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Justin Welby says Wonga revelations will not divert him Justin Welby says Wonga revelations will not divert him
(2 months later)
It's the £75,000 investment that has not only caused the archbishop of Canterbury intense embarrassment, but also shone a spotlight on some of the Church of England's other ethically questionable investments.It's the £75,000 investment that has not only caused the archbishop of Canterbury intense embarrassment, but also shone a spotlight on some of the Church of England's other ethically questionable investments.
Less than 24 hours after the Most Rev Justin Welby said he wanted to "compete Wonga out of existence" it was revealed that the Church of England holds an indirect investment in the controversial payday lender. Welby said he was "very embarrassed" to discover that the Church, which recently added payday lenders to its list of prohibited investments, holds a £75,000 investment in Wonga via a complex series of venture capital funds.Less than 24 hours after the Most Rev Justin Welby said he wanted to "compete Wonga out of existence" it was revealed that the Church of England holds an indirect investment in the controversial payday lender. Welby said he was "very embarrassed" to discover that the Church, which recently added payday lenders to its list of prohibited investments, holds a £75,000 investment in Wonga via a complex series of venture capital funds.
Welby, a former oil industry boss and member of the Banking Standards Commission, told the BBC his level of embarrassment over the matter was "about 8" out of 10.Welby, a former oil industry boss and member of the Banking Standards Commission, told the BBC his level of embarrassment over the matter was "about 8" out of 10.
But he said the revelation of the investment - made via a fund of funds that invests in US venture capital fund Accel Partners in 2004 and 2007 - would not divert him from his mission to create an alternative to Wonga and other payday lenders, which said "destroyed" lives.But he said the revelation of the investment - made via a fund of funds that invests in US venture capital fund Accel Partners in 2004 and 2007 - would not divert him from his mission to create an alternative to Wonga and other payday lenders, which said "destroyed" lives.
Welby promised an inquiry to discover how the investment slipped passed the Church's Ethical Investment Advisory Group.Welby promised an inquiry to discover how the investment slipped passed the Church's Ethical Investment Advisory Group.
But it later emerged that the investment does not breach the Church's ethical investment policy, which only prevents the Church from directly investing in companies that make more than 25% of their money from high-interest lending. In this case the Church Commissioners £5.5bn fund was not directly invested in Wonga, but via a "fund of funds" called VenCap, which holds an investment in Accel Partners, one of Wonga's main financial backers.But it later emerged that the investment does not breach the Church's ethical investment policy, which only prevents the Church from directly investing in companies that make more than 25% of their money from high-interest lending. In this case the Church Commissioners £5.5bn fund was not directly invested in Wonga, but via a "fund of funds" called VenCap, which holds an investment in Accel Partners, one of Wonga's main financial backers.
Gavin Oldham, a member of the church Commissioner asset committee and ethical investment advisory group, said the investment represents "a tiny fraction of percent" of the £5.5bn fund.Gavin Oldham, a member of the church Commissioner asset committee and ethical investment advisory group, said the investment represents "a tiny fraction of percent" of the £5.5bn fund.
Oldman said the Church's investment managers were aware of the Wonga investment but had not passed it on to Welby or the Church Commissioners, which he admitted was "very embarrassing".Oldman said the Church's investment managers were aware of the Wonga investment but had not passed it on to Welby or the Church Commissioners, which he admitted was "very embarrassing".
"The investment was very deep down in the fund, but a holding like that is very high profile and it is important to make people aware of it," he said."The investment was very deep down in the fund, but a holding like that is very high profile and it is important to make people aware of it," he said.
Oldman said the Church's asset committee and ethical investment advisory group will meet in September to discuss whether or not to withdraw its investment in the fund of funds that invests in Wonga.Oldman said the Church's asset committee and ethical investment advisory group will meet in September to discuss whether or not to withdraw its investment in the fund of funds that invests in Wonga.
But Oldman said the investment was of an "immaterial level" and could be compared to investing in Tesco, which "sells topshelf pornography". The Church has also banned itself from investing directly in companies that make a significant amount of money from pornography, tobacco and arms dealing.But Oldman said the investment was of an "immaterial level" and could be compared to investing in Tesco, which "sells topshelf pornography". The Church has also banned itself from investing directly in companies that make a significant amount of money from pornography, tobacco and arms dealing.
"I'm afraid that there are an awful lot of companies that we invest in that you could find something wrong about," Oldman admitted."I'm afraid that there are an awful lot of companies that we invest in that you could find something wrong about," Oldman admitted.
The Church Commissioners' latest annual report shows the Church's top five corporate investments -Royal Dutch Shell, HSBC, BP, Vodafone and GlakoSmithKline - have all been embroiled in recent scandals.The Church Commissioners' latest annual report shows the Church's top five corporate investments -Royal Dutch Shell, HSBC, BP, Vodafone and GlakoSmithKline - have all been embroiled in recent scandals.
Shell, in which the Church holds a £37.8m stake, had plans to drill for oil in the Arctic. HSBC, in which the Church has invested £32.9m, has paid a record $1.9bn fine for its role in helping drug lords launder money. Vodafone, which benefits from a £21.1m investment from the Church, has not paid UK corporation tax for two years despite making billions of pounds in underlying earnings. BP - Church stake £22.4m - is known worldwide for its role in the Gulf of Mexico oil spill disaster. While GSK - Church stake £18.2m - is embroiled in a cash and sexual bribery scandal in China.Shell, in which the Church holds a £37.8m stake, had plans to drill for oil in the Arctic. HSBC, in which the Church has invested £32.9m, has paid a record $1.9bn fine for its role in helping drug lords launder money. Vodafone, which benefits from a £21.1m investment from the Church, has not paid UK corporation tax for two years despite making billions of pounds in underlying earnings. BP - Church stake £22.4m - is known worldwide for its role in the Gulf of Mexico oil spill disaster. While GSK - Church stake £18.2m - is embroiled in a cash and sexual bribery scandal in China.
The Church also holds big stakes in controversial mining companies BHP Billiton and Rio Tinto.The Church also holds big stakes in controversial mining companies BHP Billiton and Rio Tinto.
Oldman said it was "completely unrealistic" to expect the Church to disinvest from any of the big British companies despite their unethical behaviour.Oldman said it was "completely unrealistic" to expect the Church to disinvest from any of the big British companies despite their unethical behaviour.
"It's tricky, isn't it," he said. "The whole world is controversial. We are all for changing the world, but Rome wasn't built in a day.""It's tricky, isn't it," he said. "The whole world is controversial. We are all for changing the world, but Rome wasn't built in a day."
He said the investment fund's "first priority" was to "produce a return for the church, while taking into account the ethical values of our members".He said the investment fund's "first priority" was to "produce a return for the church, while taking into account the ethical values of our members".
Oldman said the law required fund managers to prioritise making a good return on investment ahead of ethical concerns.Oldman said the law required fund managers to prioritise making a good return on investment ahead of ethical concerns.
He said the church tries to encourage companies to act ethically by engaging with management both behind the scenes and in public.He said the church tries to encourage companies to act ethically by engaging with management both behind the scenes and in public.
Oldman pointed out that the Church regularly sent representatives to News Corporation's annual meetings to try and publicly shame Rupert Murdoch in the wake of the phone hacking scandal. "In the end it became clear they were not going to change [their behaviour] so we divested," he said.Oldman pointed out that the Church regularly sent representatives to News Corporation's annual meetings to try and publicly shame Rupert Murdoch in the wake of the phone hacking scandal. "In the end it became clear they were not going to change [their behaviour] so we divested," he said.
The Church holds a lot of its money in government issued bonds, managed woodlands and a string of property holdings across the country, including the Hyde Park Estate.The Church holds a lot of its money in government issued bonds, managed woodlands and a string of property holdings across the country, including the Hyde Park Estate.
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