parliamentary enquiry

DEAR FELLOW INVESTORS

Committee members of the Premium Income Fund Initiative (PIFI) will be meeting with Mr Bernie Ripoll Chairman of the Joint Parliamentary Committee on Corporation and Financial Services on the 30th March to discuss the events that have ruined our fund.

The focus of the inquiry is to examine the systems and schemes that have failed investors, in order to :
· determine whether existing legislative and regulatory regimes are providing sufficient protection for consumers;
· investigate whether regulatory and oversight bodies are sufficiently equipped and are fulfilling their responsibilities appropriately; and
· assess what can be done to ensure that such collapses, and their impacts, are minimised in the future.
The aim of the inquiry is to get to the core of the problems that led to these firm failures, including identifying any likely criminal behaviour which could potentially be addressed under current law but also identifying any systemic causes of failure.

The inquiry is not dealing with the matter of compensation. The committee does not have the capacity - and nor is it appropriate, under the committee's legislative framework - to do so.


Most investors will be aware that between November and December 2007 the PIF rapidly ( over A 24 day period) withdrew 200 million dollars from the Royal Bank of Scotland( RBOS ) the majority of these funds were immediately used for the purpose of paying out OCV related debts, including a 100 million loan to Fortress.

Based on the information we have received thus far, the fund borrowed money from RBOS to repay the loan made by Fortress ,at essentially the same interest rates . All the risk was therefore conveniently transferred from OCV to PIF investors ,for a net gain of zero.

In order to give this transaction a veneer of legitimacy, the PIF entered into a so called, Loan Participation Agreement.

Under the terms of this scheme , to quote Jenny Husons own words , Octaviar , Octaviar Administration and OPI Finance Pacific, “FORCED THE RESPONSIBLE ENTITY” to; “AQUIRE A PACKAGE OF LOANS WITHOUT ANY SECURITY”. These loans were subsequently found to be worthless .

The RE had its own board of directors and its own independent compliance committee and these people must be united in this action. No one is forced to undertake a transaction unless some form of unlawful activity has taken place.

Once a RE uncovers a breach of the Act, the RE is required to:

S601FC(l) report to ASIC any breach of this Act that:
(i) relates to the scheme; and
(ii) has had, or is likely to have, a materially adverse effect on the interests of members; as soon as practicable after it becomes aware of the breach


However , the manifestly obvious , is apparently far beyond the intellectual capacities of the bureaucrats who control ASIC.

Recently one of our members was informed in no uncertain terms by one of the senior apparatchiks .Quote, “WE HAVE NO INTENTION WHATSOEVER OF TAKING ANY FURTHER ACTION IN THIS MATTER”

We can only conclude ,that the Regulator and the Corporation Act ,in its present form, is completely incapable , of preventing abuse and exploitation to investors, either now or in the future.

Hopefully, the parliamentary enquiry will produce significant change and bring to an end to years of arrogance and complacency . That is why the PIFI consider this meeting to be vitally important.

If there is any specific issue that investors wish us to discuss with Mr Ripoll or alternatively if you have any sensitive information to pass on , please contact the PIFI at the address provided below . We will do our best to talk about these concerns in the limited time at our disposal
.
All correspondence will of course be used in strict confidence.

The PIFI will be doing its utmost to impress on Mr Ripoll the great suffering and hardship that has occurred to investors in our fund. However, as stated above ,the terms of reference for this enquiry regrettably, do not include any matters dealing with compensation.

PIF Initiative [[email protected]]
Or P.O. Box 4418, Ashmore Qld 4214