Boardroom coup at `the Catholic'

Chairman resigns as building society sticks to non-profit principle
EXCLUSIVE BY JOE JENKINS CHRIS JONES, the chairman of the Catholic Building Society, stood down on Tuesday in a dramatic boardroom coup.
Dr James Byrne, a director of the society and eldest son of Vincent and Nona Byrne, the society's founders, challenged Mr Jones over his continued involvement with a trust that specialised in the demutualisation of building societies, turning them into profit-making banks. As a result, both Mr Jones and Mr Byrne resigned from the board.
With assets of just £30 million, "the Catholic" is one of the country's smallest building societies, and is well known as one of the most ardent critics of demutualisation.
Mr Jones, who was appointed chairman only in May, after a year on the board, was secretary of the Cheltenham & Gloucester when in 1995 it became the first building society to convert to a bank. He is on the board of directors of the Cairngorm Demutualisation Investment Trust, launched last month with the aim of "providing investors with the opportunity to profit from future demutualisations".
After an article appeared last month in the City Diary of The Times, which revealed Mr Jones's apparent conflict of interest, tension mounted it the society. However, Mr Jones's loyalty to the ethos of the society was not openly questioned.
Before the board meeting, Francis Higgins, the Catholic's managing director, defended Mr Jones and the good work he had done at the society since his appointment as chairman. Mr Higgins told the Herald that the article in The Times was "pretty vicious" and "a thinly disguised attack on the integrity of a man who is truly professional".
But a concerned society source was less forgiving of Mr Jones and told the Herald: "He's a super guy, but you cannot run with the hares and the hounds."
In a statement issued to the Herald on Tuesday, Mr Higgins confirmed the resignations of Mr Jones and Dr Byrne and announced the appointment of Richard Shepherd, the former vice-chairman, as successor to Mr Jones. Phil Sanders, deputy chief executive of the society, was appointed chief executive.
Mr Higgins also reiterated the Catholic's commitment to mutuality. He said that the society's success and growth rate in 1997 of 12 per cent had been "helped by its vigorous pro-mutual stance and its ethical lending and investment policies" The Catholic specialises in helping low income borrowers to get on to the first rung of the housing market, irrespective of religion.
It was founded in 1969 by Vincent and Nona Byrne, with the particular aim of helping single women to buy. Many of the society's clients today are unmarried mothers.
Last year the society launched an initiative to appoint an unpaid mortgage adviser to every parish, winning the backing of Cardinal Hume.