Matthew Bullock Chief Executive of the Norwich and Peterborough Building Society talks to the BBC’s Paul Stainton about how they plan to deal with investors’ losses in the Keydata collapse. An investor Robert Hidderley is also interviewed. Broadcast at 08:10 on Friday 21st May 2010 in the Peterborough Breakfast Show on BBC Radio Peterborough.
STAINTON: This just in this morning as well. A pensioner who invested into a savings plan recommended by Norwich and Peterborough Building Society fears he will never ever see his money again. Robert Hiddereley invested over a hundred and thirty thousand pounds into a firm called Keydata who’ve now gone bust. Robert is one of thousands of people affected and he joins us now. Morning Robert.
INVESTOR: Good morning.
STAINTON: I do know of a few people who don’t want to be named who are also in a fairly similar boat to yours Robert. Just explain to us what the circumstances were and what you did.
INVESTOR: Well I had some money which I wanted to invest obviously. And this seemed a fairly good rate of interest certainly. And so I went to Norwich and Peter and spoke to one of their advisers, and I decided to do this. And it all seemed a very good straightforward solid sort of scheme.
STAINTON: So the Norwich and Peterborough where you had your money suggested you invest in this other company?
INVESTOR: Yes. This is where I wanted to put it, in this good rate of interest that was being offered.
STAINTON: And what were the first signs that perhaps it wasn’t as good as it looked?
INVESTOR: Well it was fine for about the first two years, two .. yes two years. Maybe more than that actually, two and a half years. And then the .. and mine was arranged so that I would get interest on my money paid every month. And about as I say two and a half years later it started to be a bit intermittent. To be fair, all the money came through for the best part of another twelve months, but then it suddenly stopped altogether.
STAINTON: And what happened then? Did you contact the N&P? Did you contact Keydata?
INVESTOR: Well I contacted Keydata and they kept assuring me that they were .. they had a cashflow problem, and that it would be put right. Everyhting would be OK.
STAINTON: You must have been incredibly worried though. This is your life savings isn’t it?
INVESTOR: Well absolutely.
STAINTON: Do you mind me asking how much you invested?
INVESTOR: Well yes, I invested a hundred and thirty thousand odd.
STAINTON: And where are you know Robert?
INVESTOR: Where am I .. ?
INVESTOR: Oh. Well I can struggle along but that’s not the point. It’s an awful lot of capital that’s gone.
STAINTON: And I suppose it impacts upon your retirement. You planned to do many things I presume with that money.
INVESTOR: Well yes. We had hoped to do the odd cruise or two, and I’m a keen skier, and that might have to be curtailed. It will .. certainly there is no question it will affect us.
STAINTON: Are you angry?
INVESTOR: Yes I suppose I am in a way. Yes yes I am.
STAINTON: Who with?
INVESTOR: Yes it’s very disappointing. I mean the whole thing sounded absolutely one hundred per cent blue chip. That was the impression I had. And it certainly was for a while.
STAINTON: Robert, stay there if you can, because also on the line is Matthew Bullock. He’s the Chief Executive at Norwich and Peterborough. Morning Matthew.
BULLOCK: Morning Paul. Morning Robert.
STAINTON: Now I know investing, Matthew, is a complex business at the best of times. Could you explain the N&P’s relationship with Keydata before we get into the minutiae?
BULLOCK: Yes. we run a financial advisory service and we look at the whole of the market, an independent financial advisory business, we look at the whole of the market and we find products which meet what our investors would like to invest in. So it’ll be unit trusts, open investment companies. and in this case Keydata, who was a company that we found in searching in the market, and, as Robert said, it looked very blue chip, very very strong names involved, and we analysed the product very carefully, because it was paying a good interest that Robert liked, and it looked fine. And for a period it looked fine to us too. And then last June it was suddenly put into administration by the FSA, which is the Financial Services Authority. That’s our main regulator.
BULLOCK: And since then it has been an incredibly tangled and very obscure journey that we’ve all been on, trying to find out what exactly has happened to Robert’s money.
STAINTON: Do you as the N&P Matthew, because you gave the advice didn’t you, do you feel any responsibility at all towards Robert and people like that?
BULLOCK: I feel enormous responsibilty trying to sort out what has happened. This is a very small group of our investors, of our members, but they feel the pain very deeply, and I have to say I am devoting all my time to trying to sort out the issue. I had hoped by now that there was going to be an announcement from the regulatory community. But in the last few days, in the meetings that I’ve been almost continuously having, that is clearly not about to happen. And so as a responsible organisation we’re considering what we can do to ease people’s difficulties. It is a hugely hugely complicated affair. There are hundreds of people working on the issue, in London, and moving it forward is extremely difficult. And I will go on putting all my efforts into doing that, because this small group of investors have really, you know, they are taking the pain. And I want to get Robert back on the slope, so he can ski. I don’t like having, trying to answer questions like this, to be honest.
BULLOCK: It’s not where we should be, and it’s not, you know, Norwich and Peterborough’s way that we would walk away from people like this. So we are working really hard, Robert, to get your money back.
INVESTOR: (laughs) That’s nice to hear that. And actually having spoken with you before I know you are doing your utmost. I am aware of that. And I very much appreciate that.
STAINTON: Is there any chance Matthew, that the people are going to get their money back? You mentioned their might be an announcement. Would the N&P feel the onus to maybe make some contribution?
BULLOCK: Well I think that there are .. Robert has sent a formal complaint to me, and I will deal with his complaint, and we’re reviewing his file, and I’ll get back to him on whether we have any responsibility in that regard. I think that what is clear to me is there are a great many people involved in this. And we have certainly been urging the people involved to get round the table and to come up with a solution that is if you like an industry solution to this issue. We are making, I think I would say, we have made a bit of progress in the meetings we’ve had in the last month. Certainly since the AGM there has been some progress. But it is glacial and I know people like Robert are rightly impatient to say what is happening where’s my money and …
STAINTON: It’s just awful isn’t it when people save all their lives for their retirement and it’s the cruellest of blows, isn’t it?
BULLOCK: It is. And let me be very clear I understand Robert at his age is not in full income, so he’s not able to generate new capital, and he and all .. most of the people involved in investing through us were people who trusted us to put their long-term savings with us.
STAINTON: And you can assure those people this morning that you are on the case.
BULLOCK: Does eighty per cent of a fifteen hour day sound like on the case? (laughs)
STAINTON: It sounds a lot, yes. And the Serious Fraud Office are investigating Keydata I understand.
BULLOCK: Yes. And I think one of the things that we’ve done is because we did a lot of research on this company, to look at how the product worked, we had a lot of information backwards and forwards from them. And that is a very rich source of information. And the quickest way that we can get back Robert’s money, is to show that there is … his investment falls under one of the cases where the Financial Services Compensation Scheme pays compensation. And we’ve certainly looked at data which, I mean we’re not fraud investigators, so I can’t say that I can know what has happened, but there are certainly some things in the paperwork we have which looks very strange now in hindsight. At the time they looked perfectly straightforward, but with hindsight, you know, we clearly are questioning some of the things that we were told. And the investigation that the adminsitrator, Price Waterhouse Coopers are undertaking, and there is an administrator in Luxembourg called KPMG, some of the things that are starting to emerge from that are I think building an argument for saying this thing was falling into the kinds of cases.. I can’t go into too much detail …
STAINTON: No no no.
BULLOCK: .. falling into the kinds of cases where the Financial Services Compensation Scheme can pay. And that’s really the quickest way in which we can deal with the issue. But in the short term this is just taking an awfully long time, we are considering what we can do to ease some of the struggle that people like Mr Hidderely are facing, just simply to get them through while the bits come together. But we .. I feel more confident that the thing .. I mean there’s a huge number of people at work on it, not just N&P but lots of people in the regulatory community are working on this. And I think everybody is very clear how serious an issue this is. And getting all those bits to come together is sometimes a struggle. But I think some of them edged closer together in the last few weeks. But they haven’t closed yet.
STAINTON: Well it’s good to know that Matthew you are spending so much of your working day, and Robert, hopefully there may be a ray of hope that you may get some of your money back.
INVESTOR. Well. Yes. It certainly sounds .. I know that Norwich and Peterborough can’t do anything any more than they’re doing.
STAINTON: OK. Robert, thank you for that. Robert Hidderley who invested over a hundred and thirty thousand pounds into a firm called Keydata who went bust in mysterious circumstances, and Matthew Bullock, Chief Executive at Norwich and Peterborough, who are doing their best to sort it all out.