Matthew Bullock Chief Executive of Norwich and Peterborough outlines to the BBC’s Paul Stainton his plans to offer interest-free loans to investors who may have been adversely affected by the collapse of Keydata Investment Services. Broadcast at 07:10 on Monday 7th June 2010 in the Peterborough Breakfast Show on BBC Radio Cambridgeshire.
PAUL: Now investors affected by the collapse of Keydata Investment Services have been offered an interest-free loan by the building society who recommended the products. You may remember we did this story a couple of weeks ago. The Norwich and Peterborough Building Society advised three and a half thousand people to invest in Keydata, before the company went into administration last year. Many investors fear they may now never see their money again. Matthew Bullock is the Chief Executive at Norwich and Peterborough Building Society. Morning Matthew.
MATTHEW: Morning Paul.
PAUL: Can you just explain in layman’s terms what this offer is that you’re making.
MATTHEW: Well people who invested for income in Keydata had their income stopped at the end of January. And we’re aware because of talking to people and getting letters that some of those people are getting into income difficulties. And whilst we’re waiting for the capital resolution to come clear what we’re offering is that we will give people interest-free loan equivalent to the income they were receiving before it was cut off, which will go through and tide them over until the end of this year. And then during that period hopefully the .. what’s going to happen to the capital will become clearer.
PAUL: So only people that have got an income generated investment?
MATTHEW: That’s right. There were some people who invested for capital growth. They’re not short of the income. They’re obviously going to be short of the capital, and we’ll deal with that when we know how much the shortfall is.
PAUL: Right. And how will this loan work? If at the end of the day the money does come through, and they’ve borrowed money off you on an interest-free loan, how will it all work?
MATTHEW: Well if anybody gets any compensation, or capital back, we would ask for our loan to be repayed, and then from that point on we’ll .. any other kind of issues to do with shortfall of capital will have to be dealt with separately.
PAUL: Will there be a credit checking exercise for these loans?
MATTHEW: No. We know who these people are, we’ve obviously done factfinds on them before we made the investment, so we’re not bothered about that side of things. It’s very straightforward. I’ve written to everybody who was affected in this way, and they simply have to tick the box at the back of the letters, send it back, and we’ll send them the loan pack that they require in order to get the money.
PAUL: Is this enough though Matthew? because you advised people to invest in this company. We’re speaking to a lady later who invested five thousand pounds, and she feels the offer’s a bit of an insult. Could you not, while you wait for everything to be sorted out, could you not foot the bill for all the people that have invested money, and you claim the money back?
MATTHEW: I think we don’t actually know, because we’re not involved in the negotiations with administrators, we don’t know what the shortfall position is. I believe an announcement should be coming out fairly soon on that. And when that’s there then we’ll sit down with everybody else and sit round a table and say right what’s going to be done about the capital shortfall. But it would be premature to do that when the thing is hopefully going to come and see the light of day soon.
PAUL: Have you discussed what I’ve suggested though, discussed you know meeting ..?
MATTHEW: Yes I mean I think the question is this is a .. this is quite a complicated situation with quite a few parties involved, and we’re not the only party. Whilst we’ll do what we have to do, we never walk away from our responsibilities. At the same time we do have to find out what the other parties have done and been involved in, and say Ok, what are they going to do as well? So it’ll be a round the table solution rather than one person standing forward and then trying to sort the matter out.
PAUL: Are you hopeful Matthew, from what you’ve heard, that there will be some good news for all of the investors?
MATTHEW: I think .. I don’t think people are right to believe that they’ll get nothing back. But I don’t want to go further than that. I don’t want to lead on any expectations until I know the numbers better. But I don’t think it’ll be a disaster .. it won’t be a complete wipeout.
PAUL: Ok. And for those people that do have the income generated investment how do they get involved, how do they get this loan to tide them over?
MATTHEW: They’ve got the letter from us. I’ve written to everybody. We know who they all are. I’ve written to them. And they just .. if they’re interested, tick the box at the back, send that back to us, and then we will be in touch with the loan pack for them. And we have people standing by in branches and our contact centre who can help them go through the loan pack and sign the documents they need to sign.