Manulife standing behind its customers, says CFO

(March 30, 2005) Manulife’s move to protect client funds invested in Portus has been well-received, says the insurance giant’s chief financial officer. But Peter Rubenovitch concedes a regulatory probe of the hedge fund firm created angst among both Manulife advisors and clients.

Details of Manulife’s guarantee have not yet been released, but Rubenovitch said on Wednesday that Manulife will be “placing customers in a safe position with some dispatch.”

And in a financial services webcast sponsored by National Bank, Rubenovitch noted that Manulife “has stood behind its customers, versus many of our competitors, who have not stood up to protect the concerns of their customers.”

Earlier this month, Manulife president Dominic D’Alessandro promised that his firm would guarantee the recovery of 100% of the principal invested in Portus, adding that Portus’s products and structure “were not as they were represented or understood by others.”

It’s estimated that Manulife advisors referred $240 million in client money to Portus.

The Ontario Securities Commission froze Portus’s assets in February and appointed KPMG as a receiver earlier this month. “Shortly after the receiver was appointed, Manulife moved to assure our customers, those who bought Portus through our licensed brokers, that their principal was not at risk,” Rubenovtich said. “We felt that was an appropriate response to establish goodwill with our customers.”

Yesterday, a judge granted KPMG additional power to question former Portus executives, obtain corporate material and review the finances of a related business. KPMG says it has been unable to complete its investigation into Portus, partly because key electronic files were “deliberately and systemically” destroyed.

The Ontario Securities Commission has obtained a court order extending Portus’s receivership until April 8, at which time Portus will bring a motion seeking to terminate the receivership. An OSC hearing on Portus is set for May 17.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com