Investors take legal action against Wellington Capital
A group of investors in the distressed Premium Income Fund (PIF) have commenced urgent legal action against Brisbane-based fund manager Wellington Capital and its directors.
The PIF action group has sought an injunction to cancel units in the fund that were issued in a recent capital raising, and to reverse changes to the constitution that were made without unitholder approval which allowed Wellington to issue units at a discount of 74 per cent.
The action group has also sought to restrain Wellington from counting votes from any new unitholders at upcoming meetings, such as the vote to be held on 16 June where unitholders will vote on whether to replace Wellington with Castlereagh Capital as the responsible entity of the fund.
The injunction also seeks to restrain Wellington and its directors from issuing units pursuant to a rights issue, which had come about at the same time as the capital raising.
PIF action group vice president Charles Hodges said the capital raising was clearly not in the interest of existing unitholders and as such, could be declared invalid under the Corporations Act.
He said the rights issue was also seen as against unitholders’ interests as it effectively forced them to take up the issue if they did not wish to have their unitholding diluted.
The injunction application has been lodged in the Federal Court of Australia at the Victoria District Registry and will be heard today.
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
