asic scores victory in battle with wellington

ASIC scores victory in battle with Wellington Capital

by: ANDREW MAIN
From: The Australian
June 11, 2013 12:00AM

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THE long-running legal battle between Wellington Capital and the Australian Securities & Investments Commission over the Brisbane group's actions as responsible entity for the Premium Income Fund has taken another turn, with an apparent win for the regulator.

In April ASIC revealed that it would not be pursuing Wellington over an episode in June 2011 when 200 movie extras turned up at a Sydney meeting to help keep Wellington in its role.

But ASIC is still pursuing Wellington, managed by Brisbane lawyer Jenny Hutson, over a deal the company did in September last year to transfer $91 million, or 41 per cent of the Premium Income Fund's assets, to a special listed vehicle called Asset Resolution.

The Premium Income Fund is a relic of the MFS group, now called Octaviar.

Wellington was voted in as responsible entity for the Premium Income Fund in August 2008 after the MFS collapse. Since then it has been in a running battle with the regulator and a group of unhappy unitholders, the PIF Action Group, which has been trying to have Wellington replaced as RE.

On Friday ASIC launched an action against Wellington, alleging that five resolutions it had put in the notice of meeting for PIF scheduled for June 14 would be in breach of the Corporations Act.

Ms Hutson admitted defeat on that issue, for the time being at least, after a PIF unitholders' meeting last week. She told the Gold Coast Bulletin that Wellington would not contest the ASIC move to effectively axe the meeting, which was adjourned to June 14, although she called it an "extraordinary intervention into the rights of unitholders".

One of the main resolutions was to wind up the PIF. The other was for Wellington to retire as responsible entity of the PIF.

The regulator announced on Friday that "ASIC is concerned that one of the resolutions, seeking to implement a compulsory buyback of all issued units of the PIF in exchange for shares in Asset Resolution, required Wellington to issue a prospectus". That has not happened.

The ASIC announcement that it would appeal to the Federal Court to prevent the resolutions being put against the notice of meeting stated that neither of the proposals was in accordance with the Corporations Act or the constitution of the PIF.

Charles Hodges, a retired NSW detective chief superintendent who is a spokesman for the PIF, told The Australian yesterday that "Wellington Capital appeared to be trying to close down the PIF without going through the proper procedure as prescribed by the Corporations Act".
http://www.theaustralian.com.au/business/financial-services/asic-scores-victory-in-battle-with-wellington-capital/story-fn91wd6x-1226661463833