Wellington Capital PIF/Octaviar (MFS) PIF

Article entitled "Mortgage funds still doing it tough" in the Weekend Australian Financial Review March 20-21, 2010 with Jenny in the red leather jacket (looks like a file photo, but I was hoping that red leather jacket was gone!).

The last paragraph could have given an accurate description of the status of the PIF but the journalist took the soft option, ie "The former MFS fund trades on the Newcastle Stock Exchange but exiting investors face heavy losses, with the stock trading at a discount to net asset backing." (Words in Bold my emphasis.) That doesn't tell half the story! See attached article.

Cookie1 said:

Article entitled "Mortgage funds still doing it tough" in the Weekend Australian Financial Review March 20-21, 2010 with Jenny in the red leather jacket (looks like a file photo, but I was hoping that red leather jacket was gone!).

The last paragraph could have given an accurate description of the status of the PIF but the journalist took the soft option, ie "The former MFS fund trades on the Newcastle Stock Exchange but exiting investors face heavy losses, with the stock trading at a discount to net asset backing." (Words in Bold my emphasis.) That doesn't tell half the story! See attached article.

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Hi Cookie and all, I have been away from computer access and am extremely disturbed to be confronted by the latest Wellington Capital pathetic efforts!! Add to that the lack of response to key questions asked which remain ignored/unacknowledged. It is obvious our current RE is not only grossly incompetent and are never going to live up to their previous promises but they also lack the backbone to actually 'get in the arena and admit defeat and declare the battle lost'. Your horse has bolted WC and the only thing left is a very deep feed trough which is being filled at the expense of thousands of investors that actually will never forgive WC for not only failing to deliver on previous promises but refuse to admit defeat and continue to milk the cash cow for every last cent they can get to prop up a failed RE.

I seriously question your ability to be in the capacity of a RE of any fund, you will not answer fund related questions honestly, you do not deliver fund updates when promised and even when they are delivered, they are full of cut and pasted bullsh!t, often unrelated to our PIF issues. You spend millions of dollars of investors money on legal representation which delivers no real results, you fail to reveal the true state of the fund. Actually WC, you appear to be a liability to this fund and I cannot believe ASIC has not intervened on investors behalf in view of all the documented evidence produced by many in regard to Wellington Capital mismanagement of the Premium Income Fund.



Ok, so all, I have vented that lot just to let you know I am back in range and pissed off more than ever with WC and will foward another complaint to WC and ASIC.

Is there any where we we can nominate the worst business person of the year on the failure to produce anything remotely like we were promised?

Also check out the pic of our illustrious leader in this link four years earlier as opposed to Cookies above link, where have the years gone Jenny? At this rate you should maybe bail now?
http://www.dailyexaminer.com.au/story/2006/05/05/apn-shes-still-jenny-from-the/

Seamisty

marcom said:

Maybe some good news! From the Bentley's Insolvency site:
http://www.bentleys.com.au/our_services/business___corporate_recovery_and_insolvency/creditor_info_

March 2010 activity re Octaviar Liquidation

* Meeting of Committee of Inspection members held on 9 March 2010
* Notice to priority creditors of intention to declare a dividend* was sent on 5 March 2010 and the distribution will be made on or before 14 May 2010


Not sure if PIF is a "priority creditor". The only secured creditor at present is Fortress Credit Corp, but that is under appeal to the High Court in June by the Public Trustee of Queensland.

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See http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Insolvency_glossary.pdf/$file/Insolvency_glossary.pdf

My guess: priority creditor dividends will go to Bentleys (to cover costs but maybe also to pay all of Bentley's fees) and maybe also to former OCV employees. That's 2 very big maybe-s.

The fact that an AGM is not in the constitution means that we don't have a venue to meet annually with the RE. How about finally calling for an EGM?

An interesting development in the ASIC case against MFS Directors: http://www.courts.qld.gov.au/esearc...eNumber=12122/09&Court=Supreme&Location=BRISB

The last event was 25/02/2010 Consent Adjournment of Application Lodged by the Applicant (ASIC).

Now this latest event - 18/03/2010 Notice of Change of Solicitors OCTAVIAR Filed on behalf of the Respondent.

There had been no listing of solicitors for the Octaviar entities, now a change of Solicitors?

Thanks Marcom. That QCA costs decision made for enjoyable reading. Still - what a waste of time and money.

The High Court (HC) decision to grant leave is at http://www.austlii.edu.au/au/other/HCATrans/2010/49.html

The Respondent's representative said:
"MR JACKSON: ... What it also shows is that the decision of the primary judge went against an interpretation of the provisions of the Corporations Act which had been adopted for quite a long time, that there is a part of the material which is in those passages, some of it reasoned, regarded the primary judge’s decision as erroneous. None of the material, your Honours, actually supports the primary judge’s reasoning, although it recognised, of course, that it had to be respected, but the decision of the Court of Appeal was regarded as expeditiously and properly putting down the heresy created by the judgment at first instance. Your Honour, I do not want to provoke the Court by those words, but that is what I seek to note." [emphasis added]

He went on to quote their own submissions "Market upheaval followed the handing down of the first instance decision. Principles emerging from that decision brought into question decades of market practice"

The HC wasn't pursuaded. I can only guess as to why. A commentator believes it's because of the inconsistency in the reasoning between the appeal judges. Hmmm. Perhaps that was a trigger but I'd like to think the Fortress submission stirred a Socratic spirit in the HC.

Looks like the industry is not happy about having to take a dose of HC judicial review.

Capital Gains

Just for information, I spoke to the ATO this morning about this fund and the PFMF in relation to CGT. I didn't make a written request, so all I got was a verbal answer.

It seems that your fund was 'resettled' and as such, you all suffered a capital loss of ($($1.00 - NTA at the moment of listing) * number of units held).

So, if anyone wasn't aware of it, and you're paid some CGT between the date of listing the fund and now, then you're up for a refund.

I guess one way to minimize one's capital losses in the PIF is to go out and buy some real estate (if one is able to) - hopefully pay incur a profit on which you will be able to offset your loss. Remember you have 5 years, and a couple of so years have already ticked by.

If it affects anyone, then those affected should contact their respective accountants or the ATO for advice.

mellifuous said:

Capital Gains

Just for information, I spoke to the ATO this morning about this fund and the PFMF in relation to CGT. I didn't make a written request, so all I got was a verbal answer.

It seems that your fund was 'resettled' and as such, you all suffered a capital loss of ($($1.00 - NTA at the moment of listing) * number of units held).

So, if anyone wasn't aware of it, and you're paid some CGT between the date of listing the fund and now, then you're up for a refund.

I guess one way to minimize one's capital losses in the PIF is to go out and buy some real estate (if one is able to) - hopefully pay incur a profit on which you will be able to offset your loss. Remember you have 5 years, and a couple of so years have already ticked by.

If it affects anyone, then those affected should contact their respective accountants or the ATO for advice.

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The ATO officer said a trust has been 'resettled' if the ABN is different after an 'event', your fund retains the same ABN, before and after the listing.

I'll leave the issue of CGT losses in your fund with anyone who has an interest about it.

Here are some helpful links:-

http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20064/NAT/ATO/00001

http://www.ato.gov.au/businesses/content.asp?doc=/content/14283.htm&page=5&H5

"... 4. General principles
In the ATO’s view both the stamp duty and estate duty cases indicate that a new trust arises when there is a fundamental change to the trust relationship. It is a change in the essential nature and character of the original trust relationship which creates a new trust. This may mean that the original trust ceases to exist, and a new trust arises. Alternatively, a new trust may arise which exists independently of the original trust.

Changes potentially leading to a new trust can arise by several means, including variations under a power in the deed and a variation by agreement among the beneficiaries. Listed below are some of the changes which raise the question of whether a new trust has been created.

any change in beneficial interests in trust property;
a new class of beneficial interest (whether introduced or altered);
a possible redefinition of the beneficiary class;
changes in the terms of the trust or the rights or obligations of the trustee;
changes in the nature or features of trust property;
additions of property which could amount to a new and separate settlement;
depletion of the trust property;
a change in the termination date of the trust;
a change to the trust that is not contemplated by the terms of the original trust;
a change in the essential nature and purpose of the trust; and/or
a merger of two or more trusts or a splitting of a trust into two or more trusts.
Depending on their nature and extent, and their combination with other indicia, these changes may amount to a mere variation of a continuing trust, or alternatively to a fundamental change in the essential nature and character of the trust relationship. In this second case, the original trust is brought to an end and/or a new trust created.

Whether a new trust is created will depend, among other things, on the terms of the original trust, and on the powers of the trustee. The original intentions of the settlor must be considered in determining whether a new trust has been created. There may be different trigger points/tests for different types of trusts.

The answer to whether alterations to trusts, taken together, result in terminations and creations of trust estates will generally flow from establishing whether the essential nature and character of the original trust relationship has fundamentally changed. Nothing that the High Court said in the Commercial Nominees of Australia Limited case is contrary to the principles stated here in relation to trusts generally. ..."

interesting article in today's Sydney Morning Herald. Discusses liquidators' public hearings, ASIC and also touches on auditors such as KPMG.

http://www.smh.com.au/business/a-wander-through-the-allco-maze-of-privilege-20100322-qr7d.html

Here's another interesting article in the SMH re Allco's Rubicon deal ("Backlash over Rubicon deal") just before the collapse.

http://www.smh.com.au/business/backlash-over-rubicon-deal-20100322-qr71.html

selciper said:

interesting article in today's Sydney Morning Herald. Discusses liquidators' public hearings, ASIC and also touches on auditors such as KPMG.

http://www.smh.com.au/business/a-wander-through-the-allco-maze-of-privilege-20100322-qr7d.html

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That's more than interesting, selciper.
The journalist really puts his finger on the pulse.
I am stumped by this passage:
"And those involved have been carefully schooled in how to ensure it stays that way.
By preceding every sentence with ''privilege'', whatever is said under oath in court room 18D can never be used in evidence."
Hope Carney's are devising strategies to dis"privilege" this loophole.
Regards,

Not recommended;
In Germany, some very angry senior citizens kidnapped their financial adviser, a grievance for losses, and kept him hostage for ransom.
He was allowed to email to bank for funds release, but instead he emailed for "Help!"
Some kidnappers got years in jail, their spouses got off with less.

simgrund said:

Not recommended;
In Germany, some very angry senior citizens kidnapped their financial adviser, a grievance for losses, and kept him hostage for ransom.
He was allowed to email to bank for funds release, but instead he emailed for "Help!"
Some kidnappers got years in jail, their spouses got off with less.

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........ Oh, does that mean I should let her go???

JohnH said:

........ Oh, does that mean I should let her go???

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JohnH I heard a rumour that a PIF investor was so distraught when he found out that WC did not foward to them a distribution they were entitled to from a previous OCV entity that WC took control of, which left them so financially and emotionally crippled they made a complaint to WC that resulted in a incarceration instigated by WC!! I sincerely hope this is just that, a rumour, because 10,000 plus investors in the Premium Income Fund are not happy!! Why would they be? Empty promises are not going to be pacified by a one of 3 cent return of capital (at least 17 months after we were promised much more which is the only reason we are stuck with WC as a RE) to PIF investors in the event it happens which will entitle WC to draw down management fees !! We will be well and truly stuffed if this happens, look where we are unit value wise 12 months after the Fund was meant to have been stabilised.

I find it difficult to sleep of a night and I have a clear conscience.

Seamisty

http://www.goldcoast.com.au/article/2010/03/25/201561_gold-coast-business.html
ELS-Payce union was child's play
Extracted from the above article

'His former S8 chairman, Ms Hutson, takes over from Tony Hartnell as ELS chairman, while another key S8 figure, Craig Chapman, will become chief executive.

Mr Chapman replaces youthful director Chris Sacre who will return to the role of chief financial officer.

"I'm really excited about being back in business with Chris Scott and I'm really excited about what this means for Queensland and the Gold Coast," said Ms Hutson.'

Add to that the appartently pathetic efforts by Hutson and Co. to market our properties. See my post #5367 regarding the Kooralbyn Hotel Resort which owes us $40million.

If it is our investment, then that Jones Lang LaSalle online listing is so dismal I'm wondering if someone is deliberately trying to sabotage the sale. For what reason - I don't know. A school kid year old could select and then take better quality and more inspiring photos than that. Those photos are THE lowest possible quality.

"I'm really excited about being back in business with Chris Scott and I'm really excited about what this means for Queensland and the Gold Coast," said Ms Hutson.' (Gold Coast Bulletin 25/3) How many more facile statements such as this do we PIF investors have to endure? It's quite insulting to us considering our plight.

Duped said:

Add to that the appartently pathetic efforts by Hutson and Co. to market our properties. See my post #5367 regarding the Kooralbyn Hotel Resort which owes us $40million.

If it is our investment, then that Jones Lang LaSalle online listing is so dismal I'm wondering if someone is deliberately trying to sabotage the sale. For what reason - I don't know. A school kid year old could select and then take better quality and more inspiring photos than that. Those photos are THE lowest possible quality.

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PRIVLEDGE!!!!Yes Duped, and is that why the PIF are paying Wellington Capital as our 'current Responsible Entity' ongoing expenses/costs? Isn't it their job to oversee the marketing of our assets? We have been told they will not be firesaled (cough cough, choke choke) we are still suffering severe asset impairments!! Err, one would have to ask just what WC are doing to justify those huge 'operating expenses', I mean, who is actually out there with those paint brushes (refer 'bootsnAall' post 5376) slapping away six or seven times in the past year to eliminate grafitti??? Is this another example of our prime assets being held by WC to participate in the huge growth potential that is going to help return our unit value to $1.00 in the next, Oh My God, how time flies WC, the 3-5 year time frame is looming!!! Lots of ground to make up, the unit value has deteriorated more than 10 cents under Wellington Capitals control!!



::Reputation

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

Our growth has been fuelled by strong, long standing relationships which have been built on trust, a commitment to delivering commercial advice and focusing on helping clients achieve their long term corporate and growth aspirations. Wellington Capital has significant contacts within leading financial institutions and across the property and funds management sectors.::

Err, what growth can I ask? And, Trust?? That could well be a big issue with 10,000 plus PIF investors who took WC on their word and promises when they
gave their support to elect them to take this Fund forward.


Where do we stand legally with 'breech of promise' in the business world? Is there such a thing? Who is held accountable when not only pre election promises are not met but investors suffer financial detriment as well?? I am sure someone (or many?)must be held accountable for the current status of this Fund.

While this issue seems to be floating in limbo indefinitely and PIF unit holders are giving up and writing off their investment, there are still individuals that want answers AND WILL NOT REST UNTIL THEY GET THEM!!!


Do not forget that IMF have another current class action on behalf of OCV shareholders. I am sure that the Public trustee of Qld are not the only ones looking at the aquisition of the PIF by WC (who I have been told was acting
for Chris Scott)

Quote from one of the supposedly 25 interested groups::
"I am happy to provide any detail of our proposal.

I was actually sending copies of the proposals to Wellington Capital as well during the time they acted for Chris Scott.

I have emails from OCV and Jenny Hutson herself acknowledging receipt of proposal.

I was told by Louise Edwards of OCV that I was one of 25 parties who had expressed an interest. We couldnt even get in the door so know wonder no one got close to doing DD."


Well,what more can I say? The evidence is there, complaints have been made to everyone remotely connected and responsible for the Fund, it is all on record and is not going to go away.

A law degree, university education, or anything else is not going to indemnify anyone from the truth as to where this Fund is at and how it achieved its current status. Mismanagement comes in many forms and the information provided from strong investor support will highlight the wrongs and bring attention to those that ignored those warnings and failed to act!! We must eventually be heard!!!

On another subject, The Gold Coast Bulletin. Selective reporting at its best.

http://www.goldcoast.com.au/article/2009/11/20/160381_gold-coast-business.html
Qoute
'The fund's units surged 21 per cent yesterday to close at 19.5c, after wallowing for the past year at just above 10c.'


Well hello!! The unit price on the NSX is wallowing around the 0.86 cents, and this is with the 'imminent prospect of a 3 cent cash payment'

Meanwhile the unit value quoted by WC in the last financial report is approx 35 cents. 10cents less from when they took control of the Fund!!

Conspicuous by your absence Mr Nichols in reporting Wellington Capitals failure to maintain unit value and possible unliklihood to restore it to promised initial investment in 3-5years!! PIF investors consider it in our interests for the GCB to impartially follow up on previous Fund related issues .I personally find it insulting for your selective style of reporting, considering the information available to you to represent a considerable body or PIF unit holders.


What chance have we got relying on ASIC to intervene on our behalf when they get ticked of by a judge for tardinous?
http://www.heraldsun.com.au/business/banker-asic-cop-it-from-judge/story-e6frfh4f-1225845279763

Its nearly two years since PIF investors have provided ASIC with comprehensive relevant information to our Fund regarding the previous and current conduct of our directors and we still suffer financial losses. Thanks to all those that keep a record of complaints lodged and other Fund related information.
Seamisty

On this forum over the past year there have been occasional calls for an EGM to be convened. As communications with WC are at an all-time low, an EGM would oblige the RE to stand on a platform and face a barrage of pertinent questions from investors. Without an EGM being called soon, we will continue to swap opinions and research material amongst ourselves for months to come. And we’ll carry on complaining to the ever-tardy ASIC. The CA will also be a slow process to reckon with. What is the argument against calling for an EGM?

Auditor to be sued by OZ Minerals
http://www.smh.com.au/business/auditor-to-be-sued-by-oz-minerals-20100326-r34e.html
ELISABETH SEXTON in SMH
March 27, 2010

OZ Minerals will sue its auditor, KPMG, as part of its defence to a shareholder class action over how it disclosed its borrowings in 2008.

The company told the Federal Court yesterday it intended to file a cross-claim against the accounting firm so it could claim a contribution from KPMG if ordered to pay compensation to the investors. Justice Arthur Emmett set aside time on April 30 to hear argument on legal procedural issues relating to joining KPMG to the case.

The firm said yesterday: ''It is not appropriate for KPMG to provide commentary on matters … before the courts involving our client, OZ Minerals.''

No date has been set for the main hearing of the class action, which was launched in October by the law firm Maurice Blackburn with funding from IMF (Australia). Maurice Blackburn alleges OZ Minerals disclosed too late that two loan facilities under which it had drawn down $US560 million were due for imminent repayment.

The company requested a trading halt on November 28, 2008, saying it had ''undertaken to re-finance both facilities by November 30, 2008'' and was trying to renegotiate with its lenders.

The shareholders allege the market was misinformed about whether OZ Minerals' debts were current or non-current from the date its half-year report was released - August 21, 2008 - until the trading halt announcement. They claim the half-year report understated current liabilities - those due for repayment within a year - by $320 million.

The report was reviewed but not audited by KPMG, which said it gave a true and fair view of the group's financial position as at June 30, 2008.

OZ Minerals has repeatedly stated it ''absolutely refutes any assertion or allegation it has engaged in misleading or deceptive conduct or has in any other way acted other than in compliance with the Corporations Act, the ASX Listing Rules or other than in the best interests of its shareholders''.

As is common in class actions, Maurice Blackburn has not yet quantified the damages its clients are seeking. When it first agreed to provide funding in December 2008, IMF said the claim could be worth $50 million but might ''vary significantly from this amount''.

KPMG is the second large accounting firm to be drawn into a shareholder class action over the classification of debt during the global financial crisis.

Centro Properties and Centro Retail filed a cross-claim against PricewaterhouseCoopers in May over two class-action claims brought by Maurice Blackburn and Slater & Gordon. PwC is defending the cross-claim.