PIF unit holders pursue court case
Premium Income Fund unit holders have dropped court action against Wellington Investment Management but will pursue a case against 12 directors of the former Gold Coast company, MFS, as well as KPMG.
Mercedes Holdings, representing unit holders in the Premium Income Fund that was once controlled by MFS (since renamed Octaviar), are pursuing MFS directors between 2005 and 2008 as well as MFS's former compliance auditor, KPMG.
However, the original proceedings against Wellington Investment Management have been discontinued with no order for costs.
"Wellington have negotiated with the proponents that it be discontinued," Wellington Investment Management boss Jenny Hutson said yesterday. "The actual action is proceeding but not against Wellington. The action is against the PIF fund, it doesn't make sense in effect for unit holders to be suing themselves."
It is understood the action will now focus on MFS's compliance auditors, KPMG, and the former MFS directors with most of the focus on the former two chief executive officers, Michael King and Craig White, over a range of investments.
MFS, once one of Queensland's largest financiers and property developers, began collapsing in January 2008 when Mr King announced the company needed to raise $550 million in additional capital and revealed the extent of inter-company loans. MFS lost 70 per cent of its sharemarket value in one day's trading.
Carneys Lawyers partner Arthur Carney is leading the action. "We have to notify every member of the action and they have a right to opt out. Otherwise they are members of the action and are entitled to share in the benefits of any judgement or settlement in the matter."
Mr Carney said the matter would be back in the Federal Court on August 31.
Mr King, who said he could not comment on the case now before the court, also said he was looking for a purchaser for his Elysian fields polo estate in the Gold Coast hinterland. It was originally on the market for $20 million.
KPMG also declined to comment.
Meanwhile, Ms Hutson said she was negotiating to sell five assets belonging to PIF investors but had met a mixed response.
"There has been real depth of interest on the Wollongong asset (a 90 per cent completed hotel and serviced apartment project south of Sydney); we remain in negotiations with interested parties. We continue the discussions on all assets with parties that have emerged from the sale campaign," she said.
"There is positive movement in terms of market sentiment compared with six months ago."
Article by Lisa Allen