Proposal to let mutual society 'run down over time'

THE BELFAST-based Presbyterian Mutual Society, which went into administration last year, has seen the value of its commercial property investments fall by £37 million in less than a year, the administrator will reveal today. It has also emerged the society had advanced £184 million in loans.

Members who invested in the church society are today expected to receive letters from Arthur Boyd, appointed administrator last November, outlining its position.

The society came under huge demand from its members to withdraw funds last autumn after they discovered it was not covered by the UK’s deposit guarantee scheme. Mr Boyd has confirmed £21 million was paid to members in October, leaving £4 million in its bank account.

The administrator has now put forward proposals to the society’s members which, if accepted, would “see an orderly run-down of its business over time”.

In his letter, Mr Boyd will inform the 10,000 members there is no guarantee they will receive the full amount they initially invested with the 26-year-old church organisation.

Mr Boyd disclosed he had held exploratory talks with several parties interested in investing or purchasing the society. But no firm offers have been received. He said it was unlikely the Presbyterian Mutual Society could continue.

Mr Boyd said although its assets “had not disappeared”, the downturn in UK property had significantly reduced its value.

He said the society’s commercial property investments were today worth about £92 million – compared to the £129.5 million reported in the society’s annual report for the year to March 2008.

The administrator said the society’s assets could not be sold quickly at a fair value. He proposes it be wound down in a “managed and orderly” way through a formal arrangement with its members.

He states: “It is too early in the process for me to say how much of the investment will be paid out and when repayments will be made.”