Lisa Allen; Property & Tourism Reporter; Sydney, March 2015...

Lisa Allen; Property & Tourism Reporter; Sydney, March 2015
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Auditing and accounting giant KPMG has settled a long-running class action for up to $30 million
— enabling thousands of retiree unitholders, mainly from NSW and southeast Queensland,
to reap 1.5c per unit down from their $1 purchase price.
Some of the more than 10,000 unitholders in the Premium Income Fund were involved
in the class action against KPMG, which acted as compliance auditor for the fund that
invested heavily in real estate during the 2006 real estate boom.
PIF is an offshoot of Gold Coast-based finance, property and tourism group MFS,
also known as Octaviar, which collapsed in 2008 owing investors billions of dollars.
Federal Court judge Nye Perram said in the judgment, handed down late on Friday,
that KPMG would probably have won the case if it had gone to trial, but sources said
the class action had put the accountancy firm under enormous pressure in the past five years
and it wanted to mitigate any further damage.
“The proceedings were most likely to end in a heavy defeat,” Justice Perram said.
“Far from being not enough, the settlement was as good as it was going to get.”

The unitholders brought the class action against KPMG over its role in auditing
the Premium Income Fund’s compliance plan.
The judgment found that PIF entered into a large number of loss-making transactions
which were not in accordance with the compliance plan.
“The most prominent allegation is that the auditor failed to detect that a number of the
loss-making transactions were with related parties.”

PIF’s manager, Wellington Capital managing director Jenny Hutson, said yesterday
she was happy with the outcome of the long-running class action.
“We are pleased for the 2008 unitholders that we have achieved what the judge said
was the best possible outcome,” said Ms Hutson, who took over PIF in October 2008.
Under the terms of the settlement, KPMG agreed to pay $7.871mn in fees to lawyers,
including Johnson Winter Slatter and Carneys. Litigation funder Bentham IMF
will take up to $10m of the settlement while unitholders will take the balance.

KPMG declined to comment last night.
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And Lisa,  TERMS OF THE SETTLEMENT WERE TO REMAIN CONFIDENTIAL!
Please explain the nature of you gaining this privilege of DISCLOSURE.


  Cheers it ain't,