ASIC intervenes in PIF transaction
The Australian Securities and Investments Commission (ASIC) has legally intervened in the sale of Premium Income Fund (PIF) by initiating proceedings against the responsible entity for the fund, Wellington Capital Limited.
The regulator announced its legal intervention late on Friday, saying it had commenced proceedings in the Federal Court "seeking declarations of contravention by Wellington" and injunctions preventing Wellington from putting the five resolutions to unit holders in the fund.
Those resolutions are contained in a Notice of Meeting and Explanatory Memorandum dated 6 May 2013 to unit holders of the PIF on 14 June 2013. The ASIC action also seeks to prevent Wellington from taking any other actions to implement the resolutions.
The ASIC action names two other companies as defendants in the proceedings — Perpetual Nominees Limited, the custodian of the PIF, and Asset Resolution Limited (ARL), in circumstances where one of the resolutions seeks unit holder approval for the sale of certain assets of the PIF to ARL.
Explaining its move, ASIC said it was concerned that the resolutions would involve a winding up of the PIF including the retirement of Wellington as the responsible entity, which would be inconsistent with the Corporations Act and the PIF constitution.
It said that it was also concerned that one of the resolutions, seeking to implement a compulsory buy-back of all issued units of the PIF in exchange for shares in ARL, required Wellington to issue a prospectus, something which Wellington had not done.
The regulator said it was also concerned that the disclosure in the Notice of Meeting and Explanatory Memorandum and the Supplementary Explanatory Memorandum dated 1 June 2013 was misleading, and certain statements in media releases issued by Wellington to the National Stock Exchange of Australia Limited on 28 and 29 May 2013 were misleading.
The matter is listed for hearing in the Federal Court tomorrow.
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