Obituary for Octaviar

This was MFS' Christmas 2007 message for New Zealand investors:

"MFS Limited continues to see great opportunity to solidify its market leading position in the New Zealand debenture finance market."

Now this reads like a punchline to a bad joke but even then I thought there was something odd about issuing a press release just days before Christmas telling investors not to worry - this was a classic contra-indicator.

I recall a financial adviser rang me to ask what the story meant - he didn't realise there was anything he shouldn't be worrying about at MFS.

"It means you should worry," I told him.

With Christmas 2009 just around the corner MFS (subsequently renamed Octaviar after an hilarious court battle with a US investment firm that used the same acronym) has finally liquified  leaving its NZ subsidiary OPI Pacific Finance in similar circumstances and the thousands of debenture investors who bought its useless bits of paper, at a cost of about $300 million, devoid of hope.

And all along the way NZ MFS/Octaviar investors have been buoyed by false hopes - first the famous 'put' option that the NZ management failed to put, followed by a moratorium that is now officially dead.

Meanwhile, the MFS chief, Michael King, was out enjoying himself with his pony  prompting one of his disgruntled investors to vent: "He pretends to be media shy and I just find it disgusting that he's playing polo while the rest of us with our hard-earned are suffering."

There's a lesson here: never entrust your money to Australians who play polo, even if they think of you at Christmas.

David Chaplin