised by the bank that no funds had been paid and therefore our fortnightly rental
automatic payment could not be met. We have never had financial problems in our 76 years
and now this due to no fault of our own. We’ve always managed our affairs to the best of our
ability. I called on Centrelink a few days to try and get our full pensions reinstated. They
have declined as they say you have a capital amount and they are not concerned whether
interest is being paid or not as they only use the asset base. But they said we must make a
firm request to get the February maturity investments repaid as soon as possible hence this
urgent request to you. Due to my husband’s Alzheimer’s we cannot really move to a
cheaper, smaller unit but we have looked as there is absolutely nothing suitable. This place
has an enclosed backyard and is security gated which ideal of course under the
circumstances of our health conditions. As you know Jenny we tried to take up an offer with
our son which has also fallen through as no funds were forthcoming from yourselves and our
rent has gone up $20 per week. We’ve had to sign a new lease to be able to continue here.
We have done all we can by cancelling household insurance, not using fuel, cutting our
electricity usage to a minimum and we never go out. So there is nothing else we can cut
down on except food of course, which has always been frugal – no luxuries, we do not drink,
we do not smoke so we’re not sure what we can do to meet our telephone account. We also
tried for state housing but there is nothing available for many years. Please reconsider and
please help us. Thanking you in anticipation and trust something can be done.
One more before we come to the context of the fund. Dear Jenny, I am in receipt of your
advising of your organisation having taken over from MFS. Needless to say I’m appalled to
learn of the latest developments with the group and am gravely concerned as to what is
going to happen to my life savings and now I am in a position of financial despair having all
of my investment and interests being frozen since last February. As a loan pensioner now
living on a miserable and inadequate income to meet my central financial commitments, I
have had to borrow money from family and friends and meet expenses at my retirement
village and believe you me it is not a cheap existence and it is getting dearer. I am now at
wit’s end as to how I am to meet my essential commitments and it is now starting to affect
my health. I am not well enough to attend your meetings but please keep me informed of
any developments. All I want is my money back. I said some time back that MFS and
Associates were not being honest with investors. It appears now that I might be right.

seamisty · 25 May 2011

Simgrund I read the transcript in its entirety earlier this morning. No wonder Wellington Capital Ltd removed the 6 part video link to the Melbourne PIF Investor Forum from their website!! All those 'misleading' promises and 'deceptive' statements, enough to make one Seamisty

simgrund · 25 May 2011

seamisty said:
Simgrund I read the transcript in its entirety earlier this morning. No wonder Wellington Capital Ltd removed the 6 part video link to the Melbourne PIF Investor Forum from their website!! All those 'misleading' promises and 'deceptive' statements,

enough to make one Seamisty

Was it before or after brekky?

marcom · 25 May 2011

The latest misleading and deceptive BS from WC:

Duped · 25 May 2011

marcom said:
The latest misleading and deceptive BS from WC:

I wonder what ASIC think of the "commercial morality" of that WC announcement.

I wonder what Ian Ferrier thinks of being posted along side Jim Byrnes.

Or the financial press for that matter. If there is respect for Ian Ferrier in financial circles then the press must be sitting a bit uncomfortable in their seats given their support for Hutson. They invited her to the party. Ferrier would be a big scalp for Hutson to claim. Who's next?

Duped · 25 May 2011

seamisty said:
http://www.nsxa.com.au/ftp/news/021724039.PDF
CORPORATIONS ACT
SECTION 657E
INTERIMORDERS
PREMIUM INCOME FUND
Wellington Capital Limited as responsible entity for the Premium Income Fund (PIF)
made an application to the Panel dated 11 May 2011 in relation to the affairs of PIF.
The Panel ORDERS:
1. Mr James Byrnes and ALF PIF Finance Limited (ALF Finance) not publish or
dispatch any further material to PIF unitholders in respect of the off-market
takeover bid by ALF Finance for all of the units in PIF (ALF PIF Offer) or make
any variations to the ALF PIF Offer.
2. These interim orders have effect until the earliest of:
(i) further order of the Panel
(ii) the determination of the proceedings and
(iii) 2 months from the date of these interim orders.
Alan Shaw
Counsel
with authority of Peter Scott
President of the sitting Panel
Dated 24 May 2011

Homepage for takeovers.gov.au prominantly displays the Kirby J quote "Certainly, it was open to the Federal Parliament to conclude that the nature of takeovers disputes was such that they required, ordinarily, prompt resolution by decision-makers who enjoyed substantial commercial experience and could look not only at the letter of the Corporations Act but also at its spirit, and reach outcomes according to considerations of practicality, policy, economic impact, commercial and market factors and the public interest."

I wonder how promptly this panel will issue further orders? After it's too late for ALF PIF?

Aside: that quote is gold. It sounds to lay me that Kirby didn't have confidence in the quality of legislation coming out of Canberra. I.e. - I'd prefer you didn't bring your disputes into my court. After following the Octaviar case - I wouldn't be surprised.

Wellington Capital PIF/Octaviar (MFS) PIF

Similar threads

Privacy & Transparency

Privacy & Transparency