Wellington Capital PIF/Octaviar (MFS) PIF

[communique]

Re: Octaviar MFS Premium Income Fund PIF

Have just emailed breaker1 and added my mothers name to the list.
It took a bit longer than I wanted to get her to agree to add her name as being a aged pensioner she didnt know what to do.
With $90000 invested the longer this goes on and the less they tell everyone the more she has got frustrated.
Trying to live on her pension and investment and with centrelink not any help.
I have emailed the minister looking after centrelink but as usual no replys or acknowledgement givin.

Wally, So sorry about your mum. We also know someone who has put their life savings over $1mllion into MFS PIF etc and is now working in a factory just to make ends meet. Does anyone know whether redemptions on sympathetic grounds have been paid to anyone applying. We think not.
We also don't understand why dividends have to stop. They are still getting payments in from loans aren't they? Smacks of the Gold Coast white shoe brigade. Michael King still lives in Elysium Fields, and his hard luck story in the press not long ago touched our hearts...NOT!!!!!

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

Wally, So sorry about your mum. We also know someone who has put their life savings over $1mllion into MFS PIF etc and is now working in a factory just to make ends meet. Does anyone know whether redemptions on sympathetic grounds have been paid to anyone applying. We think not.
We also don't understand why dividends have to stop. They are still getting payments in from loans aren't they? Smacks of the Gold Coast white shoe brigade. Michael King still lives in Elysium Fields, and his hard luck story in the press not long ago touched our hearts...NOT!!!!!

These Funds virtually want you on your death bed and pennyless before they consider you, but it's very much worth a try via an accountant mainly and a good report from your GP or specialist.

EARLY REDEMPTIONS POLICY - OPIF

Under normal circumstances, Octaviar Investment Management may, in its absolute discretion, allow withdrawals before maturity in certain limited circumstances, such as extreme financial hardship. A fee of up to 2% of the amount withdrawn applies if the request for early withdrawal is approved.

As set out above and in previous correspondence, under the terms of the standstill agreement with the third party bank, Octaviar IM cannot deal with the assets of the Fund, including for the purposes of paying redemptions, without the approval of the bank. Until recently, this meant that Octaviar IM could not entertain early redemption regardless of the circumstances of the application. In the most recent extension of the standstill agreement, however, the bank has agreed to consider allowing Octaviar IM to satisfy redemption requests in cases of extreme financial hardship.

A person is taken to be in extreme financial hardship if they have experienced a sudden change in circumstances which has a permanent and / or terminal impact directly on the unit holder.

As a guide, this may include instances of:

A terminal medical condition that was discovered during the investment term and was not pre-existing to the investment commencing and they are not able to meet reasonable and immediate living expenses without assistance.
An accident occurring during the investment term directly related to the unit holder which renders them unable to meet reasonable and immediate living expenses without assistance.
All requests for early redemption are required to be in writing by the unit holder and sufficient documentation must be provided in order to substantiate a valid case. Unit holders should note, however, that even if a request is approved by Octaviar IM, it is still subject to the approval of the third party bank.

Can anyone tell me if OPIF knockback decisions on early redemtions are open to appeal through any independant body?

 

[zixo]

Re: Octaviar MFS Premium Income Fund PIF

Its wonderful to see another person signing up...welcome willy

I wonder if the 2% redemption request is valid for people who were suppossed to get their funds returned at the end of January or notified the fund many months prior to their redemption date...does anyone know?

Heck .. I would like to know how understanding the PIF management team would be if they or their families future were being held to ransom the same way they so smugly have treated us.

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

Ms Hutson, Bring Down that Wall!

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

Has anyone else heard this
Following a large investment in the collapsed former investment bank MFS, the New South Wales Bookmakers Superannuation Fund is preparing to announce the first annual loss in its 30-year history.
You can read the full report here
http://www.acleardirection.com.au/bookmakers_caught_by_mfs___eureka_report_insert
Would be great if they could throw there weight and support into getting some questions asked.

I have asked a capable fellow OPIF investor in our action group to follow the NSW Bookmakers Super Fund up, to join us. An email was sent by him and I have subsequently asked him to chase the email up with a phone call to management of the Super Fund - should get a reply from him this week I hope.

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

That is an excellent article Wally, Possiblly worth a follow up Breaker or Rocky? Can anyone confirm the legallity of the loan (unsecured at that time) to LLA? Tuart what is your opinion regarding this please? From reading the PDS in relation to the PIF I was of the opinion that the guidelines did not allow this type of loan. I think that WC as Resposible Entity has an obligation to the PIF holders to inform us of the extent of all loans to MFS related companies, subsiduaries, entities etc. and where we stand as creditors in the event of OCV being liquidated. Regards, Seamisty

1] Getting an action group member to get back to me and give me his personal opinion on it! May post it for discussion.

2] Just to let all know that I have retrieved all the items lost in my Desktop PC that crashed last week. ALL emails sent me and details of our first action group members were stored their, plus new emails of investors asking to join us (on the same day it crashed). ALL LOST DATA HAS BEEN RETRIEVED!
I want to thank DORA N BOOTS a poster on this thread, for her help - she is an Outlook Express expert and she volunteered her assistance. Thank you "Dora" Glad to see the last of this complex problem - I am now taking much better back up action of our action group data base. So if there are any other problems - all should be well.

 

[scott francis]

Re: Octaviar MFS Premium Income Fund PIF

I am regular contributor to Alan Kohler's Eureka Report.

I previously wrote an article that looked at the failure of MFS Premium Income Fund and also the relationship between that fund and the NSW Bookmakers fund.

It is a terrible situation that investors with the MFS Premium Income Fund are in.

For my article I was trying to get my hands on a Product Disclosure Statement for the fund. I especially wanted to look at what level of disclosure had been made that the fund could:
Borrow to invest (an activity that changes the risk reward nature of the fund) and;
Lend money to related particles (like the Living and Leisure Trust) in an unsecured way

I am also interested in some disclosures around fees.

I am interested that these borrowing/loans did not seem to be disclosed on their website until the start of this year. I think that if they were not disclosed in the PDS then this would be a very interesting matter to bring into the public domain - ie how the hell were investors meant to know what was going on when it was not told to them in the PDS or the regular updates? How can that happen that someone's money is invested in a way that is never disclosed to them?

I don't think that this issue has had nearly enough publicity. I don't think many journalists understand the size of the fund, the poor way that MFS has behaved and the lack of information given to investors.

If any of you had a Product Disclosure Statement that you would not mind sending to me, my e-mail address is sfrancis1@optusnet.com.au .

 

[scott francis]

Re: Octaviar MFS Premium Income Fund PIF

Thanks very much. I now have a copy.

Cheers
Scott

 

[Jadel]

Re: Octaviar MFS Premium Income Fund PIF

Scott to answer your question these are the principal issues that need to be invesigated
.
1 / The PDS dated 31st 2007 does not divulge honestly fairly and openly the 184 million dollar loan from the Royal Bank of Scotland. This debt was cleverly hidden under the terms of loan facility agreement whereby they could draw up to 20% of the value of total assets. , to provide SHORT TERM FUNDING for opportunistic investments .The published assets are in fact stated as 770 million dollars making a travesty of the transparency guidelines required under ASX guidelines

2/ The breach of a Financial Covenant with the RBOS on December 31st was not disclosed to the market until march 19th 2008 exposing many new investors after that date to a huge financial liability .
3/ The PDS states SPECIFICALLY that all commercial loans are secured by a FIRST MORTGAGE OVER PROPERTY AND AN LVR OF SIXTY SIX PERCENT ( 66% )
4/ In view of the fact that Living and Leisure was suspended from trading on January 19th by the ASX for failing to provide audited accounts, it would appear highly likely that this company was unable to service its debt of 67 million dollars or eight percent( 8 %) of the total assets of the PIF well before that date . However their is no mention of this in the December 31st PDS which record the PRINCIPLE of loans in default as 17 million or( 2.2%) of the total assets

5/ Based on the figures supplied in the PDS it is not mathematically possible to have included the 67million Living and Leisure loan in the Asset breakdown for commercial loans or indeed any default of that loan

Under these circumstances we can only conclude that the PIF has used a deceptive and misleading scheme to circumvent the disclosure provisions of the Corporation Act in order keep this loan concealed from investors



We are of the opinion that the PIF has used a deceptive and misleading scheme outside of the requirements in the PDS Corporation Act to keep details of loan concealed from investors

 

[zixo]

Re: Octaviar MFS Premium Income Fund PIF

The sooner we reach the amount of names required to demand answers, the better. We really need communication and figures now.

Investors and perhaps shareholders need to become increasingly concerned the way Chris Scott has shoe horned his way onto the Octaviar board and has taken control, slotting his own close associates into positions which may or may not be in the best interest of investors.

This forum group has become the only positive and honest move thats evolved out of the whole Octaviar PIF mess.

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

Thanks very much. I now have a copy.

Cheers
Scott

Thank you for your input Scott - I take it you are journalist for the Eureka Report? This is an excellent media organisation, quite often giving media exposure to matters of importance that othe media do not.

What is your opinion of Jadel's insight ?

Is there a case for those who re-invested around Dec/Jan/Feb to get their investment returned?

Jadel,
Thanks for your answer to my email - well done mate!

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

UPDATE 5

1] The following is a copy of an Adobe Reader 8 attachment email sent to the Hobbs family of our Octaviar PIF Action Group from Jenny Hutson:

"PREMIUM INCOME FUND

Thank you for your email. I do understand that the situation for a very large majority of Unitholders is extreme. I do propose to answer all the questions that I have been asked by holding investor forums during the first week of july

I am at the office today with my team as I have been every day since we took over seeking to define the most desireable way forward. I am working with my team to be in a position to clearly define the fund's future. I expect to be able to do that clearly by the first week of July and to communicate that clearly to you and to all of the Unitholders and answer all questions that arise.

I take the responsibility of trying to achieve the best outcome seriously.

I look forward to meeting you.


Jenny Hutson
Chairperson
Octaviar Investment Management Limited"

This email was dated 9 June 2008.

Thank you M for making this contact with Jenny.

I note that Jenny says, "holding investor forums" in the plural. Does this mean she will be touring state cities (Southport, Sydney, Melbourne, Perth) or having several meeting at one central location. Sounds like the former. Further, she has signed the letter/attachment "Chairperson - Octaviar Investment Management Ltd" not CEO OPIF which confirms to me that she has not taken up the RE of OPIF yet and her saying, "seeking to define the most desirable way forward" indicates WC is still doing "due diligence" (checking the books) but feels confident of taking the helm of OPIF.

Initially, I'd have to say, that's good news from the point of view of OPIF trying to be transparent at last, but it's still 3-4 weeks away and the information we need to know the most, which is, how insular is the OPIF from OCV LTD, really? If a bomb hits OCV LTD in the mean time, can any creditor of OCV LTD make claims on OPIF assets? What will happen to the funds we are trying to get out of Living and Leisure (approx 67 mill) and the OCV LTD support facility (50 mill)?? - (that's approx. 15% of our money, correct me if I am wrong). But from the point of view; Is WC the best RE for the benefit of investors? This is another matter yet to be proven.

2] WE ARE NOW 64 COMMITTED INVESTORS IN THE OCTAVIAR PIF ACTION GROUP

WELL DONE FOLKS!

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

Breaker 1.
Agree with your analysis of the Hutson letter. At least a date is set for the circulation of information. But we must all remain vigilant. Take the PIF words written in the March 19 newsletter as a warning: "The MFSIM Board and its advisors are now focused on exploring initiatives to improve liquidity and allow the payment of income to unit holders and expect significant progress to be made before the end of the financial year 2008." Progress, I suppose paying the RBOS millions every month could classified as "progress".

I am sorry for PIF investors who don't know about this incredibly valuable site.

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

Breaker 1.
Agree with your analysis of the Hutson letter. At least a date is set for the circulation of information. But we must all remain vigilant. Take the PIF words written in the March 19 newsletter as a warning: "The MFSIM Board and its advisors are now focused on exploring initiatives to improve liquidity and allow the payment of income to unit holders and expect significant progress to be made before the end of the financial year 2008." Progress, I suppose paying the RBOS millions every month could classified as "progress".

I am sorry for PIF investors who don't know about this incredibly valuable site.

Two of our action group are trying to get articles into the Gold Coast Bulletin - if successful, that should help.

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

I am regular contributor to Alan Kohler's Eureka Report.

I previously wrote an article that looked at the failure of MFS Premium Income Fund and also the relationship between that fund and the NSW Bookmakers fund.

It is a terrible situation that investors with the MFS Premium Income Fund are in.

For my article I was trying to get my hands on a Product Disclosure Statement for the fund. I especially wanted to look at what level of disclosure had been made that the fund could:
Borrow to invest (an activity that changes the risk reward nature of the fund) and;
Lend money to related particles (like the Living and Leisure Trust) in an unsecured way

I am also interested in some disclosures around fees.

I am interested that these borrowing/loans did not seem to be disclosed on their website until the start of this year. I think that if they were not disclosed in the PDS then this would be a very interesting matter to bring into the public domain - ie how the hell were investors meant to know what was going on when it was not told to them in the PDS or the regular updates? How can that happen that someone's money is invested in a way that is never disclosed to them?

I don't think that this issue has had nearly enough publicity. I don't think many journalists understand the size of the fund, the poor way that MFS has behaved and the lack of information given to investors.

If any of you had a Product Disclosure Statement that you would not mind sending to me, my e-mail address is sfrancis1@optusnet.com.au .

Scott,

I recall hearing that commissions to advisors were dramatically cut in early 2007. I also recall there was a change of Chairman at MFS Ltd and a change of CEO at MFSIM.

I have hard copies of the PDS of 1 Sep 04, 30 Jun 06 and 31 Jul 07 if they are any help to you.

Have you had a look at the Investor Updates for PIF on the OCV website.
http://www.octaviar.com.au/managed-funds/investorupdates.html

Only Sep06, Dec06, Mar07, Jun07, Feb08 & Mar08 Updates detail exposure to related parties. There was a monumental jump between Jun07 and Feb08.

Not only that – the Feb08 Update was the first to mention any debt.

Jun07 Update has a chart of growth of the fund. Looks like it peaked in June 07. Growth flatened after Dec06. Because of a drop in commissions perhaps?

In a letter to investors dated 10 Oct 2005, MFSIM CEO Steve Kyler reported that PIF "was awarded the Standard and Poor's 2005 Australian Mortgage Funds Sector Award and MFS Investment Management Limited was awarded runner up in the 2005 Boutique Fund Manager of the Year category in August 2005".

On 23 Jun 06 MFSIM held a Special General Meeting to vote on changes to the constitution. I have a copy of the memorandum. Classic give and take stuff.

Resolution 1: MFSIM's fee changed from fixed fee of 1% of gross assets to "all surplus funds (if any)" "after all distributions, expenses and redemptions of the Fund have been satisfied". Woohoo ... so PIF didn't have to pay MFSIM anything if it doesn't perform. Sounded great but PIF lost the benefit of large surpluses for smoothing out the bumps. But the support facility was introduced as well so all seemed fine. PIF was looking more like a bank's term deposit.

Resolution 2: The kicker. 180 and 360 redemption period introduced.

D'oh. Should have been more suspicious - but the S&P rating was very recent and soooooo reassuring.

Resolution 2 came in handy for MFSIM less than 18 months later. Spectacular timing? Or did they know something?

 

[BH1]

Re: Octaviar MFS Premium Income Fund PIF

Evening everyone,I'm not much of a one for chat sites,a bit slow typing and not one with the 'gift of the gab.'Contacted Breaker to lend support for the OCV mess,I'm not sure if it's all the same,I bought MFS/OCV shares but everyone seems to be posting about the Premium Income Fund.I'm kind of resigned to the fact that I've lost that money(nothing unusual for me,lose more than I make)anyway hope we all get something back,It's very sad for those who were believers and put big money and their retirement money in,GOOD LUCK with the fight,
BH1Love this smiley

 

[Tuart]

Re: Octaviar MFS Premium Income Fund PIF

Good morning everyone

Theres seems to be a common worry that should OCV fallover it could have an impact on PIF assets.

If an administrator or liquidator is appointed to OCV this person deals with the assets of OCV.

These assets include all of the shares in Octavia Investment Management Ltd which holds the license and is the manager of PIF. His role and rights do not extend to dealing with PIF assets.

As long as OIML has its own source of funding it continues as a going concern with its own set of directors and runs its day to day business. Even if OIML is forced into admin this i only a trigger to replace RE.

If OIML has any debts to the parent then the adminstrator has the right to pursue this. He has the right to sell the asset (shares in OIML) however Wellington has an option to buy these shares.

There is no direct impact on PIF from OCV falling into receivership.

The consequences are a flowon:
1) OIML on behalf of PIF is an unsecured creditor for the $50 million guarantee.
2) IF PIF has provided a loan to a development that OCV is a party to in a JV then if OCV interest is sold the impact on PIF comes down to its security and where it ranks as a creditor in each joint venture.

The PIF risk is not from the OCV creditors as it is a seperate legal entity.

Its risk is from the fact that the Royal Bank of Scotland has a first charge over all of the assets of the fund and can if it wants appoint a receiver into the fund.

They would be driving assets sales and taking all of the cash.

Until a new banker is put in place or enough assets sales are made to clear debt PIF principle risk is the bank.

Again the question has to be asked asto why alternatives were not considered to do a deal with parties with the ability to replace banking facility so continued fire sales do not take place.

That is history and like the issues that Jadel has pointed out are all potential legal issues that could give rise action.

However lawyers picking over a carcus does not get investors income which must be the primary focus of this group. Getting distributions reinstated followed by putting in the best strategy to protect and maximise the value of the assets that remain must be the primary focus as what is best for the collective group and must be pursued.

 

[Tuart]

Re: Octaviar MFS Premium Income Fund PIF

In answer to another issue raised on this forum is the redemptions for extreme circustances.

There are many many horror stories that are coming out of the freezing of the PIF.

The problem is that on just two of the deals done (GEO and LLA) a loss is been suffered in asset sales. We have not been told of the losses suffered from any other sale or write off faced.

Investors unfortunately have to face up to the fact that you are facing a capital loss the magnitude is yet to be disclosed.

So if any investor is paid out at $1.00 then his/her share of the loss would be collectively born by those that remain. The hole would get deaper for remaining investors.

THis issue is a curly one but there is not point hiding from the truth

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

breaker 1

Just found the reference to Lonsec assessment of the PIF - it was in the Business Spectator 31 March 2008 (abstracted from a AFR article) -


Lonsec estimates that investors in MFS Premium Income Fund may recover $A0.95 per dollar. Capital losses could be posted by around 11,000 investors in the frozen fund. It is thought that Royal Bank of Scotland has granted the $A770 million Australian fund a one-month extension on its $A184 million loan. Michael Hiscock, a director of Avenue Capital Management, recently stepped down from the board of MFS, soon to be renamed Octaviar. Simon Clifford, a director of Avenue, denies that the dealer group has links with MFS. Litigation funder IMF (Australia) suggests that class actions may be lodged against MFS

Distributed by News Bites. © Lexis-Nexis

 

[marcom]

Re: Octaviar MFS Premium Income Fund PIF

Scott francis

You and other PIF investors may be interestd in what MFS was saying to financial advisors in February 2008. Particularly look at the section on related party transactions. It may be important if Octaviar has changed their story since this statement. This is still on the Octaviar website in the pages for financial advisors.