DETI seeking disqualification of 6 PMS directors

The News Letter reports that the Northern Ireland Department of Enterprise, Trade and Industry has written to six directors of the [in adminstration] Presbyterian Mutual Society [PMS] to inform them that the department has decided “that it is in the public interest to seek disqualification orders” against them.  From the News Letter report

The DETI letter said the intention to disqualify the accused was based on conduct which “makes you unfit to be concerned in the management of a limited company”.

As well as the unwanted attention of being publicly disqualified, the process can also impact on an individual’s legal ability to manage a business and could also invite action from a director’s professional body, if one exists.

The letter says that if the accused director agrees to disqualification without a public trial, they will normally get a shorter period of disqualification and would not normally pay legal costs.

The report also states that when the PMS went into administartion twenty people were named as directors.  Which appears to have prompted this concern from former Presbyterian moderator Stafford Carson

Last night former Presbyterian moderator Stafford Carson called for clarification on the criteria DETI was using to select the six directors for disqualification.

“The focus of our attention has been to seek a resolution of the crisis so that PMS savers get access to their money,” he said.

“We have not been involved in a speculative ‘blame game’. If anyone involved in the administration of the PMS has acted illegally, then their culpability needs to be established through a proper and transparent legal process.

“What is unclear is the criteria by which only some PMS directors have been identified.”

A sceptic might ask whether the disqualifications are connected to the announcement by the UK Chancellor in October of a £25million grant and a £175million loan to the NI Executive for the PMS [reg may be required].

And whether any action will be taken against Departmental civil servants [or the Minister]?

The central government grant and loan leaves just £25million for OFMDFM to find to meet their pre-election proposal.

An annex of the DETI letter accuses the director of a number of misdemeanours, including causing or allowing the PMS to:

* Carry on the business of banking contrary to the Industrial and Provident Societies Act.

* Accept deposits as a deposit-taking business in breach of the Banking Act 1987 and I&PS Act 1969.

* Carry on a regulated activity, namely accepting deposits, without authorisation under Financial Services and Markets Act 2000.

* Making loans to non-PMS-members in breach of PMS rules.

* Failing to ensure the directors met sufficiently often to control PMS affairs.

* Pursuing investment/lending policies not consistent with PMS rules.

* Having a director who was not a member of the PMS.

* Allowing non-members to borrow money.

* Allowing non-Presbyterians to invest.

(* Although not mentioned by DETI, two PMS directors were already under investigation by their professional accountancy body).

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  • Cynic

    Can we apply the same principles to Ministers or would that be a step too far?

  • After reading this I am minded of a report some weeks ago about wealthy business men hiding money in the PMS from the taxpayer. With the accusations like what we have now put to their directors I think alarm bells should be ringing . Rotten to the core comes to mind . Not bad for a semi religious savings society.If you ask me good taxpayers money going after bad. Yet again the taxpayer gets stung picking the pieces up after the greedy..Nothings sacred nowdays even from the pulpit. Whos next to be bailed out !!

  • Patrick

    Billy – You need to choose your words very carefully. Do not brand the PMS on some unsubstaniated rumour!! I take exception by your words “rotten to the core” What about DETI – the Minister and her officials. Have you forgotton their role in all of this. What action will they face for their failures and blunders? A back saving exercise if you ask me. That said if it is deserved by all means. I am sick and tired of hearing people like you go on about tax payers money. Are you not aware that the monies are loans and have to be repaid unlike any other bail out. If you object to the elderly and vulnerable who are struggling to stay afloat getting help you really are a sad and heartless person.

  • Gracie

    Well, I am glad to see that Billy is so well-informed. “Rotten to the core”… “good taxpayers [sic] money going after bad”…”picking the pieces up after the greedy”. My my, these are strong words indeed. May I suggest that Billy both (re?)read the report of the Treasury Select Committee and also develop an understanding of the rules on State Aid and the Bailouts during the Financial Crisis before making such accusations.

  • fitzjameshorse1745

    The nature of bankers was not to actually ask too many questions when retired small businessmen and retired farmers came in with a bundle of cash.
    But it would be wrong to think that most savers were anything other than decent folks who invested carefully (as they thought) in their future.
    But if they are going to be bailed out by Taxpayers, I dont suppose most would mind if PMS handed over a list of investors to the Inland Revenue Compliance folks (previously known as the Black Economy Unit).
    Faced with a choice of keeping your nestegg of say £30,000 or losing it Im sure the canny investors would not mind a few questions to clarify that the capital was indeed not previously hidden from the Revenue.
    Worst case scenario a small minority of them lose tax (with interest and penalties) which would still leave them with a lot.
    The real issue might be who is actually the beneficial owner of the capital.
    “Mammy/Daddy I have rents from a load of houses in South Belfast but I wanna open a bank account for you”.

  • Frustrated Democrat

    Indeed, but what about the people responsible for regulation do they walk away with their nice fat pensions.

  • Dr Concitor

    It is the lovely Arlene’s dismissal of the Westminster Treasury Committee’s report I find interesting
    “Enterprise Trade and Investment Minister Arlene Foster said the report was “very short on facts and details”. “All they say is that a remedy must be found, this report does not point to any solutions,” she said. “It’s very clear this report was all about apportioning blame. “It is the shoddiest piece of work I have seen coming out of Westminster for some considerable time.”
    I suppose she didn’t get where is is today without out being able to deflect flack.
    The regulatory gap identified in the report looks if it has been closed, judging by the DETI website, so it was within their powers to find a solution.
    The DUP not looking after Presbyterian money properly. Doesn’t get much more serious than that, no wonder Arlene passed the buck.

  • Observer

    Surely if the government does not compensate PMS savers for its fatal regulatory gap, that would be discriminating on religious grounds?

    After all, the PMS was fully acceptable in its denominational format for its oversight body, DETI, for all of its 20-30 years in life, with DETI having approved its rule book, Presbyterian membership and all.

  • Observer

    Disqualification of PMS directors ‘could take years’ and proceed behind closed doors, it appears;-

    http://www.newsletter.co.uk/news/Legal-move-on-PMS-chiefs.6632045.jp

  • Observer

    Indeed FD.

    the FSA, the Treasury and DETINI walk away with their reputations intact, but they were the ones that were supposed to be in control.

    The chancellor admitted last month a terrible regulatory failure for the PMS.

    So why are only PMS directors facing a formal trial???

  • Neil

    Surely if the government does not compensate PMS savers for its fatal regulatory gap, that would be discriminating on religious grounds?

    That could be turned on it’s head quite easily. If they refund investors from one religious section of the community what’s to stop Catholic folks who’ve also gambled on investments and lost to suggest that repaying only Presbyterians for gambling and losing their money in investments is sectarian?

    To not pay Presbyterians their lost investments would be in keeping with what they do to other gamblers from other faiths, and not sectarian at all, as it would be equitable treatment for all investment gamblers of all religions, i.e. you lost your money taking a risk in an attempt to make money, so tough shit.

  • Dr Concitor

    It never ceases to amaze me how everything in Northern Ireland ends up as a sectarian rant.
    The PMS is a mutual society, i.e.not for profit run for the benefit of of its members – the savers. In GB these are regulated by the FSA, but their remit for mutuals did not run to NI. This regulatory function fell to DETI but there was no legislation in place at the time of the collapse, a situation which has been subsequently rectified.
    Money in a mutual such as PMS should have been a safe low risk investment. the fact that it was not is a total failure of regulation( there was no regulation). Under these circumstances investors putting in money in good faith are entitled to recompense I beleive .
    In my first post I was pointing out that AF was in danger of upsetting her core vote, Presbyterians being the largest protestant denomination in NI and having a reputation of being careful with money(deserved or not)

  • Observer

    Sorry Neil you are wrong on a number of points.

    You say the PMS savers were investors but this is at odds with the charges the PMS directors now face – they are charged with “taking deposits” ie for savings accounts.

    Re-read the News Letter report above.

    PMS savers never gambled because the amount of money they saved was legally fixed and could not waver up and down in value with the stock market. All they could do was to earn interest in their money.

    It is hard to have it both ways – the government cannot charge the directors with running savings accounts but brush off the savers for taking speculative investments.

    Both cannot be true.

    In reality of course the government has pragmatically recognised this and is resolving the situation on the basis that these were savers, not investors.

    That is why the Treasury is stumping of £175m of loans and £25m of a contribution.

  • Observer

    Just to recap for Neil

    These charges explicitly relate to “the business of banking” and “deposit taking”… not making speculative investments.

    Any clearer for you Neil?

    * Carry on the business of banking contrary to the Industrial and Provident Societies Act.

    * Accept deposits as a deposit-taking business in breach of the Banking Act 1987 and I&PS Act 1969.

    * Carry on a regulated activity, namely accepting deposits, without authorisation under Financial Services and Markets Act 2000.

  • Neil

    Fair enough, I haven’t paid too much attention to this story to date however having had a scan of the government report on the situation, these are verbatim quotes:

    This exemption follows from registration under statutes which themselves stipulate the conditions a credit union or industrial and provident society must fulfil in order to be
    registered. A violation of any of those conditions would result in the exemption no longer applying. Hence any society registered under the Acts which subsequently decided to carry on business with the object of making profit for the purpose of paying interest and dividends would not only need to be regulated in the areas into which it expanded, in accordance with the general prohibition of section 19 FSMA, but would also lose the right to exemption with respect to its deposit taking activity.

    So if they were in the business of making a profit to pay their members dividends they are in breach of the conditions which apply to IPSs, and are obliged to become regulated and would lose the right to exemption with respect to it’s deposit taking activity.

    So the question becomes, were they in the business of making a profit for their customers? The following quote suggests that may be the case, no?

    In 2002 an information leaflet produced by PMS proclaimed that the directors did not speculate with members’ funds entrusted to their care. In contrast, in a buoyant Chairman’s review in 2005, Rev. Sidlow McFarland reported the purchase of 3 properties in the UK at a cost of £27 million to add to the Society’s fledgling commercial portfolio. Members of the PMS were informed that this course of action was necessary “in order to maintain the high level of dividend paid to members”

    Ah, so they are speculating on risky property deals (not viewed as risky at the time but hindsight being 20:20 and all) in order to maintain the high dividend level. Now that sounds suspiciciously like profit making activity.

    Then we have the following:

    Companies which are carrying out activities which should
    be regulated by the FSA have the primary responsibility for identifying that fact, and seeking the necessary authorisation.

    So in essence this IPS, the PMS is obliged, due to it’s profit making activity to seek registration with the FSA.

    As if to underline the ‘profit making’ end of the business:

    The PMS grew rapidly in the six years prior to its administration. Between 2002 and 2007, the average yearly increase in value of the assets was 58%.

    So it would be hard to argue that the PMS was not speculating on risky property deals for the purpose of generating profit. We know the do because they say so above, and because their property holdings increased in value dramatically (being over 100 million quids worth, 58% is not a bad return) and we know they’re risky because, well you know why.

    In the United Kingdom, as we have seen, credit unions are regulated by the FSA. industrial and provident societies are not so regulated, but they too have to be registered. The FSA is responsible both for the registration function and the regulation function. This co-location of responsibility means that the registrar is well placed to draw the attention of
    the regulator to registered bodies which appear to be straying into regulated business.

    Again this underlines the fact that the PMS was engaging in activity it was not authorised to do, i.e. profit generating on the back of risky debts.

    Finally:

    We have concluded our investigation and have decided that it [PMS] was conducting regulated activities without the necessary authorisation or exemption.

    I.e. speculating on risky debts to generate profits for their members, i.e. gambling with investors money for profit.

    a society which used the capital raised by way of deposits for the purpose of lending would need to be regulated as a credit institution

    Which they weren’t.

    Feel free to enlighten me as to what I’ve gotten wrong with regard to this, but it’s ironic that you think to not pay back investors in a Presbyterian only club is somehow sectarian while investors in other risky propositions who like the PMS are not regulated by the FSA and therefore do not have their assets backed by the government gaurantee (again like the PMS) should be left behind in favour of a society set uip solely for one faith.

    Explain for me if you will how you see not paying back a one faith organisation is not the definition of sectarian, where to have cover you have to be of a certain faith. Seems sectarian to me, being as how you need to be in a given sect to be paid back.

    And I repeat, I may completely misunderstand the situation and will be glad to be corrected. All quotes above from:

    http://www.publications.parliament.uk/pa/cm200910/cmselect/cmtreasy/260/260.pdf

  • Neil

    One more point:

    You say the PMS savers were investors but this is at odds with the charges the PMS directors now face

    So you say they were not investors, but from the PMS publication:

    Members of the PMS were informed that this course of action was necessary “in order to maintain the high level of dividend paid to members”

    So, what is a dividend? Dictionary definition:

    A taxable payment declared by a company’s board of directors and given to its shareholders out of the company’s current or retained earnings, usually quarterly.

    Shareholders? So they would be investors in that case, as they have invested in shares? Risky investment? You decide.

  • Observer

    Neil

    Congratulations on reading the Treasury Select Committee *after* passing public judgement on this matter.

    Many would think it more logical to do it the other way round, but no matter.

    I will come back to the point that you are avoiding its key conclusion – that government was responsible for a fatal regulatory gap!

    I see you concede the point that the PMS directors are being prosecuted for running deposit accounts in a bank, which is obviously contradicted by any claims that PMS members were “investors”.

    Broadly speaking, savers with less than £20,000 in PMS had this in industrial and provident society “shares” while those with more than this had the money saved in loans.

    Note: Industrial and provident society shares are legally fixed in value and cannot appreciate or depreciate in value. They are not linked to the stock market and cannot be presented as risk investments for greedy investors.

    The failings of what went on behind the scenes is public information for which directors are now being held to account – but the PMS savers were innocent, the select committee said.

    I understand the dividend paid on “shares” was in practise termed “interest”.

    The PMS “shares” were in practise used as deposit accounts, hence the charges of running deposit accounts in an unregulated bank; note the directors are not being charged with running unauthorised/unregulated investments.

    Both cannot be true; you cannot charge directors with running an unauthorised bank and still accuse the deposit account holders of actually holding “investments”.

    That would be speaking out of both sides of your mouth at the same time.

    Cameron isnt, he accepted they were savers, that they had been failed by terrible regulation – and that is why he approved a rescue package.

    NOTE: The proposed package at present has a *LOAN* of £175m which the PMS must pay back to the taxpayer .

    £25m is a contribution from the Treasury and at least a further £25m is expected from Stomont – not clear yet if this will be a loan or not.

    So hardly a free lunch at expense of taxpayers! there is not a snowballs chance of 100p in the pound return.

    NB The aim is 99% return for savers with less than £20,000 – larger savers will get back 70-80p at first bite, with the possibility of more over ten years run down.

    ————————-

    Now, DETI approved for 20-30 years the PMS rulebook, which said the PMS was for Presbyterians.

    You have conveniently neglected to mention the major finding of the treasury select report you cite, that the major cause of all this was “a fatal regulatory gap” that PMS savers could not have seen.

    So let’s recap;-

    * DETI approved PMS as a Presbyterian organisation;
    * DETI failed to regulate PMS properly
    * DETI is now prosecuting PMS directors for running deposit accounts in a bank without proper authorisation
    * PMS savers are more properly savers than investors.

    Conclusion of the TSC report – the government has failed PMS savers dramatically and now must make good.

    Imagine if the chancellor had stood up in the commons and said: “Yes there was a dramatic failure in our regulation of the Presbyterian Mutual Society, which we approved as a Presbyterian organisation.

    “But latterly we have decided that we should not have allowed it to be a Presbyterian society at all so we are washing our hands of all responsibility for the misery its many OAP members now find themselves in, having lost their life savings.”

    Would that have given you a happier weekend Neil?

  • Observer

    Lastly

    NOTE: The proposed rescue package at present has a *LOAN* of £175m which the PMS must pay back to the taxpayer WITH INTEREST – YES WITH INTEREST – TO THE TAXPAYER.

    Tell me Neil, how do you feel as a taxpayer about making a profit from the misery of the many Presbyterian widows and OAPs who must pay you interest to get their savings back??? Hmmmm.

    As for the shares being “risky” they were legally fixed in value and not stock market linked.

    Nobody put their money in hoping their shares would appreciate or fearing they might depreciate.

    Plus the promotion leaflets said that the PMS did not speculate with investors money.

    That is part of the reason why directors are now being charged with breaching PMS rules.

    So I think it is grossly unfair to accuse PMS members of taking risks with speculative investments.

    And if you had read the Treasury Select Committee report fully you would have seen that this was exactly its conclusion on the matter too.

    Did you see that in the report Neil?

  • Neil

    I’ll bow to your knowledge in the matter being an economics novice, and add that I have no desire to see OAPs, ordinary savers or otherwise lose money. Just scanning through the doc and didn’t read it fully, still having difficulty seeing how sorting out Presbyterians who’ve lost money is the only non-sectarian option.

    I understand that the savers may not have realised that they were investing in risky assets, but would point out that dividends are one option for investors (which you seem to admit these people were) to make money from investments instead of having a fluctuating share price.

    Finally regarding the fatal regulatory gap which certainly appears to be at the hub of the issue, DETI are saying that once an IPS operate certain ‘banking’ services which should be regulated by the FSA then it is the responsibility of that organisation to obtain FSA authorisation.

    At any rate it would appear that the good Presbyterians did well out of the PMS for long enough, and that that was the result of risky property investments which apparantly went tits up.

    Now it would be unfair and not my honest opinion that ordinary savers should be punished for the misdeeds of those on the board/in leadership, however many (non Presbyterian) people lost money off the back of the investments in bad property deals. Is it sectarian to say that if the PMS is to be bankrolled to cover their bad property investments then other (non-Presbyterian) property investment groups should also be bankrolled?

    That’s the one thing I’m still not getting, how does treating the PMS to their money back, while denying all other investors in dodgy property speculation the same equal a non sectarian result?

    How does treating Presbyterians differently to everyone else equate to to non sectarianism? Given sectarianism is different treatment due to religion, which it still appears to me to be what this is, the only primary difference being that PMS savers may not have known that their generous dividends were the result of property speculation – though the same could be said of others investing in other groups who lost money through bad property debt.

    I’ll be back on Monday and will reply then… Cheers for the debate.

  • Observer

    Neil

    The Dunfermline Building Society had a similar property portfolio to the PMS and it was completely rescued by government – 100p in the pound.

    Band deposits are guaranteed by government – but bank investments are not necessarily.

  • This kind of religious-finance crossover has no place in a modern society. A hedge fund should not be operating under the guise of religion.

    That said Observer’s contributions are insightful. Previously I found very little sympathy for the savers themselves.

  • PassingThru

    > it would appear that the good Presbyterians did well out of the PMS for long enough

    Neil.

    Don’t naively overestimate the interest paid to PMS savers.

    From memory, we’re talking maybe a percent or thereabouts better than that offered by equivalent high street savings accounts; I’m sure historic rates are readily available somewhere.
    Interest rates were not equivalent to the 20%, 30% or 40%(?) return a canny property speculator might have experienced during the good times.

    PMS was positioned as a safe non-speculative home for savings and paid interest that was wholly in accordance with that positioning. i.e. to the saver it performed exactly like the steady and somewhat boring account that it was supposed to have been.

    Albeit, with the benefit of hindsight and two years of detailed examination by all sorts of experts and commentators, it turns out to have been a bit of a wolf dressed in sheep’s clothing.

  • May I suggest that Billy both (re?)read the report of the Treasury Select Committee and also develop an understanding of the rules on State Aid and the Bailouts during the Financial Crisis before making such accusations.” ….. Gracie 19 November 2010 at 12:14 am

    A Financial Crisis caused by suited crooks still sat the helm of the Titanic vessel, Gracie, and still screwing you for all you are worth, which must make the Treasury Select Committee, State Aid and the Bailout fund managers and Administrations, the biggest suckers and plonkers on the Planet, although they are probably well enough compensated for it for it to cause them neither pain nor concern.

  • Procrasnow

    Oh the poor Presbyterian mutual savers/investors/shareholders? my heart bleeds….

    One question I have never heard asked, (not saying that it hasn’t) is whether any of our MP’s MLA’s involved in negotiations with Westminster over its bail-out are themselves or any of their families, members of the stricken company.

    another very important point, often missed in the rhetoric and spin put on the collapse of this limited company, is that:-

    1. it did not fail due to the banking crisis

    2. it did not fail due to recession

    3. It did not fail due to sub-prime mortgages.

    It failed due to it’s own savers/investors/shareholders causing a ‘run’ on it. The ‘lucky’ ones or the ‘greedy’ ones depending on how you view it rushing to get ‘their’ money out. The ones who we never hear mentioned.

    I am not a presbyterian and as such would not have been invited into this private exclusive club but even had I been I think I might have had caution by the old expression ‘If it looks too good to be true, it usually is”

    But a perception of mine is that Presbyterians are ‘Christian’ and if that perception is correct than this whole saga is about Christians losing money they should not have had in the first place.

    !! you might ask !! well their leader, their heavenly leader, has directed them, go thy way, sell whatsoever thou hast, and give to the poor, and thou shalt have treasure in heaven: and come, take up the cross, and follow me. Mark 10:21

    and as for savings for that rainy day their leader has told them it’s not necessary Matthew 6:26 (King James Version)
    Behold the fowls of the air: for they sow not, neither do they reap, nor gather into barns; yet your heavenly Father feedeth them. Are ye not much better than they?

    Of the Presbyterian mutual members, those of little faith, I have no sympathy for, the greedy I have no sympathy for, the answers were there in the Good Book had they read, believed and followed.

    Romans 13 have no debt – owe nothing
    Matthew 6:26 dont gather into barns – savings
    Mark 10 above – No ownership of property

    Reward in heaven, not here, I cannot read into the Christian Masters words any likelihood or a ‘wee heaven on earth’ that is not associated with taking up thy ‘cross’, dont think Jesus envisaged grossly expensive beds, holiday villa’s comfortable nest eggs.

    Hasnt been a good year in N.I. for Jesus or his ‘Christians’ has it? not just the Presbyterian Mutual, we had the café by the river and just a few days ago, a preacher pleading guilty to murder, to name but just 2.

  • joeCanuck

    FJH said “But it would be wrong to think that most savers were anything other than decent folks who invested carefully (as they thought) in their future.”

    I think that’s very true. It would appear that they were led astray by a bunch of Directors who were totally out of their depth. Those guilty of that should be barred from handling others money irregardless of whether they were just stupid or were greedy bastwiches.

  • Patrick

    Prosceasnow
    I am disappointed when you say “oh the poor PMS savers…. my heart bleeds”. Perhaps if you were to see the pain, misery and suffering that this debacle has caused particulary to the very eldery and vulnerable you may not be quite so harsh. The ramifications are wide and stories that I have heard are horrendous. I think it is irrelevant whether or not any or our MP’s or MLA’s have savings. That said, you can rest assured if they had, action would have been taken along ago. I do not see the point in quoting scripture either. It does not matter if you are a Jew, RC, Muslim, Methodist or RC – you need money to feed, clothe, educate your family, heat your home etc. You cannot do these things on air. I would also make the point that the PMS did not fail as the direct result of a run on deposits. There were a number of contributory factors such as:- the global economic crisis, the £50k guarantee scheme introduced by G Brown, management of the PMS and no regulatory framework in place; if there had been it is highly likely that the collapse never would have happened.

  • Patrick

    With regards to the comment by Observer re the aim for return on savings.

    THE AIM IS 100 % FOR ALL SAVERS.

    PM Cameron made a pledge to savers and used the words a fair and just solution. He has keep his pledge. If the NI Executive offer anything less it will not be a fair and just solution. Other UK citizens did not lose one penny and PMS savers deserve equal treatment too.

  • Observer

    Quite a bit in the bible on saving!

    Proverbs 27:12
    A sensible man watches for problems ahead and prepares to meet them. The simpleton never looks, and suffers the consequences.

    1 Corinthians 16:2
    On the first day of every week each one of you is to put aside and save, as he may prosper, so that no collections be made when I come.

    Proverbs 24:3-4
    Through wisdom a house is built, and by understanding it is established; and by knowledge the rooms shall be filled with all precious and pleasant riches.

    Luke 14:28-30
    For which of you, intending to build a tower, does not sit down first and count the cost, whether he may have enough to finish it; lest perhaps, after he has laid the foundation and is not able to finish, all those seeing begin to mock him, saying, This man began to build and was not able to finish.

    Proverbs 6:6-8
    Go to the ant, sluggard; consider her ways and be wise; who, having no guide, overseer, or ruler, provides her food in the summer and gathers her food in the harvest.

    Proverbs 21:5
    The thoughts of the diligent tend only to plenty; but the thoughts of everyone who is hasty only to poverty.

    Proverbs 27:23
    Know well the face of your flocks; set your heart on your herds.

  • Patrick

    Quite a bit in the Bible also about justice.

  • Observer

    Procrasnow

    You say of PMS that;-

    1. it did not fail due to the banking crisis

    2. it did not fail due to recession

    3. It did not fail due to sub-prime mortgages.

    It failed due to it’s own savers/investors/shareholders causing a ‘run’ on it. The ‘lucky’ ones or the ‘greedy’ ones depending on how you view it rushing to get ‘their’ money out. The ones who we never hear mentioned.

    ——————————–

    I respond;- the run was only part of the story.

    The government increased the deposit guarantee from £20k to £50k in banks and this change sparked a panic among PMS savers.

    The News Letter carried an interview with a man who was pursued by his bank to remove his money from the PMS as it was “unsafe”.

    Jeffrey Donaldson also said he was contacted by almost 20 people who told him their bank(s) did the same.

    I understand that the run could be plotted geographically and chronologically in a spiral outwards from a particular bank branch involved.

    Did the bank in question “reveal” that the money was unsafe or “cause” the money to be unsafe?

    You decide.

    The fact is that the sub prime crisis and banking crisis which caused the Northern Rock run immediately preceded the PMS crisis, so it would seem highly unlikely that the confidence issue did not have a knock on impact on the PMS.

    That said, the savers did cause the run directly.

    The problem is that DETI was responsible for “a fatal regulatory gap” with the PMS, the Treasury Select Committee said.

    As registrar DETI was responsible to see that the PMS was acting within its own rules; any finger pointing by DETI at PMS directors on these grounds would appear to point three fingers back at DETI for letting them practise such breaches when DETI had approved the rulebook.

    It appears we shall now see this theory tested in court.

    The treasury select committee had much to say on this point.

    In GB industrial and provident socities were brought under direct regulation of the FSA after the Financial Services Marketing Act 2000. But David Trimble says DETI was at fault for failing to carry out the same reforms in NI at this time, thus leading to a regulatory gap.

    Strangely enough, even though DETI violently denies any such gap exists, it has moved firmly and widely with the help of Whitehall and the FSA to pass all such hot potato registration/regulation into the hands of the FSA ie the fatal regulatory gap that was never there has now been closed anyway.

    ‘And I don’t want to hear anything more about it, eva, eva, eva or I will scweam and scweam and scweam the house down.’

    It would seem very unfair of a mutual or bank for the government to officially take on itself regulatory responsibility but to later divest itself retrospectively of any financial liability because it conceded it should not have accepted the registration of the mutual in question.

    In the case of the PMS, it was state sanctioned as a Presbyterian “bank” so for government to wash its hands on these grouds retrospectively would seem potentially discriminatory on religious grounds.

    Put it another way, there appears to be no law precluding a mutual society being created for members of a particular religious organisation.

    There is quite blame game going on but nobody has clean hands – DETI, directors, HM govt, PCI.

    However the Treasury Select Committee did find the savers innocent.

    And there are no *legal* grounds to deny PMS savers the remedy the Treasury Select Committee recommended for them… on religious grounds, of all things.

    Did I mention that at least £175m if not £200m of the £225m rescue package is a LOAN that PMS savers must repay to you Procrasnow?

    Would you have any objections to making a profit off the back of PMS in this way???

    🙂

  • Observer

    Quite a bit about fighting for the welfare of widows too.

  • Observer

    Patrick

    Think you will find the plan is 70 – 80 % plus for anyone with over £20,000 and 100% for those with less.

    O

  • Patrick

    Observer

    Thanks for your comment. The Plan has not been finalised and by all accounts is unlikely to be for some time. I know there has been a lot of speculaiton and rumour re percentages but I would prefer to see it in black and white..

    With this present Executive and their shannigans surrounding this issue I will be surprised if they deliver a fair and just package to PMS savers at all.. It seems more important at present to apportion blame anywhere and everywhere except DETINI. . Every saver deserves to be treated equally. Probably savers will still be waiting this time next year. It would have best been left in the hands of the UK Treasury to complete. Details would have been announced by now. Unfortuantely politicans in NI have not a good record on delivery and certainly not where PMS is concerned given the previous mess that was made on their wonderful Plan B – hardship fund and means testing..Whoever thought that up should not be working anywhere near government.

  • I understand that, within the past week, a very senior official of the Ulster Bank who was based in Belfast, has been sacked. Could this have been connected with this Presbyterain Mutual shambles?

    Has anyone any information about this? Can anyone even confirm that a senior employee has been dismissed?