PIS to draw on provision pool for Westpoint claims
Professional Investment Services (PIS) will draw on funds it put aside in 2007 to pay $5.9 million in compensation to Westpoint investors.
On Friday ASIC announced the Federal Court of Australia had approved the settlement of the compensation claim for Westpoint investors advised by PIS.
PIS made a provision of more than $17 million in June 2007 to cater for potential claims against the company for losses incurred by these investors.
PIS managing director Grahame Evans confirmed the compensation would be taken largely from the group’s profits, while a lesser amount would be covered by the group’s professional indemnity insurance. Evans said the group had provisioned for the full amount of its potential liability in regards to Westpoint in 2007, and “now it’s just a matter of paying out the cash”.
As such, Evans said the compensation payment would not affect the group’s bottom line this year. For the year ended June 30, 2008, PIS booked a loss of more than $4 million, after a $1.7 million profit in 2007.
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