Group is formed for West Bromwich fight

Investors who face losing thousands of pounds from the deal to rescue West Bromwich Building Society have formed an action group to fight the changes.

Shareholders who bought £75 million of Permanent Interest Bearing Shares (PIBS) were originally guaranteed an interest rate of 6.15 per cent but it is 1.5 per cent for the next half-year under new terms as part of a refinancing deal. The society was rescued by a restructuring agreement worked out with the Financial Services Authority after £39.3m losses last year.

About 10 shareholders from around the country turned up to a meeting at the Fairlawns Hotel, Aldridge, on Saturday to form a new committee and discuss plans to fight the changes, backed by the UK Shareholders Association (UKSA), claiming that they were unfairly treated in the deal.

West Bromwich Building Society has said that the majority of PIBS holders who attended an official meeting on Friday had already voted in favour of the changes.

Committee spokesman Peter Morgan, an accountant from Cheshire, said: "The society still refuses to acknowledge its wholly unfair and high-handed treatment of privately held PIBS and the destabilising effect its actions have had on the whole PIBS market.

"The committee has lodged formal complaints on behalf of all West Brom PIBS holders with all relevant regulatory bodies and through Parliament. Discussions are ongoing," he added.

West Bromwich Building Society declined to comment on Saturday's meeting as they had not been involved, but said other PIBS holders had voted to endorse the variations on Friday.

Chief executive Robert Sharpe said: "We are pleased that PIBS holders have supported these variations to the PIBS conditions, as it will result in the Society avoiding additional costs, and hence benefit all members."

PIBS are fixed-income binds issued by building societies to raise money and were traditionally seen as a safe investment, making them popular with people looking to finance their retirement.