Following several months of negotiations to set up a possible partnership, FLV Fund has decided to continue its activities autonomously and is reviewing its business plan. The resignation of managing director Philip Vermeulen, due to pressures that were interfering with the flow of the firm, also marks a change of direction for FLV. Piet Vandermeersch will temporarily assume the position of acting managing director.
During the last few months, the new board of directors, elected in March of this year, has evaluated a number of possible partnerships and acquisitions for the fund. However, all negotiations have been terminated since the proposals of interested partners did not match the potential value of the fund or demonstrate adequate protection for shareholders. To optimize the current value of the fund, the directors therefore decided that FLV should continue its activities autonomously, but with a different strategy.
Vandermeersch said, “From the proposals we received, it appeared that what was on offer did not meet the original goals set out. We then realized that we had to look at what we have in our portfolio and revisit our business plan.”
He added that Vermeulen’s resignation was due to pressure of the events of the past nine months. However, Vandermeersch also acknowledged Vermeulen’s commitment and contribution to the strength of FLV’s portfolio.
A factor contributing to the turbulent few months the fund experienced is a case involving $30 million that was unlawfully pledged when FLV had plans to set up a Korean fund. The $30 million was to be used from FLV’s secondary public offering that raised $90 million. Irregularities were discovered earlier this year and Vandermeesch, who joined the board in April, ordered an examination of investments. The findings of this research revealed that FLV had been the victim of fraud and embezzlement and has since filed a suit against Hanvit Bank. Further details were not available, but this has been published in a book on the company’s Korean activities. Vermeulen stresses that the firm does not want to unduly waste shareholders’ money on legal actions, however, he declined to clarify details of the situation.