A credit union has been liquidated amid concerns reported to the authorities which are being investigated.
South Birmingham Community Credit Union Limited (“SBCCU”), trading as Communisave, has gone into liquidation following an order issued by the High Court.
Guy Mander and Graham Bushby of Baker Tilly Restructuring and Recovery LLP have been appointed liquidators of SBCCU.
It is the second time this year that Mander and Bushby have been asked to liquidate an insolvent credit union.
In April, they were appointed liquidators of Marches Credit Union, which was also liquidated by the High Court amid ongoing investigations.
Subsequent court documents revealed Marches Credit Union was liquidated following a suspected embezzlement by a former director who is believed to have attempted suicide, but Baker Tilly said it could not provide further information on the SBCCU appointment.
SBCCU had approximately 2,100 members and junior savers across South Birmingham, Bromsgrove and Redditch.
In a statement, Baker Tilly said SBCCU had also been impacted by a lack of growth in the loan book, an increase in bad debts associated with its loan book and a fall in its investment income.
The credit union can no longer accept deposits or allow members to withdraw monies or make loans.
However, the Financial Services Compensation Scheme (“FSCS”) has confirmed to the liquidators that members’ deposits/savings will be protected and that they will aim to reimburse members/junior savers within seven days of the winding up order.
Mander said: “We have immediately written to all members and junior savers to provide them with information as regards the Financial Services Compensation Scheme, details of an alternative local credit union and suggested practical steps they may wish to take to minimise the impact of the closing of SBCCU.”
By Alex Cardno