Investment Matters

An update on Moreton Resources

A decision was made this week to write down the value of Moreton debt securities in their entirety.

This includes outstanding debt securities in Income Securities Portfolios (Code: MORETON_UA.UNL) and Australian Equities Portfolios (Code: MORETONCONV.UNL).

The valuation assumed recovery of client monies based upon asset realisation actions. The write-down reflects the unfavourable outcome of several developments including legal challenges that have slowed attempts by the Liquidator to realise assets. This has reduced the prospect for a recovery of funds.

The decision has been made primarily so that clients will not continue to be charged fees, given the increased uncertainty of recovery and to reflect the most recent information and recovery prospects.

The price adjustment will be backdated to 1st of July 2020 and investment management fees charged over the current financial year relating to Moreton debt securities will be refunded.

Although the carrying amount of these investments has been written down, we will continue to pursue the recovery of funds through the administration process and other means. The remaining realisation opportunities rely on legal action by the liquidator and have variable probabilities of success.

A considerable amount of time and resources have been and continue to be employed in achieving the best outcome. We will continue to keep clients informed as the process progresses.