Pyramid Building Society

The Pyramid Building Society, the Geelong Building Society and the Countrywide Building Society together made up the Farrow Group of building societies, based in Geelong, Australia. They collapsed in 1990 with debts in excess of $2 billion. The cost of the collapse to the Victoria taxpayers was estimated at over $900 million, causing a fuel levy of 3c-per-litre to be introduced by the Victorian Government to recover funds. The levy remained in force for five years.

Pyramid was established in 1959 by Vautin Andrews and Bob Farrow, with a view to helping the city grow. Andrews was later mayor of Geelong and Farrow was an accountant and his firm managed the society. When legislation changed in the mid 1960s to allow building societies to take deposits from the public Pyramid grew rapidly. When Bob Farrow's health suffered in the late 1970s his son Bill Farrow took over much of the operation, and Andrews' son Bruce Andrews also worked for the society. Pyramid took over control of its competitor the Geelong Building Society in 1971. That society had origins going back to 1867 and had been operated very conservatively.

In 1983 the rules for Pyramid and Geelong were changed to allow shares representing ownership of the societies to be issued, and the Farrow Group controlled by the Farrow family asserted that they as managers should get most of them. After the collapse the basis for this assertion was disputed, but Farrow ended up as owner of a substantial business for a very modest outlay of money. In 1984 the Farrow Group also took over the small Third Extended Starr-Bowkett Building Society and renamed it the Countrywide Building Society. At the time of the collapse the group was headed by Bill Farrow and former Geelong Football Club player David Clarke.

In early 1990 there was a sudden run on Pyramid as depositors rushed to withdraw their money. The reasons behind this were never established, though it was suspected some rumours might have been started by rival institutions. On 13 February 1990 the state treasurer Rob Jolly and attorney general Andrew McCutcheon held a press conference and assured the public that Pyramid was sound, all but telling them to stay in. In fact Pyramid wasn't sound, but the office of the Registrar of Building Societies hadn't been particularly assiduous and so didn't know that.

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