old but interesting

This turned up during a web search, however I don't know the author. If this information is accessible, how much is there still to be found, or am I the only one not privy to this subject matter?





Here’s an example of the way WC reported to unit holders the misappropriation of PIF money .

WC explains the loss of $85 million of PIF money in the follow manner:
$85 million went from the PIF to the Maximum Yield Fund (MYF). The MYF is another fund that was managed by MFS (and is now managed by Wellington Capital). WC state the MYF made a series of loans totalling $85 million but which are valued at $0.
Extract from the June 2008 PIF Annual financial report written by Wellington Capital states:
“The Octaviar Maximum Yield Fund has only three investments which have been valued as follows:
Q Deck (Qld) Pty Ltd: $30 mill, Fair Value $0
Octaviar Blue Sky Development Trust: $45 mill, Fair Value $0
Octaviar Pacific Finance Limited participation loan: $9.9 mill, Fair Value $0
Total $85,000 ( $85 mill ) with a Fair Value of $0”
The 2008 MYF Annual financial report written by WC states this money was invested in accordance with governing documents but that money was lost due to the credit crisis and the collapse of Octaviar:
Extract from the June 2008 MYF financial report written by Wellington Captial:
“the Fund invested unitholders’ fund’s in accordance with the governing documents of the Fund and the provisions of the Fund constitution.” …
“However, the turmoil in the financial markets and the impact on property valuations as a result of the world-wide credit crisis, together with the collapse of Octaviar Limited, has caused a substantial decline in the value of the Fund’s investment portfolio”…”The directors, with the assistance of external adviser, have endeavoured to assess the potential value of each of the Fund’s assets. This process has resulted in a decline of approximately $85 million in the assessed fair value of the Fund’s loan and investment portfolio, in the opinion of the directors.”


These statements by Wellington Capital are outrageous when you consider what really happened to this $85 million of PIF money.

On 30th Nov 2007, the Royal Bank of Scotland paid $150 million into the PIF’s Operating Account. This same day $130 million of PIF funds illegally went from PIF’s operating account to MFS Admin’s bank account. To hide this misappropriation of PIF money, MFS are alleged to have fudged the books to make it look like the PIF bought 85 million units in the MYF.
The ASIC Affidavit_Forbes_Octaviar_Filed 20091029 alleges:
“42. On 30 November 2007, MFSIM as Responsible Entity for PIF, paid $130 Million from PIF’s Operating Account to Commonwealth Bank account BSB xxx, number, which was held in the name of MFS Administration. The funds were transferred by electronic funds transfer by Pertpetual, at the written direction of xx and xx on behalf of MFSIM as Responsible Entity for PIF.”
The ASIC Affidavit_Forbes_Octaviar_Filed 20091029 alleges:
“On 6 Feb 2008 by email sent xx and xx at 18:34 hours that day, xx approved for use as a record of MFSIM a document which on it’s face appeared to be an Information Memorandum dated 23 November 2007 offereing information to potential investors in respect of Class A units in MYF, which offer was expressed to close on 31 January 2008.” (the False Documents)

The ASIC Affidavit_Forbes_Octaviar_Filed 20091029 alleges:
On or about 18 Feb 2008, Michael Skepper of MFSIM’s internal compliance unit (Compliance) raised a concern that s1017E of the Act had been breached because, although the records of MFSIM as RE forPIF showed an investment of $85 million into MYF by MFSIM as RE for PIF, no corresponding funds were received into MYF application account (the anomaly).

The ASIC Affidavit_Forbes_Octaviar_Filed 20091029 alleges:
The documents pleased at paragraphs 109 – 125 (the False Documents) were kept by MFSIM as RE for the PIF as though they were genuinely part of the financial books and records of MFSIM.

A false document (the back dated Information Memorandum) is still kept by WC and was offered to a MYF investor in response to his questions about the fund.
The ASIC Affidavit_Forbes_Octaviar_Filed 20091029 states:
“135. The Half Yearly Reports contained false information in that:
(a) the accounts showed MFSIM as RE for PIF owned an asset comprising $85 million worth of Class A units in MYF, when it did not;
WC continued this false information in PIF and MYF financial reports.
Judge McMurdo states in his judgment on the 31July 2008:
“[142] It is further alleged that at the same time, those controlling the PIF purported to purchase units in another fund of which WIM was also the responsible entity. But no money was paid to that other fund, and the suggestion is that this was a guise to conceal the misappropriation of the $130 million paid to OA.
How WC can say the Fund invested unitholders’ fund’s in accordance with the governing documents of the Fund and the provisions of the Fund constitution is beyond belief.