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Revealed: why Presbyterian Mutual Society collapsed
Tuesday, 7 July 2009
The stricken Presbyterian Mutual Society has lost more than £50m in the property prices crash, an administrator’s report has revealed.
A spokesman for the administrator has also told the Belfast Telegraph that fraud has now been ruled out as the reason for the collapse of the PMS.
The administrator's review of the conduct of the directors is to be submitted to the Department of Enterprise, Trade and Investment in the coming weeks, but will not be made available to PMS creditors.
The second interim public report on the failure of PMS has been published by the administrator, Arthur Boyd. It discloses that the main cause for the PMS crisis was the collapse in valuations of development land.
Loans of £85m were made by PMS for the acquisition of over 100 acres of building sites and development land in Northern Ireland and Scotland. According to the report, these assets have a current market value of only £34m.
The administrator's spokesman said this figure was “a prudent, honest, realistic valuation”, but that his job was to achieve a higher figure if possible. The development land was acquired in Scotland and Northern Ireland, but the administrator has not disclosed the identity of those who borrowed the money.
PMS has, in addition, lost income because some of its commercial tenants have ceased trading. Woolworth's, Principles and Rosberys were all PMS tenants, whose leases have not been resold.
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Comments
21 Comments
In the past John Dunlop from the Presbyterian Church said the reason why the PMS failed, was due to the government backing the banks, hence the PMS had a run on its money
The administrators report shows that this is simply not true.
The PMS an unregulated society made bad investment choices this is why it failed. Why are its directors not called to account for this
Non Presbyterians were not good enough to be allowed to invest, why should non Presbyterians now be good enough to bail out PMS
Posted by Victor Stevenson | 07.07.09, 23:30 GMT
Banks and Building Societies do not brazenly pick their customers according to which Church they attend. Greedy sheep, lead by a greedy shepherd, were gobbled up by the hungry wolf. Don't expect me to share any of my taxpayer's dinner with you - you excluded me from yours, on the basis of faith. Have faith, God will provide.
Posted by Anyonebutunited | 07.07.09, 22:10 GMT
Why should I as a taxpayer pay for a bail out of Ulster Bank (RBS group) savers and investors - they gambled on property and dodgy acquisitions and lost out big time. I bank with Barclays who havent taken a penny from the government and I am footing the bill for all you NI people who then have the cheek to attack others who want to be treated equally. Youre a bitter and twisted bunch
Posted by Fred | 07.07.09, 21:51 GMT
Presbyterian congregations refuse to accept money from the proceeds of lotteries which are regarded as sinful. The PMS was gambling with investors' money and had ministers on its board. Plush mahogany Presbyterianism is an unlikely home for the pursuit of filthy lucre. Shrewd investors would have steered clear of an institution which consistently paid 1% above market leaders.
Posted by George | 07.07.09, 20:30 GMT
Put your own house in order Presbyterians!! You didnt share your profits with us in the good years yet you have the gall to look for a bail out for your private investors club when things go bad .
You have some nerve!!!!! no tax payer money
is available!!!!
Posted by Kevin | 07.07.09, 18:56 GMT
The investors eventually will get back at least 65% of what they put in but the rules do not allow the small people who only have shares up to £20k to get money when the administrator starts distibuting the £17m he is holding. Fix that first and start giveng something back to everyone then we can stop reading that people have people have lost all their savings. Also why protect the big borowers who lost the money from publicity? Some could pay it all back now if they parted with other assets.
Posted by Mutuosity | 07.07.09, 18:54 GMT
NS your argument is factually incorrect, when a bank fails the asset guarantee scheme that is contributed to by all financial institutions (at least in the ROI) will re-imburse depositors. The assets of the bank (Loans) are sold on by the creditors to another financial institution with whom you continue to pay the amount due on your mortgage.
If people who "Invested" in the PMS were mis-sold the product they need to complain to the ombudsman, if not they took a risk.... It didn't pay off.
Posted by Bren | 07.07.09, 16:57 GMT
Most people here would have lost money in savings and current accounts had the government let the banks fail. Which would have happened had the tax payer not coughed up. Not only that, anyone with a loan at a failing bank could have had their mortgage called in which most likely would have resulted in repossession unless you had the outstanding amount available. And obviously not in one of the banks that had just went under. So, why complain about the PMS? We've ALL had tax payers' money.
Posted by NS | 07.07.09, 16:44 GMT
Emma,you are missing the point.Unless you were a member you werent allowed to save with the PMS.I have invested in my house but have lost money on it but why should I ask other people to pay for it.If you invest you are legally told of the risks of doing so beforehand.The PMS invested and lost.Tough,.. but thats life,why should I pay for their misfortune simply to prop up their balance sheet?
Posted by ChrisM | 07.07.09, 16:40 GMT
I am starting the Sectarian Savings Society, as only non-PB's are eligible to join. If it goes bosom up, you will have to grovel to Gordon for a fiscal raft. Non swimmers welcome.
1st rule - invest for need, not greed. 2nd rule - don't put all eggs in one basket. Here's me thinking good PB's believe the Good Book - love of money is the root of all evil. What next ? They'll be wanting taxpayers to pay for 'topshelf' films in hotels, like JD. Sell the Properties, re-imburse the greedy, flock ?
Posted by angrytaxpayer | 07.07.09, 15:20 GMT
Maybe they could ask the Vatican for a wee loan. I hear they have a few quid about the place!
Posted by Matt | 07.07.09, 15:08 GMT
Emma - there is a difference between saving and investing.
Posted by McD | 07.07.09, 14:37 GMT
Greedy people on the make lost all their money in a market crash and expect a bail out. Sorry folks, you played the game and lost. I have no sympathy. It's he captalist way.
Posted by John | 07.07.09, 14:18 GMT
Chris M, Ill bet you wouldnt be taking that view if you had money invested there! Look at all the people who have lost all their savings in the collapse and it wasn't their fault!!
Posted by Emma | 07.07.09, 14:17 GMT
No way should the tax payer bail this lot out - they made an investment, it went wrong, they lost. It's a sad story but a not unfamiliar one. However, tax-payers shouldn't be expected to foot the bill. The collapse was brought about by investors withdrawing cash so it's inaccurate to blame it on property valuations. It's just tough luck. Anyway, as a non-Presbyterian I was excluded from investing so why should I as a tax-payer now be expected to save them? Hypocrites.
Posted by mistercee | 07.07.09, 14:16 GMT
I lost £20 on the Grand National, can I have that back?
Stephen
Posted by Stephen | 07.07.09, 14:07 GMT
I Have no money in the PMS, however Gordon Brown bailed out a similar Mutual Society in his home town. Fairs Fair but not when it crosses the the irish sea.
Posted by simonmc | 07.07.09, 13:52 GMT
Remind me again why these people are any different to any others gamblers who lost their money?....
I backed one of the fallers at last years Grand National, do i get a refund???
Dont give them a penny!!!....
Posted by Ryan | 07.07.09, 12:53 GMT
Many people got their fingers burnt in the property market.
No doubt past investments by the PMS were highly lucrative for investors. This was wasn't.
But thats no reason for the tax payer to foot the bill.
Posted by gearoid | 07.07.09, 12:07 GMT
Obviously the teachings of the church didn't spill over into its mutual society, "for the love of money is the root of all evil". Maybe some of them don't actually take the Bible as literally as some profess. I generally go by "don't put all your eggs in the one basket".
Posted by Michael Falkes | 07.07.09, 11:53 GMT
21 Comments