This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/business/2013/jul/26/wonga-wellcome-trust-payday-lender

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Wonga poached Wellcome Trust manager after £73m investment Wonga poached Wellcome Trust manager after £73m investment
(2 months later)
Wonga, the leader of the group of payday lenders that the Archbishop of Canterbury claims have "destroyed" the lives of some of his staff, poached an investment manager from the Wellcome Trust just months after she secured for Wonga a multi-million pound investment from the health research charity.Wonga, the leader of the group of payday lenders that the Archbishop of Canterbury claims have "destroyed" the lives of some of his staff, poached an investment manager from the Wellcome Trust just months after she secured for Wonga a multi-million pound investment from the health research charity.
Lizzie Chapman, who as the Wellcome Trust's manager of direct private investments played a key role in persuading the charity to invest in a £73m funding drive for Wonga, quit Wellcome for Wonga just four months after her previous employer handed over the cash to her new bosses.Lizzie Chapman, who as the Wellcome Trust's manager of direct private investments played a key role in persuading the charity to invest in a £73m funding drive for Wonga, quit Wellcome for Wonga just four months after her previous employer handed over the cash to her new bosses.
At the time of the investment in February 2011, Wonga boasted that getting "more respected investors on board shows how much we have achieved in a relatively short space of time but, more importantly, it's a sign of how much more we are going to achieve in the future".At the time of the investment in February 2011, Wonga boasted that getting "more respected investors on board shows how much we have achieved in a relatively short space of time but, more importantly, it's a sign of how much more we are going to achieve in the future".
The latest revelation in the Wonga controversy comes as Justin Welby said his intense embarrassment over the church's accidental investment in Wonga would not divert him from his mission to create better alternatives to payday lenders.The latest revelation in the Wonga controversy comes as Justin Welby said his intense embarrassment over the church's accidental investment in Wonga would not divert him from his mission to create better alternatives to payday lenders.
Welby said on Friday he was "very embarrassed" to discover that the church, which recently added payday lenders to its list of prohibited investments, holds an £75,000 investment in Wonga via a complex series of venture capital funds.Welby said on Friday he was "very embarrassed" to discover that the church, which recently added payday lenders to its list of prohibited investments, holds an £75,000 investment in Wonga via a complex series of venture capital funds.
Welby, a former oil industry boss and member of the Banking Standards Commission, had said he wanted to compete Wonga "out of existence" by joining forces with credit unions.Welby, a former oil industry boss and member of the Banking Standards Commission, had said he wanted to compete Wonga "out of existence" by joining forces with credit unions.
Explaining his determination, Welby said: "I've had staff who've been caught up in it [owing vast amounts of money to payday lenders] and have had to be helped, and have had their lives destroyed by it. This is something that really matters to me."Explaining his determination, Welby said: "I've had staff who've been caught up in it [owing vast amounts of money to payday lenders] and have had to be helped, and have had their lives destroyed by it. This is something that really matters to me."
He told the BBC his level of embarrassment over the church's Wonga investment was "about eight" out of 10, and vowed that similar investments must never happen.He told the BBC his level of embarrassment over the church's Wonga investment was "about eight" out of 10, and vowed that similar investments must never happen.
He also admitted to the BBC that church-backed lenders could demand annual interest rates of up to 80%. He admitted that was high but argued it was better than the rates at payday lenders. "We think you can probably do it for an equivalent annual rate of about 70 or 80%. It's a huge sum of money but it's better than 5,500%, " he said.He also admitted to the BBC that church-backed lenders could demand annual interest rates of up to 80%. He admitted that was high but argued it was better than the rates at payday lenders. "We think you can probably do it for an equivalent annual rate of about 70 or 80%. It's a huge sum of money but it's better than 5,500%, " he said.
The business secretary, Vince Cable, told 5 News that the archbishop had "hit the nail on the head" with his opposition to payday lenders.The business secretary, Vince Cable, told 5 News that the archbishop had "hit the nail on the head" with his opposition to payday lenders.
Boris Johnson, the mayor of London, "thoroughly congratulated" Welby on Friday for his "drive and vision" offering an alternative to high-interest-rate lenders in an interview on LBC radio.Boris Johnson, the mayor of London, "thoroughly congratulated" Welby on Friday for his "drive and vision" offering an alternative to high-interest-rate lenders in an interview on LBC radio.
Wellcome invested alongside venture capital funds Oak Investment Partners, Meritech Capital Partners, Accel Partners, Balderton Capital, Dawn Capital, Greylock Partners and TAG in a £73m round of funding in February 2011.Wellcome invested alongside venture capital funds Oak Investment Partners, Meritech Capital Partners, Accel Partners, Balderton Capital, Dawn Capital, Greylock Partners and TAG in a £73m round of funding in February 2011.
Chapman, who switched from the charity to the 5,853% APR lender in June 2011, is now in charge of Wonga's plans for global expansion.Chapman, who switched from the charity to the 5,853% APR lender in June 2011, is now in charge of Wonga's plans for global expansion.
She is also head of Wonga in India, and has recently been on a tour of the country promoting the highly controversial payday lender to some of the world's poorest people.She is also head of Wonga in India, and has recently been on a tour of the country promoting the highly controversial payday lender to some of the world's poorest people.
Wonga refused to comment on the circumstances surrounding her appointment.Wonga refused to comment on the circumstances surrounding her appointment.
The Wellcome Trust said: "We can confirm that Lizzie Chapman was a mid-ranking member of our investments division who left over two years ago. We do not see any conflict of interest in her subsequent decision to work for Wonga."The Wellcome Trust said: "We can confirm that Lizzie Chapman was a mid-ranking member of our investments division who left over two years ago. We do not see any conflict of interest in her subsequent decision to work for Wonga."
Wellcome, which describes itself as a "global charitable foundation dedicated to achieving extraordinary improvements in human and animal health", refused to comment about the ethics of investment in a high-interest-rate lender.Wellcome, which describes itself as a "global charitable foundation dedicated to achieving extraordinary improvements in human and animal health", refused to comment about the ethics of investment in a high-interest-rate lender.
Sir Mark Walport, former director of the Wellcome Trust and now the government's chief scientific adviser, has previously defended the investment in Wonga.Sir Mark Walport, former director of the Wellcome Trust and now the government's chief scientific adviser, has previously defended the investment in Wonga.
"We have found the company to be extremely engaging and always willing to listen to feedback," he said in a letter to Stella Creasy, a Labour MP and vociferous campaigner against payday lenders, in 2011."We have found the company to be extremely engaging and always willing to listen to feedback," he said in a letter to Stella Creasy, a Labour MP and vociferous campaigner against payday lenders, in 2011.
The trust, which says its "vision is to achieve extraordinary improvements in human and animal health", has a £14.5bn investment portfolio and is the country's biggest non-governmental funder of scientific research.The trust, which says its "vision is to achieve extraordinary improvements in human and animal health", has a £14.5bn investment portfolio and is the country's biggest non-governmental funder of scientific research.
Wellcome's board of governors includes the former MI5 boss Eliza Manningham-Buller and Damon Buffini, the former boss of the private equity firm Permira and business adviser to the former prime minister Gordon Brown.Wellcome's board of governors includes the former MI5 boss Eliza Manningham-Buller and Damon Buffini, the former boss of the private equity firm Permira and business adviser to the former prime minister Gordon Brown.
The Office of Fair Trading estimates there were 8.2m new payday loans issued in the 2011/12 financial year (the latest available), with an average of £270 borrowed for 30 days.The Office of Fair Trading estimates there were 8.2m new payday loans issued in the 2011/12 financial year (the latest available), with an average of £270 borrowed for 30 days.
At Friday's rates, Wonga would require the borrower to pay back £358.15 after 30 days on a £270 loan – nearly 33% more than the original sum.At Friday's rates, Wonga would require the borrower to pay back £358.15 after 30 days on a £270 loan – nearly 33% more than the original sum.
The London Mutual Credit Union, the kind of lender Welby says he wants to support, would charge £286.40, although it is only open to people living in specified areas of the city.The London Mutual Credit Union, the kind of lender Welby says he wants to support, would charge £286.40, although it is only open to people living in specified areas of the city.
Our editors' picks for the day's top news and commentary delivered to your inbox each morning.