Investors who lost thousands of pounds as a result of investing in a failed Australian property fund manager have welcomed the news that the Thai Securities and Exchange Commission is pursuing still more of the people and companies they blame for having caused their loss.
On Wednesday, for the third time in less than a month, the regulator revealed it had filed criminal complaints on grounds of “conducting securities business without a licence” against people and companies that had been active in the expatriate community in Thailand.
This week’s filing was much broader in scope than the earlier two, as it involved complaints against nine people and two companies in total.
In a statement on its website announcing the criminal complaints, the SEC said it was responding to “complaints from several foreign residents”, but it didn’t directly name the LM Investment Management investors, who have organised themselves in Thailand into a group calling themselves the LM Thailand Investor Group (LMTIG).
However, the LMTIG investors, who number around 62, were in no doubt that the latest action was a response to their complaints, and the size of their loss.
In a statement, they said: “We, the LMTIG, welcome the action the Thai SEC took on Wednesday, and twice last month, to go after some of the unlicensed IFAs and their companies who lost our members a total of US$13.5m.
“ASIC [the Australian Securities and Investments Commission], the Australian regulator, which should have been on top of this obvious Ponzi scheme long before it collapsed, and still has done nothing, ought to be ashamed of itself.”
The investors’ group said they would not be happy “until we get our savings back”, but that the SEC’s actions were “an important step” in the right direction.
“The LMTIG commend the Thai authorities for their bold and correct action.”
Eleven offenders named
In its statement on Wednesday announcing the actions it was taking, the Thai SEC focussed on two companies – the representative office in Thailand of Gilt Edge International (Group) Ltd, a British Virgin Islands company, and PFS International Consultants Co of Bangkok, which the SEC said “advertised on www.fsplatinum.com that [it] was the administration office of Platinum Financial Services Limited Hong Kong”.
A total of nine individuals were named: Karen Elizabeth Entwistle, Steven or Steve Entwistle, Neil Callard, Mark Edward Kirkham, Andrew Wood, Harpreet Sajjan, Roger Sefton, Ms. Sakun Chaiyakun and Timothy Lock.
The punishment for conducting securities business without a licence in Thailand includes imprisonment for a term of two to five years, and a fine of between THB200,000 and THB500,000 (US$5,644 and US$14,110), “plus a daily fine of 10,000 baht until the violation ends”, the SEC said in its statement.
‘Safe as a bank’
The LMTIG investors joined forces several years ago but it wasn’t until last year, they say, that they decided to submit a group complaint to the Thai SEC. One of the first to target the regulator was Manita Khuller, who lost most of her pension in the LMIM Managed Performance Fund, after moving the assets into a QROPS at her Bangkok adviser’s recommendation.
“The Managed Performance Fund was promoted by all the Thai financial advisers as being as ‘safe as a bank’, whereas in reality it was a Ponzi scheme,” Khuller, who now lives in London, recalls.
In the end, just 31 LMTIG members signed the group complaint that went to the Thai SEC, which the group says mentioned a total of eight advisory firms.
In October, three of the LMTIG’s members – Ron Leeman, Peter Kells and John Wright – had what Leeman recalls as having been an “extremely positive” meeting with Thai SEC officials, and came away with a sense that “the Thai SEC were taking our complaints seriously, which has now been evidenced by the action they are taking”.
But for Leeman, who is 66 (the average age of LMTIG members is 60), none of it will matter if money isn’t forthcoming, and sooner rather than later.
“I lost 90% of my retirement pot,” he says. “So I still have to work. If I hadn’t taken my adviser’s advice, I wouldn’t be in the position I’m in now.”
As reported, the Thai SEC kicked off the latest phase of its crack-down on unlicensed investment advisers on 8 Feb, when it filed criminal complaint against Richard Dunston Malpass, a British national, on grounds that he had been operating a securities business in Thailand without a licence. It filed its second complaint two days later against another British National, named as Neil Arthur Robbirt, chief executive, according to the complaint, of Global Consultant Co, Ltd.
Last July, it filed a similar action against an entity known as Professional Portfolio International (PPI), a financial planning and wealth management business with an office in Bangkok, and two of its employees, again for operating a securities business without a licence.
As with its latest action, the SEC said in July that it had received a complaint from an expat investor living in Thailand that PPI had advised them to to transfer money from their overseas pension funds into PPI-recommended investments. “The complainant fell into the trap and later suffered damage from the investment,” the SEC said in that statement.
In response, Eric Jordan, managing director of PPI, told a journalist at the time that he had been told “a number of times over the years” by the SEC that an SEC licence was “not required for our business practice”, but that, as the licensing issue was now being brought to light, the company would now be engaging with the Thai regulator, and that it intended “to cooperate in full with any guidance that is received”.
LM Investment Management was a Queensland-based asset manager regulated by the Australian Securities and Investments Commission. It filed for administration at the end of March, 2013, at which point its popular Managed Performance Fund was reported to hold assets under management of approximately A$396.6m (£222.3m).
Investors have been told that they are likely to receive no more than 5p for every £1 invested in LMIM.
If you are an adviser who has been named by the Thai SEC in one of its recent announcements, or an individual who has lost money as a result of bad advice from a Thailand-based adviser, and you wish to comment on this matter, email [email protected]