1 billion Local Gold Coast News
MFS founder Michael King and the auditors to his failed financial services empire are at the centre of a $1 billion lawsuit launched by disgruntled investors.
The legal action, filed with the Federal Court last Friday, is seeking damages on behalf of eight investors in the frozen Premium Income Fund (PIF), which is now under the control of Jenny Hutson Wellington Capital.
The respondents were all board members of MFS Investment Management, the responsible entity of PIF until Wellington Capital takeover in October last year.
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Former MFS Investment Management chief executive Guy Hutchings and Ian Zelinski, a senior investment consultant employed by MFS, are also in the firing line.
Andrea Waters and Michael Andrew, partners in accountancy giant KPMG, also have been named in a case one source close to the matter said would appear action,
nike cleats, filed by Arthur Carney of Sydney law firm Carneys Lawyers, is the first through which investors have directly targeted MFS directors since the collapse of the company early last year.
MFS, now named Octaviar, is in the hands of administrators and is fighting its own battle to secure a deed of company arrangement with creditors,
tory burch handbags, including PIF.
Mr Carney could not be contacted for comment, but it is understood he is talking with more PIF investors to join the action.
The claim does not seek specific damages, but it is understood KPMG, appointed auditor of the fund in 2003, has indemnity insurance of up to $1 billion,
adidas soccer shoes, more than matching the $770 million in investor contributions held frozen by the fund.
The eight PIF investors, in a broad claim,
adidas soccer shoes, have alleged that from June 2005 to about December 2007 the fund,
tory burch flats, under the control of MFS board members,
tory burch outlet, had forwarded tens of millions of dollars in unsecured loans to related MFS entities, loans which were now worthless.
They have alleged MFS Investment Management had not followed the fund audit compliance plan between 2005 and 2007, contrary to the KPMG auditors reports confirming there was compliance.
The claim has alleged KPMG, and auditor Andrea Waters in particular, to exercise appropriate professional judgment in their capacity as auditors.
The 71page filing further alleged loans forwarded to MFS New Zealand subsidiary between 2005 and 2007 were not an investment under the constitution of the fund.
It also has questioned a $50 million support facility MFS pledged to the fund in case of emergency.
The claim has alleged directors of MFS Investment Management failed to assess whether MFS the financial capacity to meet its obligations under the support facility.
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