Manx Herald Isle of Man: Questions to be asked in Keys about Premier Low Risk Fund

Questions to be asked in Keys about Premier Low Risk Fund
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Herald Editor on 20 November, 2009 05:04:00
 
The long running campaign by the Premier Shareholders Group (PSG) to seek a
satisfactory resolution of their grievances about the management and performance
of the ‘unregulated’ Premier Low Risk Fund PLC (PLRF) - which the PSG claim
is anything but ‘Low Risk’ – seems at last to be paying off.
Michael MHK, David Cannan is set to ask the Treasury Minister, Allan Bell a two
part question: (a) Whether the Financial Supervision Commission is taking action
to address the grievances of the Premier Shareholders Group in respect of the
management of the Premier Low Risk Fund plc; and
(b) if he will make a full disclosure of the beneficial ownership of the Premier
Low Risk Fund plc and the underlying financial problems?
The PSG claim a large number of pensioners were enticed to buy into the fund
with the promises of capital security and guarantees only to have half their
investment wiped out by charges, hidden withdrawal penalties and poor
performance of the fund.
PSG also claim that in the meantime hundreds of thousands of pounds was paid
into companies in the Caribbean to reward the promoters of the fund – a fund
which PSG say should never have been promoted, let alone sold, to pensioners; as
it was an Experienced Investor Fund (EIF) designed for high net worth
individuals or sophisticated investors.
Courts elsewhere have ruled similar traded endowment funds are ‘high risk’,
especially if they are geared by borrowing money to purchase the investments,
and the UK Ombudsman has upheld complaints of a similar nature to those of the
PSG.
However, in the IOM the story has been different and the Manx Herald is only
aware of one case where a payout has been made to an investor in the PLRF;
although the rest appear to have been rejected by the Financial Services
Ombudsman Scheme.
However, officials at the Financial Supervision Commission appear to have
accepted all was not well with the way the original EIF regulations were drafted
and changes were introduced two years ago.
Whether this latest development will bring new hope to investors, or former
investors, in the fund that they will have their grievances properly
investigated remains to be seen, but the Manx Herald doubts it will be the end
of the story.