The Presbyterian Mutual Society has gone into administration after getting into a series of financial difficulties.
The Belfast-based society announced last week it was stopping paying out on its funds as members tried to get back large chunks of the £300 million they had invested.
Arthur Boyd, of Arthur Boyd chartered accountants and business recovery specialists in Belfast, was appointed as administrator at the request of the directors of the society.
He said it was apparent the credit crunch had had a severe effect on the society.
“A number of members have moved funds from the society to other financial institutions that enjoy protection under the Government’s financial guarantee scheme, leading effectively to an unprecedented run on the society’s cash which it could not sustain,” said Mr Boyd.
He said his appointment would provide protection for the assets of the society and his role was to act in the best interests of everyone who was owed money.
“My aim is to see if the society can be rescued or, if that is not possible, to ensure that the society is wound down in an orderly manner to maximise the return of money to members,” he said.
But Mr Boyd added: “I cannot at this stage say whether members’ funds can be returned to them in full or what proportion of their funds can be returned.
“The society has considerable assets, but if those assets were sold now it might not produce the best return for members.”
He warned the administration process was likely to take some time and said while he was aware lack of access to funds may cause hardship in some cases, it was his job to work on behalf of all members and develop a plan which would ultimately be put to members for their consideration.
There are around 9,500 members of the society, which, Mr Boyd said, had assets of more than £300 million.
He said some £180 million was out in loans to members and £130 million was in fixed and other assets, including commercial property which was held to produce rental income which contributed to dividends.
The appointment of an administrator was made possible after emergency subordinate legislation was enacted on Friday evening by the Department of Enterprise, Trade and Investment extending legislation which normally dealt only with companies.
Enterprise Minister Arlene Foster said administration would afford the PMS time to reorganise their business. She added it would give the Society an opportunity for the administrator to manage its affairs with a view to safeguarding its assets and funds and preserving the interests of its members.
“The Northern Ireland Executive has agreed on this way forward and acted quickly, in these exceptional circumstances, to help protect the finances of families,” she explained.
“I hope this step to introduce legislation will make a difference and go some way to reassuring those affected.”
The Minister continued: “In the current economic climate it is very challenging for families and individuals to manage their finances and I want to do everything within my powers to help those affected through this uncertain time.
“I have considered all the options available to me as Minister of Enterprise, Trade and Investment and this legislation enables the Presbyterian Mutual Society to enter a company voluntary arrangement or administration.”