Former MFS boss Michael King to contest court order of $177 million compensation
Businessman Michael King, who was recently penalised by Queensland’s top court for what happened to his investors, says he will contest the ruling all the way to the highest court.
The former MFS chief executive has been ordered to pay $177 million in compensation to investors.
In spite of the court’s ruling, King has a job with Hong Kong billionaire Tony Fung retaining him to advise on his property plans, The Australian Financial Review reported.
The Supreme Court of Queensland last week disqualified former officers and the funds manager of MFS Investment Management Limited (MFSIM) from managing corporations for, ranging from a permanent ban down to five years, and imposed total penalties ranging from $90,000 to $650,000.
The court found Michael King along with Craig Robert White, David Mark Anderson, Guy Hutchings and Marilyn Anne Watts to have breached the Corporations Act.
The breaches were committed in relation to their involvement in the misappropriation of $147.5 million of funds that had been held by the managed investment scheme known as the Premium Income Fund (PIF) on behalf of unitholders. The misappropriated funds were used to pay debts owed by other related entities in the MFS Group (which was subsequently known as Octaviar). The MFS Group collapsed in 2008 owing $2.5 billion.
But King was defiant. “This has a very long way to run," King was quoted as saying by the AFR. "I will take this to the highest court in the country."
About his role with Fung, King said he was “doing advisory work… when and where I am able to, and when I can add value to the process”.
King has helped Fung buy about $100 million in property mainly on the Gold Coast, including the former MFS-owned properties that were sold to Nathan Tinkler, which became part of Patinack Farms.
An Aquis spokesman defended Fung's selection of King.
"Fung will use who he wants when he wants as advisers," the spokesman said.
Fung, who also owns the Canberra Casino, joined Chinese developer Tandellen and CCCC International Holding to buy a development site at Surfers Paradise last year for $40 million.
He signed a contract to buy the 11,800 sqm, currently owned by Orix, with King's help.
MFS Ltd was a publicly listed company with interests in financial services, travel and leisure and childcare businesses that was based on the Gold Coast.
The listed company quickly rose to become one of Queensland’s largest corporate giants before its collapse.
Corporate watchdog Australian Securities and Investments Commission launched proceedings against the former MFS company officeholders and a funds manager in 2009.
In late 2009, the securities watchdog started its civil penalty proceeding against MFSM and the four former officers and a funds manager.
The Supreme Court of Queensland held last year that the four former executives and the funds manager of MFSIM had acted dishonestly in their roles.