Anglican head embarrassed after church linked to loan firm he attacked

(Photo: REUTERS / Luke MacGregor)A passenger sits on a bus beneath an advert for short term loan company Wonga in London December 18, 2012.

The Church of England was reminded this week of how complex ethical investing can be.

Its senior cleric Archbishop Justin Welby found out the Anglican church had investment links to a short-term loan company he had only days before pledged to drive out of business.

"It shouldn't happen, it's very embarrassing, but these things do happen and we have to find out why, and make sure it doesn't happen again," said Welby.

The Archbishop of Canterbury is also spiritual leader of the 80 million-strong worldwide Anglican Communion was speaking in an interview with Britain's national broadcaster, BBC radio on Friday.

Welby said in his interview he was annoyed to learn the Church of England holds an indirect stake in Wonga, the lender he promised to bring down through fairer competition.

He said he was not happy with he investment company handling the church's ivestments, noting, "They shouldn't be investing in Wonga. We don't think that's a good thing."

Regarding the church's investment practise Welby said, "My own view is that that is probably too high a level. But it is an ethical investment advisory group, I don't have the authority to tell them what to do."

Wonga this month lifted its annual interest rate on loans to 5,853 per cent, and his attack on the company garnered widespread support among a public who view the lenders actions as exploiting poorer families who are encumbered already by debt.

His launched his attack on what are called "payday" lenders that charge very high interest rates on short-term loans which borrower normally can aim to repay after they receive their wages, but was later embarrassed to learn of the church's investment in the company he attacked.


The Financial Times newspaper reported that the Anglican church's 5.5 billion British pounds ($8 billion) pension fund indirectly invested in a company that led Wonga's 2009 fundraising.

Welby is a former oil executive and a member of Britain's Banking Standards Commission.

Despite the revelation he said he said would proceed with his campaign to compete with, and eventually knock out of a business the company he says is "morally wrong."

The archbishop called for the Church of England to rethink its investment guidelines.

Welby said the holding in the company called Accel was worth about 75,000 pounds.

He added: "I was irritated for a few minutes, but these things happen. I understand the business - it's an incredibly complex business."

The archbishop said he not sure if the Accel investment broke church guidelines, one of which stipulates that money should not be put into companies where 25 percent or more of its business is connected to such lending.

He added, "They shouldn't be investing in Wonga. We don't think it's a good thing."

Welby stood by his attack on a sector that has thrived during the current austere times in Britain where government policy has cut spending and real-time falling wages have made life difficult for many families.

"I've seen it, I've lived in these areas and worked in them. I've had staff who've got caught up in it and had to be helped, and had their lives destroyed by it. This is something that really matters to me," he noted.

Before Welby's attack Wonga had been embroiled in the refusal of Papiss Cisse, a soccer player with the English Premier Division's Newcastle United club and a practicing Muslim, to wear a shirt bearing the name of the lender, which is the club's sponsor.

Cisse was reported on Thursday to have agreed to do so, Newcastle announced

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