The voluntary administrators of a beleaguered Australian firm, which froze more than $100 million of Kiwi investments, have softened a statement regarding meeting creditor and investor obligations.
It was announced last week that voluntary administrators from FTI Consulting had been appointed to Queensland-headquartered LM Investment Management (LMIM).
Thirteen hundred New Zealand investors had put money into the Currency Protected Australian Income Fund run by LMIM. This fund acted as a feeder into LM First Mortgage Income Fund, which has several commercial Australian property investments but was frozen in the wake of the global financial crisis.
At the time of the freeze in March 2009, New Zealand investors had A$95 million in this fund, although LMIM has since cut its unit price from A$1 to A59c, effectively reducing investor returns.
LMIM this month started capital distributions to some investors in its funds and said last Wednesday that voluntary administration would not affect any further repayments.
An FTI Consulting statement on the day of its appointment said:
"The voluntary administrators are working in co-operation with LMIM senior management to produce a comprehensive strategy to meet all obligations to its investors and creditors."
But a spokesperson from FTI contacted the Herald the next day, saying the statement had since been updated and "something had been flagged as potentially misleading".
A new document from FTI had removed the line quoted above and, when pressed by the Herald, the firm responded by saying it should be replaced with:
"The voluntary administrators are working in co-operation with LMIM senior management to produce a comprehensive strategy to address obligations to its investors and creditors."
FTI would not comment any further as to why this change was necessary.