C&G choice demand: Vivien Goldsmith on the search for alternatives to Lloyds

A PROTEST group has asked more than 100 supporters to back a call for a special general meeting to question the takeover of Cheltenham & Gloucester Building Society by Lloyds Bank.

C&G Alternatives wants the society to present members at the special meeting with a choice of possible courses of action - including remaining a mutual society, converting to a quoted company, and seeking an improved offer from Lloyds or other bidders.

The group, which is using offices in Covent Garden, London, is suggesting a pounds 5 donation. 'But it is not essential and is certainly less important than your support.'

To call a special general meeting 100 signatures are needed from members of at least two years' standing. They also have to put up pounds 10 each as a deposit. If, after half an hour of the meeting time, a quorum of 125 members is not present, the deposit will be forfeited. Otherwise the meeting decides whether the money should be appropriated by the society to go towards the costs of calling and holding the meeting. There is no recent case of building society members calling a special general meeting.

The proposed pounds 1.8bn take- over of Cheltenham & Gloucester by Lloyds Bank, involving special bonus payments to savers and borrowers, was challenged in the High Court by the Building Societies Commission. The Vice-Chancellor, Sir Donald Nicholls, ruled that payments to mortgage borrowers and savers of less than two years standing were unlawful.

C&G and Lloyds are considering an appeal and are also looking at ways of restructuring the payments to come within the terms of the law.

The letter says: 'We support the principle that ways should be found for the Membership to benefit from the commercial success of C&G. It is essential not to frustrate or deny any alternative, including the Lloyds bid, prematurely. Instead, we seek to widen the debate to ensure that all the alternatives are properly evaluated and the wishes of the membership prevail.'

The letter includes space for supporters who have already contacted the group and will be receiving the letter, to suggest names of others who would be interested in joining the debate about the C&G's future.

The Building Societies Members' Association which supports the idea of societies remaining mutual, is holding a meeting at the weekend at which the C&G takeover will be discussed. David Siedlaczek, the association's research officer, said it would consider whether the C&G Alternatives group fitted with its philosophy.

C&G has stopped opening new accounts. This will prevent people opening accounts merely to become members with the - probably vain - hope of sharing in any new payment scheme. A spokeswoman for the society said this week it was considering reopening for new customers.

Existing customers have been able to use their accounts normally. Savers should keep all their accounts open, and should try to keep balances as high as possible.

C&G Alternatives, 7 Floral Street, London WC2E 9DH