Manx Herald Isle of Man: PSG responds to Treasury Minister’s answers to Keys’ questions about Premier Low Risk Fund

PSG responds to Treasury Minister’s answers to Keys’ questions about Premier
Low Risk Fund
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Herald Editor on 10 December, 2009 09:49:00
 
The Premier Shareholders Group (PSG), a group of investors and former investors
in the IOM based fund, has issued a response to comments made by Treasury
Minister, Allan Bell during a recent Keys’ Question Time.
Michael MHK, David Cannan had posed to Mr 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?
Mr Bell had reassured Mr Cannan that the Financial Supervision Commission had
put a considerable amount of time in to trying to find a solution to the
problems experienced by the fund; but essentially said the decision to put money
into the fund was made by investors knowing the risks involved.
Some of Mr Bell’s comments appear to have enflamed the already volatile and
acrimonious saga with PSG going as far as accusing Mr Bell of misinforming the
House with some of his answers.
In a hard hitting open letter, reproduced in full below, the PSG also accuses
the Manx government of changing the law to prevent some of the disaffected
investors from bringing claims under the Financial Services Ombudsman Scheme.
Therefore, it would appear, to the Manx Herald, this saga has some way to run
yet before a satisfactory outcome, as a far the investors who have ‘lost’ a
considerable amount of their savings, is found.
OPEN LETTER TO: - The Treasury Minister, Allan Bell MHK
Government Office
Buck's Road
Douglas - IM1 3PZ
Isle of Man
From:- The Premier Shareholders Group
9th December 2009
Dear Mr. Bell
The Premier Low Risk Fund plc
Your recent comments made on Manx Radio and in the House of Keys are nonsense.
The Isle of Man is NOT a good place to do business and investor’s money is NOT
safe on the Isle of Man.
You misinformed the House of Keys by claiming that: - “The promoter (Premier 
Low Risk Fund plc) introduced a market value adjustment to be applied to early
redemptions from the Fund. I am advised that the majority of investors in the
Fund understood the issues the Fund faced, and wished to leave their
investments, in fact.
Clearly, however, a minority of investors were not happy and a number of those
have become vociferous complainers, especially those who are retired and were
expecting to rely on the Fund for income.”
This is nonsense.
Regardless of all other circumstances it is illegal for the Premier Fund’s
directors to apply ANY exit penalty unless first disclosed to investors BEFORE
they transferred their savings to the Fund (or any other fund).
Also nonsense is your claim: - “that the majority of investors understood the
issues the Fund faced and wished to leave their investment in the Fund”.
Investors are withdrawing money from the Fund in droves as is demonstrated by
the Fund’s asset value falling from over £200m to a current figure of around
£60m.
And the reason that pensioners “were expecting to rely on the Fund for
income” is simply because the Fund’s directors advised them that this is
exactly what they would be able to do!
You claim to have used your influence as best you can with the FSC to find a
solution to these elderly people’s predicament, but then argue that because
the Premier Low  Risk Fund plc is classified as an Experienced Investor Fund the
pensioners were required to sign an agreement recognising the risks involved
with such Funds.
This is more nonsense.
The Premier Fund is designed exclusively for institutional or professional
investors and the directors tricked pensioners into transferring their savings
into a totally unsuitable Fund by offering them misleading advice.
This advice included claiming that the Fund is ‘Low Risk’ when a High Court
has ruled that the investment strategy adopted by the Fund’s directors is
‘High Risk’, advising the pensioners that their savings were ‘secure and
guaranteed’ and associating the Fund’s risk rating with that of a Building
Society.
Pensioners lost up to 60% of their savings in the process of rescuing them!
The Isle of Man government maintains a reserve of £1.3b which is at your
disposal to compensate those suffering hardship as a result of being mis-sold an
investment product.
However the use this money would also oblige the government to investigate the
activities of Premier’s directors – and when faced with this dilemma you
prefer to see pensioners suffer the misery of losing their savings.
And to further add to this misery your government has cunningly passed a new law
which prevents some of the pensioners bringing claims under the Financial
Services Ombudsman Scheme.
To refer to the Premier Low Risk Fund as an “ill conceived venture” is the
understatement of the century.
The PSG will use every available means to bring this disgrace to the attention
of the world. Trust us.
Premier Shareholders Group