Wellington Capital PIF/Octaviar (MFS) PIF

[ASICK]

...

HI Duped,

I can't speak to the facts you make comment on.

But looking to the decision in light of what you say, it seems to me to be akin to looking at an orange (external/exposed/public) on the one hand, and cutting open the orange to reveal the pith (internal/unexposed/private) on the other hand. We trust that a bright orange skin will enclose an unblemished fruit, but it is not always the case. The pith is the substance.

For example, if one misinforms/mispresents , then the truth remains the truth (as decided by a court), not the misinformation/misrepresentation. The truth is always the the sought after substance.

A court will not knowingly make a decision on the side of misinformation/ misrepresentation. So if a mispresentation was made (and I can't speak to that) then it would not provide the material to construct a 'wall of evidence' to support a case.

If one thing is agreed to privately and another thing said publicly by the parties (or by one of them) then the private agreement will bind the parties.

If investors suffered loss by a public misstatement (again, I don't know about the facts in this case), then it's a matter of looking for a remedy subject to law (if that is possible), but that has nothing to do with the private arrangements made between the parties.


..

 

[marcom]

More negative press comment on ASIC's pathetic performance.

ASIC fails to act as directors exploit loopholes
February 14, 2011 SMH Business Day

http://www.smh.com.au/business/asic-fails-to-act-as-directors-exploit-loopholes-20110213-1as47.html

"...There is a general perception among liquidators that ASIC has very little interest in cases under $10 million, unless there are a lot of complaints and high-profile parties or publicity involved.

ASIC vehemently denies this. The evidence suggests otherwise.

The latest annual report by ASIC shows that of the more than 9074 statutory reports filed by liquidators in the past year, 5748 allege suspicious activity and of those reports 761 are asked for supplementary reports with supporting evidence. Of those, a third, or 254 cases, result in some action.

To put it into perspective, 2.8 per cent of the statutory reports are followed up with compliance, investigation or surveillance; the rest become cold cases.

And therein lies the problem. Behind the numbers there are numerous cases of fraud or breaches of director duties that never get investigated or prosecuted. They end up being "analysed, assessed and recorded", which, for the Foxdales of this world, is a polite way of saying buried.

In ASIC's world, it is less bleak. In a briefing note to me, it said that in the 2009-10 year ASIC "significantly" increased the number of supplementary reports (33 per cent compared with 24 per cent in 2008-09) referred for compliance, investigation or surveillance or to assist with an existing investigation or surveillance.

When compared with the total number of statutory reports, this is an increase from 1.6 per cent to 2.8 per cent.

But the stats raise questions about how many other Foxdales there are waiting to be exhumed. As one liquidator said last week: "I write lots of reports to ASIC and they just get shelved."

Meanwhile, loopholes continue to be exploited in the regulatory system."

 

[Duped]

If one thing is agreed to privately and another thing said publicly by the parties (or by one of them) then the private agreement will bind the parties. ...

The YVE gaurantee was entered into almost on the same day as the security. It would be a brave justice to conclude that the two instruments were NOT considered together. Given that they are likely to be viewed by the market (the intended audience) as having been considered together then wouldn't you agree that this sends a clear signal to the market that the YVE is not intended to be secured? The opportunity to consider them together was certainly there. In fact, from my lay view, OCV and Fortress would have had to go out of their way to generate two instruments rather than just secure the YVE loan as well at the same time.

OCV then went on to disclose the YVE loan as unsecured in e.g. it's 2007 annual report (Note 33). I recall there was another debt update in 2007 or very early in 2008.

I have already written this all on this forum before but am happy to rehash for you. The relevant section of the Corporations Act grants the priviledge of a right of priority creditor in exchange for information regarding the nature of the loan. So that, in the HC's words (para 32 HCA10-029) "a person minded to search the register would be informed, ..., of the need to look elsewhere to ascertain the precise nature and details of the liability or libilities secured."

Well in this case, that research would have revealed that the YVE loan was not secured.

All Fortress then needed to do is apply the leverage of the secured loan to get its unsecured loans secured. Which is precisely what it ended up doing.

As I said, Fortress were front running this in-the-rough statute. Perfectly legal? And the High Court has rewarded Fortress for doing so. But in doing so the High Court has not applied tools available to it to come to an opposing conclusion. It has not served PIF investors well.

Furthermore, as early as the first week, law students are taught about purposive construction. The High Court has told us what the purpose of this legislation is. So then how does the High Court's decision help us "ascertain the precise nature and details of the liability or libilities secured"?

It does precisely the opposite. As an unsecured creditor you now (thanks to the HC decision) need to perform the very difficult task of ascertaining the relationship between the secured creditor and the other unsecured creditors. I.e. to determine how easy it is for your fellow unsecured creditors to jump up the priority list in front of you. Not so difficult in the present case but what if the YVE unsecured debtor's name didn't include the term 'Fortress' in it. The likely outcome is that unsecured creditors will now probably need to assume that fellow unsecured are for all intents and purposes secured. I.e. an unsecured creditor's position is now LESS certain than before this Octaviar decision. This can hardly have been the intent of the legislation. It is now more difficult to "ascertain the precise nature and details of the liability or libilities secured"

In fact, this new law should bring forth debt trading whereby a secured creditor can play unsecured debtors off against each other. I.e. a secured creditor could start a bidding war between unsecured creditors. The unsecured creditor that sells its debt to the secured creditor at the biggest discount doesn't get wiped out like the others.

This decision has likely changed Australia's debt markets. Frightening really. It's a case of trying to avoid legislating from the bench means that the court has possibly been tricked into legislated from the bench. And us Mum and Dad investors get sacrificed in the perpetual authority push and shove between the legislature and the judiciary. And the smart money plays off on this in its game of front running. And us retail investors pay for this silly game. Is that the role that the High Court sees itself as serving? Or does the High Court see this as the price we pay for the vote we cast? Or a necessary evil to keep us poor so we go to work everyday to make this country strong?

Anyway, that's my lay observer' view.

 

[ASICK]

... .

Thanks Duped. I was clearly out of my depth with the facts, so I found a judgment summary here:
http://www.hcourt.gov.au/assets/publications/judgment-summaries/2010/hca29-2010-09-01.pdf

Ok, I see what's happening. As I understand it, just how big a security net a charge will cast is now not able to be determined if a future unlodged 'transaction document' is captured by a pre-existing charge lodged with ASIC.

The whole issue seems to hinge on the need to lodge a 'notice of a charge or its variation' with ASIC (Corp. Act s. 266).

It seems that the later charge (YVE) need not be considered as a charge at all, but rather as a 'transaction document' relating to a pre-existing charge which does not necessitate amending the terms of that pre-existing charge.

Here's an example - Loan 1: A lends to B secured by a charge which includes the following term: "all money, obligations and liabilities…owing or payable…under or in relation to a Transaction Document". Loan 2: C lends to B secured by registered charge. Loan 3: A then lends to B and each of them agree that the document is a 'transaction document' but the charge is not registered.

Correct me if I'm wrong, but as I see it, Lender A/Loan 3 has a higher priority than Lender C:/Loan 2 even though the document ('charge') securing Loan 3 was not lodged with ASIC and the charge securing Loan 2 was lodged.

If I'm right, then the lender going in first sets the terms - any other lender has to look further than the notice - a new lender has to read the lodged security document word by word, otherwise the lodgement of a later security may offer no protection at all.

Unfortunately in the Ocv matter, the latter loan security was termed a 'transaction document' and therefore fell under the original charge lodged with ASIC. Fortress was entitled to recover with first priority.

 

[ASICK]

... .

I can't see the problem for unsecured lenders, but I can see the problem for lenders who thought they had priority when they otherwise might not have.

Yes, you're right, it seems to have given rise to a great deal of uncertainly rather than settling anything at all.

Clearly there's a need for legislative change.

 

[Duped]

ASICK. From my reading of the court decisions it's common practice to use the 'transaction document' structure. The court's even had a shot at this practice, calling it

I don't know anything about priorities where there is multiple secured creditors. Truth be told, I'm also unaware of any rules around the priorities amongst unsecured creditors. All I 'm going on is Jenny Hutson's presentation in mid 2008, whereby us unsecured creditors were all ranked equally (OPI, PTQ, PIF, Challenger and yes: the ATO).

OCV only had one secured creditor - Fortress. And the amount OCV owed to all those unsecured creditors was huge.

"I can't see the problem for unsecured lenders" - every lender needs to continually assess the borrower's financials to determine the riskiness of the lenders 'asset'. Right? A risk analysis would involving determining the likelihood of collapse AND determining how much would likely be recovered. Right? I.e. if there is a rush for the exits, how much would a lender expect to get back? The High Court's decision in Octaviar IMLO has changed the second part of that risk assesment. This HC decision has made it easier for an equally ranked unsecured creditor to suddenly become a secured creditor IMLO. In my lay casual observer view, the High Court changed the market's understanding of the law. And hence any legislative change needed would be for the purpose of rolling back the changes made to the practical application of the law when the High Court succumbed to Fortess' counsel's 'campaiging from chambers' and then, effectively, legislated from the bench.

While I support the theory that law should be clear and it's interpretation not twisted back and forth by mob rule, this decision went too far. It's Fortress that appears to have twisted the law's interpretation and hence made it inconsistent with the fundamental rule of 'purposive construction'. And the degree to which the law/accounting firms rallied against McMurdo's decision suggests to me that the High Court did possibly bend to the demands of the mob of practitioners. (Think about all that unbilled work the law/accounting firms would have had to do to unpick the incorrect advice they'd previously given). So who's in charge here, the legislature, the judiciary or .... the legal fraternity. The latter is sneaking their way into power without having to carry the accompanying obligations of a duty to the public. But I guess that's probably what happens when we let lawyers corporatise.

To lay me, this decision exposes failings in Australia's practical application of a Common Law system.

"but I can see the problem for lenders who thought they had priority when they otherwise might not have." This applies to secured and unsecured lenders alike. As explained above, the problem is for an unsecured creditor who may have though they had equal priority with other unsecured creditors when they otherwise might not have.

Anyway, that's just my lay casual observer view of the circumstances surrounding this case.

 

[ASICK]

ASICK. From my reading of the court decisions it's common practice to use the 'transaction document' structure. The court's even had a shot at this practice, calling it

I don't know anything about priorities where there is multiple secured creditors. Truth be told, I'm also unaware of any rules around the priorities amongst unsecured creditors. All I 'm going on is Jenny Hutson's presentation in mid 2008, whereby us unsecured creditors were all ranked equally (OPI, PTQ, PIF, Challenger and yes: the ATO).

OCV only had one secured creditor - Fortress. And the amount OCV owed to all those unsecured creditors was huge.

"I can't see the problem for unsecured lenders" - every lender needs to continually assess the borrower's financials to determine the riskiness of the lenders 'asset'. Right? A risk analysis would involving determining the likelihood of collapse AND determining how much would likely be recovered. Right? I.e. if there is a rush for the exits, how much would a lender expect to get back? The High Court's decision in Octaviar IMLO has changed the second part of that risk assesment. This HC decision has made it easier for an equally ranked unsecured creditor to suddenly become a secured creditor IMLO. In my lay casual observer view, the High Court changed the market's understanding of the law. And hence any legislative change needed would be for the purpose of rolling back the changes made to the practical application of the law when the High Court succumbed to Fortess' counsel's 'campaiging from chambers' and then, effectively, legislated from the bench.

While I support the theory that law should be clear and it's interpretation not twisted back and forth by mob rule, this decision went too far. It's Fortress that appears to have twisted the law's interpretation and hence made it inconsistent with the fundamental rule of 'purposive construction'. And the degree to which the law/accounting firms rallied against McMurdo's decision suggests to me that the High Court did possibly bend to the demands of the mob of practitioners. (Think about all that unbilled work the law/accounting firms would have had to do to unpick the incorrect advice they'd previously given). So who's in charge here, the legislature, the judiciary or .... the legal fraternity. The latter is sneaking their way into power without having to carry the accompanying obligations of a duty to the public. But I guess that's probably what happens when we let lawyers corporatise.

To lay me, this decision exposes failings in Australia's practical application of a Common Law system.

"but I can see the problem for lenders who thought they had priority when they otherwise might not have." This applies to secured and unsecured lenders alike. As explained above, the problem is for an unsecured creditor who may have though they had equal priority with other unsecured creditors when they otherwise might not have.

Anyway, that's just my lay casual observer view of the circumstances surrounding this case.

Thanks again Duped.

You said, "... OCV only had one secured creditor - Fortress. And the amount OCV owed to all those unsecured creditors was huge. ..." and went on to decry my comment that I didn't see a problem with unsecured lenders.

I understand the law is applied equally to secured and unsecured lenders, but to be honest, I wasn't thinking so much about 'lenders' but rather 'creditors' or those who transact on a regular basis and get caught out if an amount is owed when things go pear-shaped - I couldn't imagine where a lender would loan large amounts of money without adequate security. If we really sit down and think about it, the real problem is the jokers who run some of these managed funds.

To my mind, the PIF is where it is because of the directors of OCV, not the law per se. How else could such an outcome be achieved, that is, a large unsecured loan in such circumstances? Ocv always had control over events and it seems that it didn't figure the PIF's money as having any value. Nothing could have been a surprise to the directors of Ocv, but there were big surprises for investors in the PIF.

Which managing entity (arms-length or otherwise) would loan a large amount of money held on behalf of investors to another entity without adequate security? I would say if there are any such lenders around, then there'd be managers included within the large number of frozen managed funds languishing in limbo.

It is the behavior of the directors and managers that really is the problem, and it's a problem with comes about because of the incestuous corporate relations which allows directors/managers to move money about as if it was their own.

"... This HC decision has made it easier for an equally ranked unsecured creditor to suddenly become a secured creditor. ..." - The decision does not make an unsecured lender a secure lender with priority - the priority is either there or it is not.

Whether or not the term 'transaction document' has been kicking around for some time, the case turned on the fact that the loan in question was a 'tranactional document' relative to a registered charge.

Whether the loan was termed or publicized as 'unsecured' does not change the loan's legal nature as a secured loan. So, the loan didn't change from unsecured to secured, it was secured all the time.

Judge-made law is a fact of life - it comes about through judicial interpretion of legislation. If the legislators don't like the judicial interpretation, then its up to them to make legislative changes. Laws are enacted - judges interpret the laws - refinements may be made to the law: a cycle which might take some years.

"... As explained above, the problem is for an unsecured creditor who may have thought they had equal priority with other unsecured creditors when they otherwise might not have. ..." - yes, I agree, it is the upshot - but I'll bet such unsecured loans aren't in the portfolio of well-managed companies/managed funds/trusts (or even reasonably-well managed ones).

 

[Duped]

Sorry ASICK. I appreciate your participation but lost a large chunk of savings and am hence quite spirited. Quoting you and then countering your position is a practice I picked up from other posters. Please don't take offence.

You're quite right about this case having little to do with the management of PIF. And yes, there are other actions afoot regarding those matters.

But the consequences of this HC decision and the securitisation of the YVE loan on the 22 Jan 2008 means there's ~$54m less in the pot to be shared amongst the unsecured creditors. Unsecured creditors who would have made an assessment of the risk they were exposed to. The eleventh hour securitisation shifted this ~$54m to Fortress. And that affects how much we PIF investors get. (As well as how much the PTQ's note holders, OPI investors, Challenger's investors etc get.) Yes this particular case was brought by the Public Trustee of Queensland (PTQ) on behalf of the note holders (~$350m worth) but the outcome has affected all of OCV's unsecured creditors.

I agree with you that it is the behavior of the directors and managers that really is the problem. They did most of the damage. But that doesn't absolve the HC from it's responsibility to ensure that all purposive construction isn't interpreted out of a piece of legislation.

"the case turned on the fact that the loan in question was a 'tranactional document' relative to a registered charge" True. But it wasn't always a transactional document. The YVE loan started it's life as an unsecured liability on OCV Ltd in ~June 2007. And OCV communicated this clearly to the market. The liability was only made a 'transactional document' on 22 Jan 2008. The Corp Act even provides for variations so that the market can remain informed. As we know, the HC decided that the change in OCV's debt position on 22 January 2008 didn't require notification of variation. Hence by making the terminology of the registered document sufficiently broad and removing anything of substance, the value of the variations provisions is all but neutered if the debtor/creditor so choose.

The only other alternative then is for the minded person to ask the debtor directly for an update . If so, then what's the point of having a register of charges that requires companies to disclose any of the terms of charge. Just have a Yes/No register. Then anyone "minded to ... ascertain the precise nature and details of the liability or libilities secured" can just ask the company straight up without having to bother with a register whose content is entirely at the discretion of borrowers and lenders.

But hey, I'm open to the premise that the legislation (Part 2K?) only ever intended for the optional inclusion of any meaningful detail in the'terms of the charge'. In which case the HC probably hasn't changed the law at all. (I wonder if ASIC agrees) But if that's the case then why has the HC teased us with lobbing in ratio(?) like "AND any terms which may be implied in fact." Note the 'AND'.

It seems the HC has given the written documents absolute supremecy over any 'terms which may be implied in fact' without giving us a reason. (Is this a signal from the HC of where the PTQ's case was lacking?)

The ASIC webpage on Charges even indicates that it's parliament's intention that 'Charges created by other conduct' can be registered. I.e. this suggests that parliament gives similar weight to charges created by the conduct (actions) of the parties as to charges created by a written instrument. You just need to register to get the right of priority. Yet the HC decided that the 'January 2008 Deed' didn't need to be registered to get those rights, despite the similarly valued 'conduct' (i.e. actions) of the parties contradicting the January 2008 Deed. Why does the written instrument (i.e. the Deed) get supremecy over conduct when parliament seems to be giving similar value to either method of creating a charge. The conflict between the unregistered Deed and the Conduct has never been addressed. This is despite the HC announcing that it gives weight to 'terms implied in fact'.

The extensive ASIC's info sheet 'Don't Get Burned' makes no specific mention of secured charges over companies. http://www.asic.gov.au/asic/asic.nsf/byheadline/Don%27t+get+burned?opendocument.

The ASIC page on Charges makes no mention that 'meaningful detail' in 'terms of charges' is optional. http://www.asic.gov.au/asic/asic.nsf/byheadline/Charges?openDocument

I'd be very interested to see the Disclaimers/Published Info that gets sent to fee paying ASIC users of the National Names Index. My guess is that none of the ASIC published guidance warns consumers of the Register of Charges that 'meaningful detail' of terms of charges is optional

 

[ASICK]

...

Hi Duped.

No offence taken - my habit is to do likewise.

I empathise with you in respect of your losses - I've suffered likewise but probably to a greater extent.

I've concluded that an investment in an encumbered fund (or one able to be encumbered) is no more secure than an investment in a mezzanine fund. Holding first mortgages or even ownership in property is no guarantee of one's investment in circumstances where an external lender holds priority over that first mortgage or ownership.

These funds are called 'schemes' and for very good reasons - a scheme by the initiating manager entirely in the best interests of that manager. The deck was stacked from the very start.

It doesn't matter what happens now - the deed is done.

We've all learnt very expensive lessons - the trick now is to get as much as we can back and get on with our lives.

..

 

[Cookie1]

I don't know if anyone else was wondering, but I was very surprised that there was no mention made in the December 31 2010 Investor Update from Wellington Capital about the Icon Apartments in Port Macquarie. My husband and I stopped in to see the two real estate agents handling sales yesterday and asked for an update on the status of sales; we thought we'd share what we learned with others on this forum.

Both agents were quite willing to talk about the apartments, although I'm sure they would have preferred that we were potential buyers! We told them of our connection with the funding of the development.

Both agents said they were 50% sold, which is almost accurate. If two under contract settle in the next week or two as they expect, I guess that will be the 50%. The information we received was pretty much the same from both, but in comparing the Price Lists with apartments for sale/sold, there are some obvious discrepancies.

The one thing we learned, and which surprised/shocked us, is that 5 unsold apartments on the 3rd level and 2 penthouse apartments are being rented (6 & 12 month leases, most of which are 12-month). Those apartments are currently "unavailable" for sale. We were told that the QLD developer is "holding back some of the apartments and not releasing them to the market so the market doesn't get flooded and they can keep the prices up, rather than having to reduce prices. Apartments on Level 3 are renting for $550/week (RRP $825,000) and the penthouses for $600/week (RRP $1.2million). There is still one apartment available on Level 3 for rent. LJ Hooker's price list shows 1 x penthouse (401) sold, 402 and 405 rented with the rest available for sale. Ray White's price list shows Apts 401, 403 and 405 unavailable and 402, 404 and 406 for sale at $1.2million. Ray White shows all of Level 3 unavailable for sale and LJ Hooker shows 5 rented.

The real estate agents are, of course, getting commissions for managing the rentals, and Body Corporate fees also come out of the rent. (I'm assuming the developer gets some money as well, although I didn't ask the question.) The LJ Hooker & Ray White agencies deal directly with the Qld developer JH brought in so I was unable to learn if any money actually goes back to JH for the PIF. The rented apartments won't be able to be sold as "new" now that they've been lived in.

I've included a synopsis of the two price lists as a PDF file attachment (I can't figure out how to embed files into the text.

Cookie1
View attachment 41404

 

[breaker1]

another lot of messy sales!

good work Cookie

Yes, please do ring Wellington and find out if the rentals are coming back to the PIF

 

[marcom]

ASIC finally got one!

Fincorp founder faces jail
Leonie Lamont SMH
February 17, 2011

http://www.smh.com.au/business/fincorp-founder-faces-jail-20110216-1awla.html

WITHIN a year of establishing his glossy finance and property development company, Fincorp founder Eric Krecichwost was dishonestly using his position as a director to write cheques on the company accounts to benefit himself and family members.

Krecichwost faces a possible jail sentence, after a jury in the NSW District Court yesterday found him guilty of dishonestly using his position as a director to pay himself and his family millions in ''spotters fees''.

The decision was a much-needed win for the Australian Securities and Investments Commission, which brought the criminal charges following its investigation into the collapse of Fincorp.

The jury dealt with three chequing transactions orchestrated by Krecichwost - the payment of ''spotters fees'' to himself and members of his family, on September 1 and October 27, 2003. One cheque was for $1.98 million, while the other involved transfers of $900,000 from Fincorp into a related company, and then $825,000 from that company to another entity. The jury found him guilty on all three charges. Each offence carries a maximum sentence of five years in jail, and or a $220,000 fine.

Peter Hastings, QC, prosecuting, told the jury Krechichwost used a ''back-door'' method to distribute money from the group, as dividends and distributions could not legally be made as the developments had not made a profit.

The jury was not told that Fincorp collapsed in early 2007, owing investors $200 million.

Krecichwost remains on bail.

 

[selciper]

Anybody following the Bernie Madoff (USA) story can catch up on the latest via this link.

http://www.cnbc.com/id/41613193

 

[Duped]

ASIC finally got one!

Fincorp founder faces jail
Leonie Lamont SMH
February 17, 2011

http://www.smh.com.au/business/fincorp-founder-faces-jail-20110216-1awla.html

...
Peter Hastings, QC, prosecuting, told the jury Krechichwost used a ''back-door'' method to distribute money from the group, as dividends and distributions could not legally be made as the developments had not made a profit. ...

[emphasis added]

Effectively Fincorp tried to distribute money by disguising it as operating expenses. I.e. calling it 'spotters fees'. Probably all signed off by the auditor.

Is this what's happending to PIF? Distributing our money via operating expenses through the likes of the Jenny Hutson run 'Armstrong Registry Services'? Who's auditing all of PIF's legal expenses? Where's our money really going?

Investing money in Australian financial products really is very very risky. Perhaps it's a good thing for Singapore to get the ASX. PIF investors haven't been served very well by Australia's financial sector. Like the ASX allowed OCV Ltd to sell Stella without an EGM.

Brilliant research Cookie1. Thanks.

 

[selciper]

Cookies deft detective work again underlines the paucity of information to be garnered from Wellington. It’s time that Hutson submitted herself to a Q&A from the AG. She was very quick to criticise Peacock when MFS was imploding, wasn’t she?

 

[marcom]

ASIC wins case on appeal against Fortescue
18:10:00 18/02/2011 ABC AM

The full bench of the Federal Court has ruled that Fortescue Metals and its chief executive Andrew Forrest deceived investors in 2004. The corporate regulator argued that the company misled investors about agreements with Chinese investors to finance and build a port, mine and railway project in Western Australia.

http://www.abc.net.au/pm/content/2011/s3142917.htm

 

[selciper]

Transcript excerpt 7.30 Report, three years ago, 11.03.08

JENNIFER HUTSON, WELLINGTON CAPITAL: It is about bringing the general on the field of battle, who in this instance, is Andrew Peacock to account.

When Andrew took over as chair, the company was worth in excess of $2 billion. It last traded at less than $500 million. So, less than 25 per cent of that value. And corporate Australia has always been about accountability, as has political Australia.

--------

 

[seamisty]

Looks like ALF PIF are still hoping to get enough suckers on board their takeover offer as it has been further extended to 14 June 2011. They now have an interest of 0.28% of PIF units.
http://www.nsxa.com.au/ftp/news/021723706.PDF That NSX announcement was quickly followed no less than 11 mins later with one from WC recommending ::

REJECT FURTHER EXTENDED
TAKEOVER OFFER
FOR PREMIUM INCOME FUND UNITS MADE BY ALF PIF FINANCE LIMITED

http://www.nsxa.com.au/ftp/news/021723707.PDF
ALF PIF Finance Limited has lodged a Notice of Variation of Extension of its takeover offer, extending the
period of its bid from 28 February 2011 to 14 June 2011.
Managing Director Jenny Hutson said ‘The offer continues to be 0.1 redeemable preference shares and 0.05
ordinary shares in the Bidder for each unit in the Premium Income Fund. The shares offered are in a
Company with no trading history and less than $2000 in assets.
The offer is grossly inadequate. The proposal seeks to shift over $120 million in unitholders’ current value
to the Bidder’s current shareholders. The Wellington Capital board believes that the approach by the Bidder
remains opportunistic and is at a price that does not reflect in any way the current value of Premium Income
Fund units.’
Ability to withdraw previous acceptance
Acceptances totalling 2,097,721units have been received by the Bidder, making its total holding 0.28% of
the issued capital.
Unitholders who have previously accepted this Offer may withdraw their acceptance by giving notice to the
Bidder within one month. Unitholders who require assistance in withdrawing their acceptance can contact
the Wellington Hotline on 1300 854 885 (+617 3231 0000).

Unusual for Wellington Capital to be so on the ball!!! Well at least unithloders can withdraw their acceptance if they change their mind.

Seamisty

 

[k.smith]

What a terrible scenario...

Units are trading at around 20% of their "net asset backing" while investors, who originally invested in this (and other) funds at an entry and redemption price of $1.00 are at the mercy of having their voting interests compromised by the very different interests of units/votes acquired by the opportunistic bidder.


http://www.heraldsun.com.au/busines...n-on-hassle-free/story-e6frfh4f-1226007194816

''....THE corporate watchdog has managed to ban a company that deals with rookie investors from making unsolicited offers to shareholders of health insurer NIB Holdings....''

The ripple on effect of the "frozen fund" and the subsequent listing has not done us well... should we be further exposed to these "offers", which, imo, is detrimental to the interests of investors who remain in the fund ?

 

[seamisty]

What a terrible scenario...

Units are trading at around 20% of their "net asset backing" while investors, who originally invested in this (and other) funds at an entry and redemption price of $1.00 are at the mercy of having their voting interests compromised by the very different interests of units/votes acquired by the opportunistic bidder.


http://www.heraldsun.com.au/busines...n-on-hassle-free/story-e6frfh4f-1226007194816

''....THE corporate watchdog has managed to ban a company that deals with rookie investors from making unsolicited offers to shareholders of health insurer NIB Holdings....''

The ripple on effect of the "frozen fund" and the subsequent listing has not done us well... should we be further exposed to these "offers", which, imo, is detrimental to the interests of investors who remain in the fund ?

KSmith I heard recently that some of the substantial PIF unitholders had calls made to them from a person associated with 'distressed funds' on behalf of an interested 'client'. The offer was 0.66cents. Anyway, as far as I know ASIC was made aware of the details and no one took up the offer.

Seamisty