C of E retains stake in payday lender company

The Church of England still has a stake in the payday loans company Wonga, even though it announced almost a year ago that it was withdrawing the money.

The reason is that disinvesting is problematic, says the Archbishop of Canterbury, the Most Rev Justin Welby.

Last July he had criticised Wonga for its high-interest lending and had threatened to drive it out of business with competition from community banks run by churches.

The following day the church was revealed to have invested part of its £5bn ($8.4bn, €6.1bn) pension fund in one of Wonga’s biggest backers, the US venture capital business Accel Partners.

The church responded that it would remove its investment.

The money had been placed by the Church Commissioners, the church’s investment arm.

Welby now says he cannot force this body to disinvest. He said: “I can’t just say, ‘Sell it.’ I do not have the authority to do that. I have the authority to say, ‘I warmly encourage you to sell it. I would really like you to get rid of it.’ That I have said on several occasions.”

Nevertheless, he said the commissioners were trying to withdraw the holding, but “it is very difficult to get rid of it”.

Last July the investment was said to be more than £1m. More recently Welby has put it at about £90,000.

The claim that disinvestment is proving difficult surprises Christian Holland, head of investment management at the City of London consultancy TAM Asset Management.

“I would be astonished if it took longer than three days,” said Holland. “You could actually shift £90,000 in 30 seconds.”
He wondered, however, whether the church was worried about a capital gains tax liability applicable to a withdrawn investment, as it may be under a legal obligation to maximise funds – though this duty could be overridden by ethical considerations.