"A CITIGROUP subsidiary has filed lawsuits against the current and former chief executive of stricken financier and funds manager MFS seeking to claw back more than $835,000 in margin loans.
Citigroup Global Markets Australia hopes to wind up current CEO Craig White's $1 company C&P White Investments Pty Ltd at a hearing on April 9 in the Brisbane Supreme Court.
Mr White, who took the helm following the resignation of Michael King in January, allegedly owes $356,390 from the "flexible investment facility" he secured in April last year, according to Supreme Court documents.
The most recent MFS annual report shows that Mr White owns 262,883 shares, with all but 15,000 acquired in the last financial year. Mr White declined to say yesterday if he would defend the case or if he was strapped for cash.
"I have margin loans against MFS shares like a lot of other people and my margin lender isn't prepared to wait around and I obviously don't have $350,000 sitting in my bank account," said Mr White, who is building a $1 million-plus home at Mt Gravatt, in suburban Brisbane.
Citigroup is also chasing Mr King for $478,816 from a floating rate loan of up to $2.5 million allegedly made in April 2005. Mr King has 32.48 million shares, or 6.9 per cent of the issued capital.
MFS shares remain in a trading halt after a failed bid to restructure the company resulted in a near 70 per cent price plunge to just 99¢ on January 18. Since then, the company has frozen its biggest fund and started a fire sale of assets to relieve a huge debt burden.
Citigroup said it issued a margin call to Mr King on the day of the share dive because the stock had fallen far below the trigger price, believed to be $1.80. Mr King has not filed a defence and did not return calls yesterday.
Since stepping down on January 21, Mr King has gone to ground at his $20 million Elysian Fields Polo Estate near Canungra in the Gold Coast hinterland. He earned more than $3 million last year, including a $1.6 million cash bonus."
OCV Price at posting:
99.0¢ Sentiment: None Disclosure: Held
