MFSP Financial Management clairified what it called “certain inaccurate information” issued by the state broadcaster, TVM, which was reported on the Monday evening news and posted on the TVM website, titled ‘Maltese may lose money invested abroad’.
In issuing this feature, produced by the PBS newsroom, MFSP said, TVM made no effort to meet or speak to MFSP in order to verify the information it received prior to producing the feature.
“MFSP would like to declare that the forenamed feature contained a number of inaccuracies and misled viewers and readers with reference to the situation with LM Investment Management Ltd and ARM Asset Backed Securities.”
The factual inaccuracies presented in the news feature do not reflect MFSP’s business model of transparency and accessibility. It said the news feature asserted that the outcome of the LMIM products will result in ‘substantial losses for Maltese investors’. “The board of LMIM advised on 19 March, 2013, that after full consideration of its obligations as a company, and its duties to ensure it acts in the best interests of investors in the LM funds, it was placing the responsible entity, LMIM into voluntary administration. An investor circular, prepared by FTI Consulting, the new voluntary administrators of LMIM, was sent to all MFSP clients, which circular clearly specified that the funds of LMIM are not in liquidation or administration but rather it is the company LMIM that is in voluntary liquidation. The funds in which investments have been made, and LMIM (in which no investment has been made. LMIM is a privately owned management company), are legally segregated and separate entities.”
While FTI are conducting a review of the Funds to determine the appropriate strategy for each fund, these funds have been closed to investors so as to ensure they are protected. The journalist incorrectly concluded that ‘it will not be easy for Maltese investors to recover the amounts invested in the LM funds’.
A preliminary review document was prepared by the new administrators FTI, on 2 April, 2013, where it is stated that a full recovery of the initial investment by unit holders is expected in the case of the LM Australian Income Fund. Had the journalist preparing the feature made an effort to contact MFSP to enquire on these updates, which are both of public concern and immediately available to the public, this information could have been duly reported in an accurate manner.
The news feature also compared LMIM with the Dutch bank (SNS Reaal).The latter was nationalised in February 2013, resulting in full loss of capital for subordinated bondholders. The two situations are very different and bundling the two news reports into one feature misled viewers and set a highly dramatic tone.
The broadcast mentioned that a total of three local licensed intermediaries sold this product, however it then went on to show a five to ten second film exclusively of the MFSP facade. This is not acceptable, MFSP said. If a news feature mentions that there are three intermediaries which have sold these products, then it should follow that either all or none of these intermediaries are shown in the visual report.
Last but not least, the journalist also concludes that Maltese investors lost millions of euros in the ARM Funds. This is misleading and incorrect, MFSP said. According to the latest regulatory news service published on the Irish Stock Exchange on 25 February, 2013, the announcement states that the ARM board of directors plan to present bondholder offers during spring 2013. This delicate restructuring process is being monitored by Ernst & Young as supervisory commissioner appointed by the Luxembourg regulator, the CSSF.
MFSP can be contacted on 21 332200 should investors have any concerns.