MFS fund freeze strands investors Font Size: Decrease Increase...

MFS fund freeze strands investors Font Size: Decrease Increase Print Page: Print Fiona Cameron | March 13, 2008

INVESTOR anger is rising over the failure of the frozen $770 million MFS Premium Income Fund to pay distributions that were due on Monday.

The company did not notify investors - many of whom rely on the monthly interest payments for living expenses - that they would not be paid. Redemptions in the fund were frozen on January 30 but no announcements have been made about distributions being withheld.

In a February 19 letter, Guy Hutchings, the chief executive of the responsible entity MFS Investment Management Ltd, told investors: "MFSIM expects that all unit-holders should continue to receive distributions at the relevant Target Rates of Return." But the next distribution - normally paid on the 10th of the month and covering the previous calendar month's earnings - was not paid.

Cairns pensioner Nigel Fiddes, 72, said he relied on monthly payments from the $35,000 he had invested in the fund for day-to-day expenses.

He was one of the earliest investors with MFS, having first invested with the group in 2001.