LM site drops 'advice' claim
In fact, the administrators, John Park and Ginette Muller of FTI Consulting, are not providing advice but are in control of the company.
Since being appointed on Wednesday, Mr Park and Ms Muller have frozen LM's five Australian funds, totalling about $750 million, and are believed to be investigating whether they can seize control of the group's offshore entities.
Shortly after their appointment, Mr Park and Ms Muller had a long meeting with investigators from the Australian Securities and Investments Commission, which is probing the company.
In an unusual strategy for administrators of a large group that has retail investors, they have said little since their appointment.
They declined to speak to BusinessDay.
The single largest asset of LM's Managed Performance Fund is believed to be a $240 million second mortgage over Maddison Estate, residential land in the Gold Coast hinterland being developed by LM's founder and chief executive Peter Drake. Mr Drake did not answer a call to his mobile phone on Sunday and BusinessDay has been unable to ascertain whether he is in the country.
Lawyers are also circling the stricken group, with Piper Alderman investigating the possibility of a class action and Slater & Gordon focusing on financial planners who tipped their clients into LM's products.
In addition to claiming Mr Park and Ms Muller were merely giving advice, LM's directors also claimed the company's $12 million Australian Structured Products Fund would not be affected by the appointment of administrators.
"It will be business as usual for this fund, with no financial impact expected as a result of the voluntary administrator," the directors said in a letter to investors dated March 20.
The letter, removed from the LM website on Thursday night after inquiries to FTI from BusinessDay, is signed "the directors".
ASIC records show LM's directors are Mr Drake, executive director Eghard van der Hoven, executive director Francene Mulder and Katherine Phillips.
Frequently Asked Questions about this Article…
LM Investment Management was placed into voluntary administration and FTI Consulting administrators John Park and Ginette Muller were appointed. The administrators are in control of the company rather than acting as advisers.
Yes. Since the administrators were appointed they have frozen LM’s five Australian funds, which together total about $750 million.
Yes. Shortly after the administrators were appointed, they held a long meeting with ASIC investigators; ASIC is probing the company.
LM directors had claimed the $12 million Australian Structured Products Fund would not be affected and that it would be ‘business as usual’. That letter was later removed from LM’s website after media inquiries.
The single largest asset is believed to be a $240 million second mortgage over Maddison Estate — residential land in the Gold Coast hinterland being developed by LM founder and chief executive Peter Drake.
Yes. The administrators are believed to be investigating whether they can seize control of the group’s offshore entities, though that investigation was described as ongoing.
Law firms are circling the group: Piper Alderman is investigating the possibility of a class action, and Slater & Gordon is focusing on financial planners who recommended LM products to their clients.
ASIC records show LM’s directors as founder Peter Drake, executive director Eghard van der Hoven, executive director Francene Mulder, and Katherine Phillips.
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