DST UPDATE 16.06.2009

DEPOSITORS ACTION GROUP STRATEGY TEAM
We are using the current lull in activity to reorganise the team into more specifically defined areas of responsibility to best prepare ourselves for the new requirement of dealing with the Liquidator, Creditor Committee (CC) and DCS Scheme.

The major consequence of this reorganisation is a Proposal to formalise the DAG into a Company limited by guarantee. A company limited by guarantee is a limited liability company which has members rather than shareholders. All verified depositors and bondholders of KSFIOM are eligible to be members. Each registered DAG member is required to provide a guarantee for the nominal amount of £1, that would only be payable in the unlikely event that the company is wound up and could not meet its obligations.

The need for a limited Company has come about as a consequence of the strict requirement of appointment to the Creditors’ Committee where all members must sign a confidentiality agreement whereby the only advisor able to be consulted would be a legal advisor. The DST’s representative would therefore consult with Edwin Coe LLP.

Members of the new DAG company will be asked to register providing proof of being a depositor, bondholder or Trustee Account etc., this could take the form of the letter that accompanied the proxy form or letter canvassing opinion from Life Company or in the case of no documents (perish the thought) your last KSFIOM bank statement (which we guarantee to destroy after receipt) or Life Company document verifying your status. In all cases we would ask that you inform us of your Account Balances (in each currency) allowing us to assess the strength of our voting value for instance in the forthcoming Creditor Committee vote. Naturally all information is strictly confidential and accessible only to DST members on a need to know basis.

If you previously registered your ‘Stuart Roberts’ proxy vote with DAG at Edwin Coe LLP, prior to the voting on the SoA you will only need to confirm your wish to be a member and your details will be verified from our database. More information will be given out on this procedure in due course. The benefits to becoming a member of DAG are as follows:
• Free membership
• As a member you will be added to the mailing list to be provided with all updates
• As a member you will have better representation on the CC by being represented by DAG nominee who will have Edwin Coe for support
• As a member you will have the ability to submit questions to DST
• As a member you will have the ability to influence or request focus or review of legal actions
• As a member you will be involved in influencing the overall outcome by supporting Lobbying and PR
• As a member you will be able to access the new Members-only discussion/chat site. As this site is restricted to genuine depositors and bondholders we will be able to provide more information than we have been willing to publish on the public site. We also expect the standard of discussion between genuine, verified depositors and bondholders to be of a higher standard than we have seen on the chat site.
• You may resign from membership of the company at any time
The site will be reorganised slightly to make it much easier for members to navigate and will focus on support, productivity and information with the aim to focus on our primary objective of 100% restoration of our funds, while simultaneously ensuring we get the best outcome from Liquidation and DCS procedures.

The new structure will be reflected in the team reports that now feature in what will become a regular e-mail to all company members.

Further information on these proposals will be the subject of an update in the next 7 days.

LEGAL TEAM
Legal team presently dealing (among other things) with:
• Correspondence with FSC (KPMG) to clarify certain DCS issues
• Correspondence and other communications with PWC to clarify various creditor voting and creditors' committee issues
• Brief for counsel to appear at the next hearing; consideration of applications to the court that may have to be made in respect of DCS
• Consideration of complaints made about current (provisional) liquidators' handling of the SoA costs issue and numerous other matters complained of
• Consideration of proposals to replace present liquidators or introduce an additional firm
• Meetings with proposed alternative firms that could handle the liquidation

Links to correspondence with FSC:
http://www.ksfiomdepositors.org/public-page/dcs-scheme-manager-correspon...

http://www.ksfiomdepositors.org/public-page/dcs-scheme-manager-correspon...

http://www.ksfiomdepositors.org/public-page/edwin-coe-correspondence-dcs...

Details of the creditors committee representative/s will be sent out shortly. As always the representation will be supported by DAG appointed lawyers Edwin Coe.

THE DCS (Depositors Compensation Scheme)
As you will see from the correspondence between Edwin Coe and the DCS Scheme Manager there is not yet clarity on the numerous issues raised by Edwin Coe but specifically:...

• Regarding the requirement to assign the full amount of deposit as opposed to only £50k DCS claim with the consequent impairment of depositors voting value at the 7th July creditors meeting.
• reassignment of remainder of funds after payout of the DCS
• Why have creditors been asked to complete & return DCS claims by June 30th with the resulting impact on the assignment of votes and the creditors committee
On the basis of the figures as we understand them right now there is due a 14.5% dividend under liquidation. The DCS will pay out £50k (less EPS payment), therefore we believe the following to be the only guidance that can be given:
1. Any deposit less than £50k should claim under DCS
2. Any deposit between £50k and £345k are possibly better claiming under DCS but should consider carefully that without concession on the reassignment of the remaining value of the deposit (after the first £50k is paid out), it would be assigned to the FSC.
3. Any deposit more than £345k should claim under liquidation dividend
As many of you are aware the judgement on the Habana case (in-flight funds) is imminent and there is a possibility that the positive outcome of this case may have an impact on the first dividend under liquidation, but would not effect the payment under DCS.

PR LOBBY TEAM
The objective of the PR/Lobby Team has been to continually highlight the plight of depositors with the aim to achieve 100% return of money to all depositors. The Team have sent numerous press releases to General, Trade, and Financial press that can be found on the public site no later than 48hrs after distribution at http://www.ksfiomdepositors.org/view/content/detail?type=press_release . There have also been briefings with specific journalists for National newspapers. If you are have any media leads you think will be helpful please email us at KSFIOMPress(?)googlemail [dot] com

The Team have continued to lobby political entities with correspondence having been sent to members of the TSC the MoJ and specific MPs with blanket to all MPs. Briefings and meetings have taken place with individual MPs and this activity continues, however we stress the importance of each of us engaging our own MP by meeting or at their weekly surgery to push for an Independent Public Inquiry. We are grateful to those of you who have shared your useful MP responses with us, please continue to do so by sending copy to KSFIOMPolitical(?)googlemail [dot] com

A document was sent as input to the Foot report; review of offshore centres, this document has also been used as a basis to lobby institutions and associations. Correspondence continues to be sent to IOMBA, MIA, IPA, IAIS, IOSCO, OGBS, OGIS and supportive MHKs. PR/Lobby Team have also been responsible for canvassing for support for DAG place on Creditors Committee.

If anybody feels their personal story has changed since last sent to us and would make an poignant case study please send to
KSFIOMCaseStudies(?)googlemail [dot] com

Recent Press Releases
http://www.ksfiomdepositors.org/press-release/political-opportunity-poli...

http://www.ksfiomdepositors.org/press-release/ksfiom-dag-defeats-isle-ma...

http://www.ksfiomdepositors.org/press-release/offshore-bonds-offer-none-...

RESEARCH, ANALYSIS & SUPPORT TEAM
The RAS Team have continued to provide support within the DST researching foundation for correspondence, keeping the Team up to date with political developments and National and International news stories. All KSFIOM related news stories can be found on the Public Site at http://www.ksfiomdepositors.org/view/content/detail?type=news_item .

The RAS Team are currently analysing the conference calls with Mike Simpson, researching for the creditors committee work, and working with the DAG Treasurer to formalise the DAG which will happen as soon as is possible.

The RAS team are grateful for the abundance of informative emails sent in for the DST via either the contact form on the site or these addresses.

KSFIOMStrictlyConfidential(?)gmail [dot] com
londonteamksfiom(?)gmail [dot] com
ksfiombonholders(?)googlemail [dot] com
ksfiomwhistleblower(?)gmail [dot] com ,

COMMUNICATIONS TEAM
The Comms Team will be responsible for the interface between depositors and the Strategy Team in a number of ways.
• Publication of (more) regular updates via e-mail to registered members
• Through this e-mail address KSFIOMDSTcontact(?)googlemail [dot] com . depositors can ask questions of the Strategy Team or bring to our attention any issues you feel we may have overlooked
• Handling the membership verification process—Details will follow in a separate Update within a few days (be assured the 3 volunteers involved in this process will observe the strict confidentiality of information.

VOLUNTEERS REQUIRED
We need a couple of volunteers who between them could transcribe 4 of the conference calls with the Liquidator Provisionally so that the Strategy Team could analyse them in time for the Creditors meeting on July 7th. There is some free downloadable software available to help with this task.

If you can help please e-mail us at KSFIOMDSTcontact(?)googlemail [dot] com