Investors request meeting over Presbyterian Mutual Society funds

UNIONIST Party leader, Sir Reg Empey, has received a request for a meeting to discuss the plight of investors from the Magherafelt District, who have invested in the Presbyterian Mutual Society. The request has come from Councillors George Shiels and Jackie Crawford who both belong to the church.

The councillors said that many Presbyterian Church members, drawn from across the council district are at present suffering financial hardship because of the stop on PMS cash withdrawals.

In a joint statement the councillors said: “We have requested our party leader, Sir Reg Empey, to afford us a meeting when we can apprise him of the financial hardship at present affecting members of the Presbyterian Church residing in all areas of the Magherafelt District, and who have invested in the Presbyterian Mutual Society.

“We recognise the great financial hardship caused to individual investors in the Presbyterian Mutual Society who through no fault of their own find their assets frozen and perhaps ultimately, dramatically diminished in value. Many had invested their monies in the knowledge that when they decided for instance, to build a retirement home or help family members at key life moments, then that money was there and could readily be withdrawn.”

The Unionist Councillors said: “We will ask Sir Reg what his prognosis of the situation is, and ask him to make representations to Gordon Brown to guarantee the PMS investments as he did with the Icelandic Bank. Such guarantees would reduce the sense of urgency abroad at the moment, and it is quite likely those guarantees might never be triggered.”

The councillors said it was unfair to blame the present crisis entirely on the mutual society, “Of course we could all act differently with the benefit of hindsight, but it is not really fair to blame this crisis entirely on the Presbyterian Mutual Society.

“Let’s call a spade a spade, this debacle was fathered by the Government and the Prime Minister Gordon Brown when the decision was taken to afford guarantees to investments with the banks, thereby creating an unlevel playing field. This unfortunately created a run on the dry cash of the society. The only way additional monies could be realised was by selling property.”

The councillors urged members, when given the two options by the society, to go for a structured wind-down and gradual realisation of assets rather than closing down forthwith. “We are not financial experts but we have taken advice from those who have studied the present dilemma facing members.

“A dramatic liquidation of assets would undoubtedly mean investments taking a large knock with perhaps a markdown approaching 40% - 50% or more. Everyone talks of the weak property market as if a property market exists. If the portfolio of properties held in trust by the society went on the market tomorrow the majority of bids would be from speculators who would hold the properties for no more than five years probably, then make a financial killing.

“The proverbial man on the street won’t be bidding, he/she cannot obtain a mortgage – the very banks who were given government guarantees won’t give meaningful mortgages. Neither option is ideal, but the gradual wind-down option would at least buy time and perhaps the picture might improve in the interim, and the society could eventually recover.”

Councillors Shiels and Crawford concluded by saying that most members of the Mutual Society made their investment for altruistic reasons, “Many members invested in the Presbyterian Mutual Society because they felt it fitted with their social and moral values. Many would have moral problems investing in stocks and shares, seeing that activity as little better than gambling. The PMS on the other hand reserved their activities to the property market.

“Members would have known that many Presbyterian churches availed of loans from the society. Members could therefore take comfort from the fact that they were indirectly benefitting the church they loved and worshipped in.

“We know that the Presbyterian Church recognises the responsibility it has taken to give pastoral care to the membership of the society. However the answers must lie with our politicians at Stormont whom we hope will make representations to Westminster on behalf of the society membership. It was after all the actions of the government which resulted, in this case, in discrimination of one section of the population -that section just happens to be Presbyterian.”