Financial operator explains state of play after investment losses reports
MFSP Financial Management in a statement today clarified the situation regarding Maltese investments in LM Investment Management Ltd and ARM Asset Backed Securities SA following media reports that Maltese investors may lose millions invested abroad.
It said that the board of LMIM advised on March 19, 2013 that it was placing LMIM in voluntary administration.
An investor circular prepared by the administrators, FTI Consulting, was sent to all MFSP clients. It specified that the funds of LMIM were not in liquidation or administration, but rather, it was LMIM that was in voluntary liquidation.
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 that they are protected.
MFSP said it had no information that “it will not be easy for Maltese investors to recover the amounts invested in LM funds,” as a section of the media had reported.
It said a preliminary review prepared by FTI on April 2 said that full recovery of the initial investment by unit holders was expected in the case of the LM Australian Income Fund.
MFSP insisted that no comparison could be made between LMIM and the Dutch bank SNS Reaal. Tha latter was nationalised in February, resulting in full loss of capital for subordinated bondholders. However the two situations were very different and bundling the two into one feature was misleading.
With regard to the ARM Funds, MFSP said the ARM board of directors is to present bondholder offers during this spring.