ASIC has instigated civil proceedings in the Supreme Court of Queensland against former executives and three subsidiary companies of previously-listed MFS, now known as Octaviar.
The legal action relates to the use of $147.5 million in funds of the Premium Income Fund (PIF), for which MFS Investment Management (MFSIM) – now known as Managed Investments – was the responsible entity at the relevant time.
The three subsidiary companies involved in the proceedings include Managed Investments, Octaviar Administration and Octaviar Castle.
The defendants in the matter include former MFS chief executive and director Michael King; former deputy chief executive and director of MFS and MFSIM Craig White; former MFSIM chief executive and director Guy Hutchings; former MFS chief financial officer and company secretary David Anderson; and former MFSIM fund manager Marilyn Watts.
The regulator is seeking orders for declarations of contraventions, pecuniary penalties, compensation and disqualifications from managing corporations.
ASIC alleges that in November 2007, officers of MFSIM caused PIF to transfer $130 million to MFS Administration so that MFS Administration could use those funds to pay financial obligations of other MFS subsidiaries, including $103 million owed to Fortress Credit Corporation by MFS Castle.
ASIC also alleges that in December 2007, officers of MFSIM caused PIF to transfer $17.5 million to MFS Pacific Finance, a New Zealand registered company now known as OPI Pacific Finance.
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.
