This article is from the Australian Property Journal archive
THE Australian Securities and Investments Commission has launched civil action against the former directors of MFS Limited, in relation to the use of $147.5 million.
ASIC is suing three subsidiary companies of the formerly listed MFS Ltd (now known as Octaviar Ltd (in Liquidation) and four former officers and one manager of MFS Investment Management Ltd, in the Supreme Court of Queensland.
The companies named are Managed Investments Ltd (formerly known as MFSIM and Octaviar Investment Management Ltd), Octaviar Administration Pty Ltd (formerly MFS Administration Pty Ltd) (In Liquidation) and Octaviar Castle Pty Ltd (formerly MFS Castle Pty Ltd and MFS Investment Holdings No 17 Pty Ltd).
And the directors in the action – former CEO Michael king, Deputy CEO Craig White, former CEO of MFSIM Guy Hutchings, former CFO and company secretary David Anderson, former fund manager Marilyn Watts.
ASIC said the directors did not operate with care and diligence, and in the best interest of the fund’s members.
ASIC is seeking orders for declarations of contraventions, pecuniary penalties, compensation and disqualifications from managing corporations.
ASIC further alleges that in about January 2008, officers and the fund manager of MFSIM created and used false documents, relating to the use of the $147.5 million. As a result of the funds being transferred, ASIC alleges that the Premium Income Fund suffered a loss of $147.5 million.
The proceedings relate to the use of $147.5 million in funds of the PIF, for which MFSIM, was the responsible entity at the relevant time.
ASIC alleges that in November 2007, officers of MFSIM caused PIF to transfer $130 million to MFS Administration Pty Ltd so that MFS Administration could use those funds to pay financial obligations of other MFS Ltd subsidiaries, including $103 million owed to Fortress Credit Corporation (Australia) Pty Ltd by MFS Castle Pty Ltd.
ASIC also alleges that in December 2007, officers of MFSIM caused PIF to transfer $17.5 million to MFS Pacific Finance Ltd, a New Zealand registered company (now known as OPI Pacific Finance Ltd (Receivers and Managers Appointed)).
ASIC further alleges that in about January 2008, officers and the fund manager of MFSIM created and used false documents, relating to the use of the $147.5 million. As a result of the funds being transferred, ASIC alleges that the PIF suffered a loss of $147.5 million.
Australian Property Journal
