asked the Minister for Industry, Trade, Commerce and Tourism the steps he proposes to take to deal with the recent collapse of provident societies and investment companies resulting in substantial losses of depositors' money.
Ceisteanna—Questions. Oral Answers. - Provident Societies.
1.
I would refer the Deputy to the debate in Private Members' Time on 14 and 15 February 1984 which dealt with the issues raised in the Deputy's question.
As the Deputy will be aware, an amended motion put down in my name and in the name of the Minister for Finance calling on Dáil Éireann to note that deposit taking institutions are subject to statutory regulations and that it is the intention of the Government to take such further steps as it may consider necessary to strengthen control in this area, was agreed. In the course of the debate the Minister for Finance and I indicated certain areas which were being looked at. I have nothing further to add in the matter at this stage.
Is the Minister aware of the continuing anxiety in the minds of thousands of small investors whose money is at risk because it was invested in the society named in the Dáil debate? Would he indicate for the benefit of the general public if any profits have been made so that those small investors can be guaranteed repayment?
The position is that during the seventies it became a practice for the provident societies to take deposits because these societies were exempt from the controls that applied to deposit taking institutions generally under the Central Bank Act. Since 1978 legislation has been introduced with a view to eliminating such societies over a five-year period because it was felt that such societies represented a serious danger to the security of depositors' savings due to the absence of controls. At the time of the 1978 legislation and since, warnings were given to people that it was not in their best interests to place investments with societies which did not have the relevant assurance provided in the Central Bank Act. Court cases have been taken in regard to the validity of the legislation. Efforts are being made to wind up the societies. Many of them have gone out of business and it is expected that the remainder will be wound up in the reasonably near future.
This is a very important issue because there are many thousands of small investors who are continually writing to Deputies, including me, in the hope that the Minister might give them some hope that their deposits will be returned. How many societies have been wound up, how many remain to be wound up and can the Minister say if any direct action has been taken since the society we are talking about came to prominence a short time ago? Does he know it is common knowledge that that society was and would still be viable if it were not for difficulties in another area in which they had a joint interest? Will the new Central Bank Bill make provision whereby the depositors can be indemnified against losses they might suffer because of that collapse?
I do not think it will. The position in regard to the society referred to has been dealt with. Considering the warnings that were given over an extended period it would not be appropriate to ask the taxpayers to recoup investments made by people despite those warnings. There is no intention to move in that direction. However, legislative proposals are in train in regard to the new Central Bank Bill which will improve safeguards in future in respect of deposit taking by various institutions and individuals. There is also the possibility of legislation to control such activities by insurance brokers.
How many such societies still remain to be wound up?
I do not have that information. There is a significant number.
Can the Minister send me the information?
I will.
Does he hold out any hope that PMPA depositors will get their investments back?
I do not think I should comment on that.
What is the current position in regard to legal action?
The Deputy should put down a separate question if he wants to obtain such particular information.
Questions Nos. 2 to 4, inclusive, have been postponed.
How can a Deputy put back questions? What is the formula used?
If the Deputy wishes to have questions postponed he should notify the General Office or my office.