Tonight "The 7.30 Report" ran an article which made a number of serious and entirely false allegations.
The allegations made form part of, and mirror defamatory comments in former staffs' response to Excela's "Statement of Claim" lodged with the courts and the Company is acting to have them struck out as non-factual, misleading and defamatory.
Excela is conducting a legal action for damages against former staff who it is alleged misappropriated confidential information and property of the company, and conspired to bring commercial harm to the company, it's Directors and Shareholders.
Their claims are false and defamatory and we absolutely deny them.
At no time did the report mention the massive cash sign on bonuses the former brokers received to leave the company and take Excela's clients with them. At no time did the report mention the massive losses clients who went with them have suffered. At no time did the report mention their rapid departure from the first firm that hired them. At no time did the report mention the Statement of Claim the company has lodged in the courts against the former brokers and the allegations made in that statement of claim of the appalling behaviour on behalf of those former staff including the theft of property, the misappropriation of confidential information, the significant compliance breeches they covered up and that their former employer is owed a significant sum. The "journalist" simply accepted their allegations as fact and reported them as truth without any attempt to corroborate them or check their accuracy.
It is important to note that these allegations form part of an on-going court action and we have yet to be given the opportunity to defend ourselves in court.
I believe strongly that should the court case proceed Excela will prove its position and prove these allegations false. Moreover I believe it will prove the numerous allegations against the former staff.
I believe their claims to be malicious and their sole purpose is to force the cessation of legal action designed to protect the company and its share holders and/or to place personal pressure upon me. Bizarrely, despite the allegations of the report, I am not personally involved in the legal action. I have not sued anybody. The majority of the action took place under the supervision of the CEO of the company at the time. I could not stop the action or influence it even if I wanted to.
The company's original Statement of Claim demonstrates the nature of its claim against the former staff and the malicious nature of their actions.
It is important to note that I strongly deny these allegations and believe them to be defamatory.
The Managed Funds were at all times managed to their mandate as set out in the Product Disclosure Statements (PDS). The PDS contained detailed risk warnings and details of how the funds were operated and the fees involved.
No fund was "selected" over another. There were four house funds for advisers to choose from including Growth, Income and Emerging Markets and up to 45 external funds on our approved product list, covering the entire gambit of investing categories from very low risk cash style investments to higher risk. Advisers could select from all of those to suit the clients' needs.
In 2012 we had $167 million in funds under advice of which the Accelerator fund made up just 7%. The average fee charged to clients on the balance of the investments was just 0.75% per annum - well below industry average.
The report makes no effort to consider the significant benefit that much of my work has done or the gains that many clients have made following the investment strategy I laid out. Unfortunately a number of clients have lost money due to the GFC, and it is heartbreaking to me that any client of mine lost money through any investment in any of our companies. But many clients have been set up for life using the philosophy I have taught.
I respect any client who wishes to voice concerns over the performance of their investments and I have always responded to any client who contacts me.
The report did not mention that (some of) the funds referred to were capital protected which maintains the client's capital over the term of the loan. If the client had stayed in the product until today the majority of the funds are at break even or profit on a capital basis.
I deny any reference to or allegation of “churning” and the alleged conversation in the report simply did not happen.
The buy write fund strategy sees a number of shares in any portfolio sold towards the end of the month.
The buy-write fund strategy calls for the swap in and out of shares depending on available premium. The shares were selected based on relative strength, performance against market and income generated. This is a definitive criteria and shares that did not fit it were swapped for ones that did.
This does not constitute churning and any allegation of churning is denied. The fund was always operated within its mandate which is described in plain English in the PDS which investors received prior to investing. We also offer extensive education on the strategy including free eBooks and seminars for clients who wish to understand it better.
The allegation is actually nonsensical because I personally received no commission, personal benefit or remuneration on the brokerage generated from fund trading, and the shares traded were done so on an objective criteria. The fund was always operated only for the benefit of the unit holders of which I am one.
I am devastated that some of my companies have not performed. But I sold my shares in Excela to make way for significantly bigger investors with exceptional backgrounds and experience and solid cash backing - these are things I can no longer offer shareholders and I genuinely believe the company will now perform better under new direction. I have always acted in the best interests of all share holders.
The unfortunate administration of the companies referred to in the report was due to the down turn in the economy. The report makes much of the fact that I owned an Island Resort but it did not mention that, like many other properties in the area we were devastated by multiple cyclones, the downturn in the economy and the high Australian dollar which made the property uncompetitive. Four other resorts in the area went into receivership and they are all still closed today. I am proud of what I achieved with that property including being the Number 1 highest rated property in Australian on Trip adviser and multiple awards for service, food, eco-tourism and luxury. But in the end my personal resources could simply not support the ongoing losses.
More experienced Directors than me were called in to assess and potentially restructure, and they made the decision to put the companies into external administration or trade on.
No clients investments were impacted by these events.
I appreciate the support from many friends and clients who have emailed me, texted me and messaged me.
I am very confident we will prove these allegations to be false.