Wellington Capital PIF/Octaviar (MFS) PIF

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

One young guy had a good question that maybe someone else can elaborate on. He was reading something that said MFS related people have 60mil units. Jenny said she didn’t know about this and would look into it. I think one of our AG members had the same document so hopefully can post regarding this. She did say that the top 20 investors in the fund were not MFS related.

Was it from my post #664

Page 52 of the PIF Annual Report 2007
MFS Administration Pty Ltd held 60,000,000 units. 6.82% of the fund.

From what JH said it looks like MFS Admin got them out in time. Where did the money come from and where did it go? I'm guessing the 60M units were bought just to jack up the numbers. (Or perhaps to avoid a default!!!!) Look at the chart in the June investor update. (See http://www.octaviar.com.au/managed-funds/investorupdates.html) There's a nice fat little spike in $ (read units) in June 07 that cuts through the ugly flat line of the preceding 6 months. Looks like a jump of $60M doesn't it. Hmmmm.

Contrary to what I wrote in my #664 post, after what JH said, MFS Wholesale PIF is not really a related party. It is just a group of investors like us, each with a stake $500K+. Ouch. They only make up 80M or 10% of the fund so their future is in our hands. Treat your vote with respect.

JH noted a couple of times there were 200 companies in the MFS group. WOW. No wonder the overheads were through the roof.

 

[2CentsWorth]

Re: Octaviar MFS Premium Income Fund PIF

JH has done it!
Here is the just released request to list our fund on the NSX.
Fancy that!... right on the eve of our first meeting in Brisbane.

http://www.nsxa.com.au/float_details.asp?nsxcode=PIND

Well Bumblebee,
when JH was asked about this at the meeting today, she replied that she had as yet, not been formally notified of the 21 July listing date , and as far as she was concerned, the date was still up in the air.

Methinks somebody at the NSX has bungled prematurely, because if you look there tonight, all trace and detail have disappeared.

Could this possibly be a sign of things to come ?

 

[goldfinger38]

Re: Octaviar MFS Premium Income Fund PIF

Dear Fellow Action Group members

And Hi Dora it was a pleasure to meet you and other Action group members in person

Well it was the Jenny Hutson show and of course, She is a wonderfully kind and caring person

You get 30 minutes complete with video footage of her accomplishments and pre arranged questions and answers accompanied with half time tea and bickies

Followed by questions and answers

My evaluation is that it is going to be very hard to battle against this sort of group propaganda and brainwashing . She is good ;Very good, may even be related to Joseph Goeballs who did all the Hitler indoctrination rallies ,poor naive investors are totally unaware their may be other options . BECAUSE she doesn’t GIVE ANY

Action group members are going to have to steel themselves to this honey trap and go for her throat as I did on the NSX which I am positive is her week point

I have just found out there were 428 trades this Calendar Year on the NSX which averages at 3.5 trades a day AND SHE CALLS THAT PROVIDING LIQUIDITY


Well I did my best for you dear friends , and gave her a hell of serve , in the short time span I had ,and I think she was rattled, was basically unable to answer with any logical reason for the listing ( I suppose if I had really wanted to be nasty I could have mentioned their may have been a certain type of nepotism involved) You hear a lot of strange stories on the internet


Unfortunately unless we find some way of legally getting hold of the books and finding out what our assets are really worth before August NSX listing vote . I do not think we have a snowballs chance in hell of stopping her plans for the Fund

Thank you for the update and copies of handouts for those that attended the Birsbane unitholders session. It allows us investors who are attending the Melbourne Session to be pre armed with details so that we may be able to ask the hard questions although it appears she will either not give us too mcuh time or may not choose to answer those questions whe finds too tough.

However I wish to clarify some points about the proposed listing of the units on the NSX and the "fear" that once this happens it will allow the decimation of our unit values to those that are successfully traded on the exchange (if they are able to do so given the limited number of trades on a daily basis)

The NSX will allow those investors who for instance want to get their money out now no matter what the value might be to do so. Obviously if WC is going to propose to hold onto our money for a lot longer in order to recover as much value as possible there will be those that do not wish to wait around. Therefore they can choose to sell their units on the NSX provided they can get someone to offer a "buy price" that is close to what they may be asking for. It is no different to someone wanting to sell their shares but uses an "off-market" transfer system where they sell their shares to someone without actually trading them in a formal sense.

The unti price and value of the actual units held by the RE now being Wellington Capital will not alter from their $1 unit price at this stage. The current look through value is around 93c as per the balance sheet figures provided at the unit holder meeting in Brisbane assuming they recover all of the monies owed to the fund by all parties.

Therefore anyone choosing to sell their units in this manner will not affect our units or their value as all the investor is effectively doing is transferring their units over to someone else who then takes on the risk associated with the running of the fund by WC and those who may think that they will see an increase in their unit value or recovery via the fund over time.

Let me put is this way, you are in a car going on a road trip and along the way some one replaces your spot on the trip because you need to get out and do something else, the person who takes your place pays you part of your original cost to participate in the trip and they then benefit from the road trip, its sights and eventually ends up to where you were heading.

The reduced unit price was arrived at by Octaviar when it engaged liquidity and Solvency group 333 Capital ( a part of the Korda Mentha group) who are experienced in acting as administrators or liquidator of companies. The values arrived at are based on figures if they were to get no value or recovery at all out of the related entity loans to other MFS companies. a severly written down value of the listed securites purchase again from related MFS groups or companies that have seen their share values significantly reduced in the current market.

The actual mortgage loan that are secured with a registered first mortgage over property and have the Lloyds of London mortgage insurance policy in all likelihood should be recovered fully as they were the type of loan that MFS typically lent on and recovered successfully in all cases. The estimated unit price on these loans once they are recovered over time according the the loan terms and conditions agreed upon when the funds were lent out should see a return of somewhere around 45 cents in the $ of our current unit price.

Therefore provided the liquidate option is NOT selected we should definitely see more than the 14c in the $ proposed for the less favourable option.

There is still a lot more to quizz WC and Jenny Hutson on with regard to potential conflicts of interests and related party transactions however it appears as though for the moment that she me appear to be assisting us with our desire to get th emost favourable outcome possible.

However there is still a long way to go.

I hope that this has cleared up some of the misconceptions that have been discussed and allayed fears for those concerned about the NSX listing.

With regard to capital distributions being paid to unitholders as opposed to income, if they pay us part of our $1 unit price in instalments it just means that we are getting some of our own money back sooner rather than later and therefore instead of expecting to get back a full $1 at the ned of the journey we may only get back the difference between the $1 invested and what we have received over time with the quarterly instalments received.

WC should provide a distribution advice to stat whether the payment we receive is a return of capital or an income payment. Given the losses she has reports in the balance sheet in the Brisbane handout, it appears a the moment that there is not an income distribution to payout.

we should be asking her are the loans that are currently in the loan book paying their interest obligations and if so what are they doing with the money, how many of the loans are non-performing and what is the likelihood of getting both the loan amount and any interest plus penalties..

OK enough from me hope this helps.

see those tomorrow in Melbourne

 

[erniel]

Re: Octaviar MFS Premium Income Fund PIF

We need to be very clear on the distribution that JH has mentioned.
Is it capital redemption or a profit distribution, as this has tax ramifications for those who still pay tax.
Perhaps someone at the Melbourne meeting could get some clarity and post it here .
Thx to the Brisbane attendees for all the info you guys have provided after your meeting today, it is really appreciated.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Hi all,thanks for the news from todays meeting. I was just reading a media article from the AFR 3 July, where JH states that "We don't propose to see any management fees from this fund until unit holders have received a 3cents return." If that 3cents is coming from our own capital, I don't class that as a return. Is the PIF is not generating enough income to pay this, where will WC's management fee be paid from? I would then assume that after the 3-5years our unit price will not be $1.00, but whatever remains after the 'distributions' have been deducted from capital until such times as the PIF is generating enough income to cover them. Mb623 has covered some good points in post no. 707. Perhaps thes could be relayed as questions at another investor meeting. Regards, Seamisty

 

[Dexter]

Re: Octaviar MFS Premium Income Fund PIF

As an AG member at the Brisbane meeting today I was embarrassed by our representative who attempted to harrass JH with a prepared written script. He had made up his mind to attack JH before even hearing her out. SHE IS NOT THE VILLIAN.

I ask all unitholders to treat her fairly and with out preconcieved ideas.

Personally I believe she is going to prove to be our saviour.

PS: Quote from the PIF Investor Update distributed at the Brisbane forum today states in part: "The Board of WC plans to reduce the current bank debt to zero and pay a
DISTRIBUTION of 3cents per unit to each investor before Christmas. It is currently anticipated the DISTRIBUTIONS will be payable on 31st October 2008 and 24th December 2008. The PIF will then continue DISRIBUTIONS to unitholders on a quarterly basis."

These payments are not referred to as capital repayments (redemptions).

Give her a go.

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

G'day - I am getting conflicting impressions from AG members over the phone and here on the forum today. So, we still need crystal clarity of understanding of the basics of today's meeting:

Distributions were prior to the freeze, 7%-9% interest paid from profit.


Will distributions now be part profit (PIF earnings) and part our capital? If so what % of each?
OR
Will distributions be all from profit (PIF earnings)? If so (as one investor read it) - will it be 6c = 6% interest per annum on the full $ amount of our investment?
OR
Will distribution payments be all from our own capital? If so, shouldn't this, in fact, be called "part redemption payments" and not distributions?

I fully understand that PIF investors won't get full, immediate, redemptions out of the PIF fund itself - for that clearly you would have to cash in on the NSX (no doubt at a loss), but to clarify, will investors still get their principle capital investment back (whatever % it ends up being after 4-5years) via a drip feed, part, redemption payments, quarterly from the PIF fund itself? If so, will the drip feed redemption be separate from 6c (6%) per annum
distributions?

We need to be clear on what the terms distributions and redemptions (full or in part) now mean - surely Jenny has not begun to morph these terms at the forum.

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

Melbourne people will need to confirm this for themselves tomorrow but I can tell you that Jenny continually used the word distribution when talking about capital repayments. It wasn't until she was specifically asked, that she admitted these distributions were coming from capital. AND

The Handout says WC will start taking their proposed fee of 0.7% after the first 3 cents in distributions has been received by unitholders. She was very clear that this first 3 cents would be capital, so managment fees will commence before the fund is making any income for us.

I've attached my notes from today in one file. Some new stuff down the bottom. I.E. that Lloyds insurance will not help to claim any money as none of the loans covered by Lloyds are in trouble.

My feeling from today is I want someone other than the RE (who makes it clear that they don't want to liquidate) to tell us what our units are worth.

 

[Jadel]

Re: Octaviar MFS Premium Income Fund PIF

Goldfinger thank you for taking half a page to tell us the patently obvious

A Neanderthal with half a brain can work our that any trades on the NSX is not going to effect the price of the units

That is not the POINT MATE we do want OUR UNITS BEING Sold on the NSX by the financially desperate and sick to predatory scavengers because over time it will inevitably reduce the existing base of Investors

And these holders who enter at a pittance will not care TWO CENTS about what happens to the ORIGINAL HOLDERS

Therefore we as a group will be disadvantaged on any decisions that we need to take to protect our LONG TERM INTERESTS

Now if Jenny Hutson was too come up with some sort of original scheme whereby only existing unit holders buy from other unit holders that need to sell, at a discount that would be an excellent idea

The existing holders have got the most to lose and we know that they are averaging down to save their original investment and will be in for the long term therefore as a group we retain our long term investor base .And that is the most important point mate.

 

[zixo]

Re: Octaviar MFS Premium Income Fund PIF

A big Thank you to the Brisbane AG members for all their feedback.
No doubt many of the questions were never answered given the time frame and the amount of people at the forum

I think now is the time for the promised trust and transparency by WC to begin.
Any Brisbane Investors who want to ask questions from WC should start e-mails to clarify alot of the stuff which were not answered or avoided at their forum.

We may have to try to see how trusting WC really is.

email; investorrelations@newpif.com.au

 

[Jadel]

Re: Octaviar MFS Premium Income Fund PIF

Dexter exactly who are you ?

I can not represent somebody who has made 4 posts and never registered on the Brisbane Action group list

However if you would like to contact me personally , and register as a member , i am open to discuss all issues .

My main concern was to infornm investors that their were other alternatives
and to try my best to save their money

I hade less than five minutes to make my points

She had three hours, video presentations and other Wellington capital Directors to back her up

Jenny Hutson is perfectly capable of defending herself as Action group members will find out shortly when they attend thier respective meetings.

 

[iamspeed]

Re: Octaviar MFS Premium Income Fund PIF

I don't think people should get too stressed over the income versus capital issue. It sounds like a short term fix to get some $ in people pockets. Whatever combination it ends up being will be accounted for in the end of year statement for tax purposes. You will not be taxed on capital.

Think of it this way, something is better than nothing and it might just be enough $ to prevent someone getting desperate (your fellow investors) and selling for a pittance on the NSX.

The big issue is how is she going to turn $0.45 (maybe $0.65 if the Octaviar moons line up?) into $1 in 3 to 5 years. If money is lost on a loan, you can't make profit on another loan to compensate (these aren't shares).

Maybe a lot of the loans capitalise the interest (i.e. you repay principal and interest at the end of the term) and that is why there is no cash to pay distributions. Were past distributions being paid out of new investment inflows?

Maybe we should garnish Peacock's parliamentary pension?

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

Maybe we should garnish Peacock's parliamentary pension?

That of course would mean all 10,700 of us could live a very comfortable life on that alone!

 

[Javier]

Re: Octaviar MFS Premium Income Fund PIF

I don't think the possibility of recovering $20mil from the RE's PI should be overlooked by JH at all. This would represent her fee for at least 5 years. How dare she say it's not much when we have been robbed by so much already. Who is paying for the listing on the NSX..this should also be paid by OCV. It's this flippant view of the value of our money that has contributed to this debacle. She is a business woman, and I have been in business for a long time ..and any good business person will tell you when you are in trouble and struggling..MAKE EVERY PENNY A PRISONER!!!!!

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

That a promotional video should be being screened is inappropriate in these circumstances. The majority of the reports I'm reading don't fill me with optimism. My gut feeling tells me that I shouldn't let my guard down. JH"s reported response to the question re. $20m. from the RE's PI does not make any sense. That sum would cover a number of monthly distributions. We have to keep asking and looking.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

I don't think the possibility of recovering $20mil from the RE's PI should be overlooked by JH at all. This would represent her fee for at least 5 years. How dare she say it's not much when we have been robbed by so much already. Who is paying for the listing on the NSX..this should also be paid by OCV. It's this flippant view of the value of our money that has contributed to this debacle. She is a business woman, and I have been in business for a long time ..and any good business person will tell you when you are in trouble and struggling..MAKE EVERY PENNY A PRISONER!!!!!

Well said Javier, I have been in business(outside of OCV) extremely successfully for a very long time also..Every cent counts. To date, this debarcle is my worst ever, thus the reason to pursue those responsible for our current dilemma until they have been made accountable for their blatant disregard of the strict rules and regulations that were put in place by themselves. They will wear the result of their own misconduct. The investors of the PIF will not be the only ones finding it difficult to sleep at night. Seamisty

 

[flatback]

Re: Octaviar MFS Premium Income Fund PIF

G'day - I am getting conflicting impressions from AG members over the phone and here on the forum today. So, we still need crystal clarity of understanding of the basics of today's meeting:

Distributions were prior to the freeze, 7%-9% interest paid from profit.


Will distributions now be part profit (PIF earnings) and part our capital? If so what % of each?
OR
Will distributions be all from profit (PIF earnings)? If so (as one investor read it) - will it be 6c = 6% interest per annum on the full $ amount of our investment?
OR
Will distribution payments be all from our own capital? If so, shouldn't this, in fact, be called "part redemption payments" and not distributions?

I fully understand that PIF investors won't get full, immediate, redemptions out of the PIF fund itself - for that clearly you would have to cash in on the NSX (no doubt at a loss), but to clarify, will investors still get their principle capital investment back (whatever % it ends up being after 4-5years) via a drip feed, part, redemption payments, quarterly from the PIF fund itself? If so, will the drip feed redemption be separate from 6c (6%) per annum
distributions?

We need to be clear on what the terms distributions and redemptions (full or in part) now mean - surely Jenny has not begun to morph these terms at the forum.

I agree breaker1 let JH respond to the question (will these payments be called part redemption or distributions, i believe they cannot be termed distributions when in all probability the payments are going to come from our CAPITAL i have said before that we must take a very practical approach to this issue we as a group of concerned investors must think with our heads and not our hearts,we cannot have our members standing up like rabble at these meetings beating their chests, please be rational, if any person in our group cannot understand (and there are many) fear makes people say and do things that you would not normally say or do (we are all angry) but we must put that anger to good use and correspond through this forum with ideas that are constructive DROP the negative.
cheers Flatback

 

[goldfinger38]

Re: Octaviar MFS Premium Income Fund PIF

Goldfinger thank you for taking half a page to tell us the patently obvious

A Neanderthal with half a brain can work our that any trades on the NSX is not going to effect the price of the units

That is not the POINT MATE we do want OUR UNITS BEING Sold on the NSX by the financially desperate and sick to predatory scavengers because over time it will inevitably reduce the existing base of Investors

And these holders who enter at a pittance will not care TWO CENTS about what happens to the ORIGINAL HOLDERS

Therefore we as a group will be disadvantaged on any decisions that we need to take to protect our LONG TERM INTERESTS

Now if Jenny Hutson was too come up with some sort of original scheme whereby only existing unit holders buy from other unit holders that need to sell, at a discount that would be an excellent idea

The existing holders have got the most to lose and we know that they are averaging down to save their original investment and will be in for the long term therefore as a group we retain our long term investor base .And that is the most important point mate.

Jadel all I was trying to state was that we need to stop harping in things that dont really have a significant impacg on the value of our investment and concentrate on the more improtant matters.

I appreciate your input however it appeard that ther were some investors on the forum that felt the lsitign on the NSW was an important and integral part of the process when in fact it was not. there are other importantr and more pressing matters, I know it appears blatently obvious to you but possibly not to others and therefore they need to be informed to correct some inaccuracies. At the end of the day we are all trying to provide some input with regard to a possible solution that may result in aq positive result for ALL invesotrs in the PIF, given thsat it appears that the management have been miselading us for some time now with incorrect comments and in fact thast have been sneaking cash out of our funds to cover their shortfalls in other related companies assiciated with MFS.

We all need to realise that in the end we want to come up with a positive result for ALL investors and that we are ALL working towards the sdame goal to recover as much of our $ invested in a reasonable period of time. Hopefully the Melbourne meeting will provide some further input given we have been pre warned with the information from the Birsbane investors. Sorry for the half page rhetoric previously given but felt it needed to be stated so that investors could concentrate on the more improtant matters at hand.

regards


godlfinger

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Investor's $1.2m boom to gloomNick Nichols

08Jul08

DENNIS Chapman was once a high net worth investor in MFS, feted with free dinners, box seats at football games and invitations to lavish Christmas parties.

Now he has virtually written off the $1.25 million he invested in the failed Gold Coast-based financial services empire.

Mr Chapman, 62, thought he was diversifying his investment by placing money into MFS's Premium Income Fund, the company's New Zealand subsidiary MFS Pacific Finance and directly into another troubled MFS offshoot, ski-resort operator MFS Living and Leisure, now known as Living and Leisure Australia.

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The former Brisbane businessman concedes he was 'suckered' into pouring more of his retirement funds into the group, and regrets recommending the company, since renamed Octaviar, to his friends and family.

He said even a week before the company's spectacular share collapse, MFS was claiming it had no exposure to the US sub-prime mortgage crisis.

But, on January 18, when company founder Michael King was detailing a capital raising and company restructure, the markets lost faith in MFS's business model, sending the group into a tailspin that claimed its award-winning Premium Income Fund (PIF).

Yesterday was the first time investors in the fund could vent their anger at having their distributions stopped and their money frozen for at least 360 days.

On the front line was Jenny Hutson, head of Wellington Capital, which assumed control of the fund in May.

Wellington yesterday told Brisbane investors how, over the next three to five years, it planned to recover all the fund's $770 million left in limbo by the MFS collapse.

It was the first of five meetings that Ms Hutson hopes will sway sentiment of the fund's 10,300 investors towards a continuation of the fund.

The only other prospect is liquidation, which she said could leave unit holders with just 14c in the dollar.

Mr Chapman was among 300 investors at the Brisbane meeting yesterday.

Most were retirees, although there were a handful of young couples.

Each had their own story of hardship, including an elderly woman who was in tears before the meeting as she revealed her husband had recently been diagnosed with prostate cancer.

The woman, who declined to be named, had more than $200,000 invested in the Premium Income Fund and had only $5000 in the bank to meet her husband's expected medical costs.

Despite regaining her composure, and a sense of hope, by the end of the meeting, she said she found it hard to trust anyone in the fallout of the MFS debacle.

Mr Chapman, although equally sceptical, was philosophical. "You've got to be realistic about these things," he said.

Although he has counted his entire investment in the MFS group as wiped, he did concede he would get 'some money' back, based on Ms Hutson's presentation.

His anger, though, rests with previous MFS management, which he said enticed him as an investor with free corporate-box seats to football matches at the Gabba and Suncorp Stadium, as well as three-hour lunches at Omeros Brothers on the Gold Coast.

The giveaways were matched with generous interest payments and assurances that the business was able to ride out, and even benefit from, the global financial turmoil that was beginning to unfold.

His failed investment in the MFS group has effectively reduced his investment income from $100,000 a year to 'zero'.

The emphysema sufferer now lives on a disability pension, worth $200 a week.

But he said there were 'lots of people worse off than I am'.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Hi All,

Just returned from the investor forum with the glossy handout (attached). The first hour was a powerpoint presentation with background on Jenny/WC and the history of the PIF. Investors were then given the floor for Q&A.

We will post our observations and the answers to our questions later today.

Regs,
Boots

DoraNBoots, Would you please tell me how to send the attached file with the hand outs to my e-mail so I can foward it on.Thankyou, Seamisty