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Insight

Investigation|LMIM

LMIM scandal – the anger spreads But an initiative by the IFAs promises action

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THE full extent of the suffering caused by the collapse last year of LMIM is beginning to emerge as more and more expatriate investors in Thailand come forward to speak out about their losses in the giant Australian property fund. Some 300 people in Thailand are believed to have been affected by the collapse, and they include teachers, journalists, small business operators and a significant number of pensioners.   Tragically, some who have lost their entire savings are in their sixties and older, making it almost impossible to find work that could replenish their coffers. They are the most badly affected and many despair for their future. Other investors are younger and have some time to make up at least a portion of their losses.

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All are extremely angry at the company behind LMIM’s demise, especially its New Zealand-born CEO Peter Drake, whose fund was once worth an estimated three billion dollars. One investor who lost several thousand dollars has made a point of travelling to Australia to check out Drake’s post-crash life and is now putting together a major report on what went wrong, who is really to blame and where all the money has gone.   An apparent lack of action, or even interest, in the debacle by the Australian regulatory authorities is causing considerable grief as well.   Considerable anger is also directed at the numerous IFAs who recommended LMIM in the first place, especially as it seems that only a few carried out due diligence on the fund. Special venom is reserved for those IFAs who, in order to collect inflated commissions, continued selling the fund just days before it went into voluntary liquidation. None of these advisors have shown any inclination to return their commission, or even part of it, to their former clients.   As the BigChilli reported in last month’s issue, there were indications that LMIM was facing financial difficulties months before its final collapse.   The reaction of these “financial advisors” to the BigChilli revelations has been mixed. Only one IFA was critical of the story, suggesting we were wrong to “tar all IFAs in Thailand with the same brush.”   “I’ve worked hard over the years to ensure my clients’ money is looked after,” he said, while offering no sympathy to the victims of the doomed fund. It is not

clear whether he included LMIM in his portfolio. Meanwhile, Neil A. Robbirt, chief executive of Global Investments International, a Thailand-based IFA, has responded on behalf of the Advisers Committee for Investors (ACI), which has been set up by financial advisors worldwide to help victims of LMIM.   Mr Robbirt said that the ACI has formulated a three-point plan to ensure “the management of LMIM is made accountable for the collapse, recover as much funds as possible for all clients, and get the Australian Government to recognise the failure of LM as one of the largest in Australian history and take necessary action.”   He also defended the charge of inaction leveled by some LMIM victims:   “Certain IFAs have been spending an inordinate amount of time dealing with the LMIM collapse since last March on behalf of their invested clients. Also, a number of the ACI Ex-Co members including myself, have personal investments in the MPF as well.”   The IFA responsible for introducing LMIM to Thailand is currently out of the country and unavailable for comment.   Meanwhile, the CEO of one of the country’s biggest advisories told the BigChilli he was “delighted” that the BigChilli had highlighted the LMIM debacle and the plight of its investors. He suggested, however, there was a material inaccuracy in a quote from one of the victims.   “It’s simply not true to say that IFAs operating here are not strictly regulated as they are back in the UK.”   And in a comment that may surprise

The BigChilli Thailand. May 2014.  

Find out what's hot in Bangkok and beyond with Thailand's best-read expat magazine. May 2014.

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