Letter to Treasury - IceCrusher

Posted 15/11/2009 - 17:34 by IceCrusher

Letter to Correspondence and Enquiry Unit
HM Treasury

Dear Nick Dippie,

Thank you for your reply.

I had £397,000 saved in Kaupthing Bank, Isle of Man, and I believed that money to be on deposit in that nation. I have been an expat since 1992 and had been led to believe from the outset that it was imperative for an expat to hold an offshore account. For the first two years I placed my monies in the Leeds Offshore Building Society before it was bought out by the Derbyshire; I then continued to save with the Derbyshire for a further fourteen years until Kaupthing bought them out in 2007. One year later, my money was gone.

The Kaupthing Bank in the Isle of Man had an awful lot of money in it: so much liquidity, so very much desired by its UK sister branch that some 60% of the bank's total assets were moved to the UK under the guidance of the FSC - who in turn claimed that the UK's FSA had not deterred them from so doing. Many depositors shared my belief in having no idea that our money (supposedly in offshore accounts) could be moved to the UK jurisdiction in this manner - we thought that our money was in the domain of the Isle of Man, that it was secure within a highly rated bank quite apart from what was happening in the UK.

You may consider that such ignorance of financial proceedings is lamentable, but as a pilot I would counter that people put not just their money, but their very lives into an aeroplane without a passing thought to the regulation of that industry. Citizens inherently believe that proper procedures are in place to look after their best interests and passengers generally have no care or interest in whether the plane is conducting a radar positioned approach to a VORDME or self-positioning for the ILS - and who would expect them to as long as the aeroplane lands? Not everyone is an investor; most people just need to put their money somewhere safe and many like me are risk averse to do anything other than use a regular boring Building Society or a bank. When you have little interest in high finance, it is devastating to realise that the boring but safe home for your money is anything but safe, and some other entity has contrived to take your money and then goes on to ignore all pleas to put things right.

It has been said that to find the perpetrator of a foul deed then one has only to follow the money trail. The UK Government would have us believe that the Isle of Man Government, it's regulator, and the bank's directors are to blame for the loss of depositors' monies, how so? This debacle has cost the Isle of Man Government plenty and it has nothing to show for it but an outflow of deposits. The Kaupthing Bank of the Isle of Man had surplus liquidity, a solid customer base, and a very strong loan book with no toxic debt. Yet the sister bank went under administration in the UK at exactly the same time as Chancellor Darling brought into effect a power within the Anti Terrorism Crime and Security Act to freeze assets in Landsbanki Icesave; the former action retained 60% of the Isle of Man's Kaupthing branch assets within the UK bank and denied its return.

The greater part of that money was owned by ordinary retail depositors and the UK kept it. The UK representatives knew full well where that money had come from and who had put a lifetime's effort into saving it, but gave absolutely no consideration to their offshore British fellows. Darling instructed the administrators to prioritise the movement of 170,000 'Edge' customers to ING to the incalculable detriment of other creditors - especially the ordinary retail depositors of the Isle of Man. The Treasury Select Committee found that this action was instrumental in bringing down the Isle of Man branch, for without that 'considerable deposit' (Lord Turner) the Kaupthing branch in the Isle of Man was bound to cease trading.

Had the shoe been on the other foot and the UK branch of Kaupthing had deposited over a half billion pounds in the Isle of Man, I seriously doubt that the Government of the Isle of Man would have got away with placing such a huge sum under 'administration' to protect the economy and taxpayers of the Isle of Man whilst denying UK retail depositors their monies back and accusing them of being at fault for putting their savings in the UK in the first place. How happy would UK creditors be at seeing all Isle of Man retail customers get their money back - from the same branch - whilst they were made to wait over a year before receiving their first few crumbs? It is perverse, it is sick, it is despicable, unfair, undemocratic, dictatorial and imperially conceited. The UK Government took care of 170,000 Edge customers and 300,000 Icesave customers, but denied 10,000 Isle of Man customers their own money back. It was well within the Chancellor's self-appointed powers to authorise such a movement, but he spitefully chose to do otherwise - making fallacious comments regarding offshore savers to curry favour with the ignorant whilst attempting to 'justify' his deficient and deplorable behaviour.

The biggest beneficiary of the liquidation of Kaupthing assets in the UK is the Treasury and the FSCS - that is where the money trail leads. Without the offshore savers of the Isle of Man, that trail of money leading back to the UK coffers would be considerably smaller, yet even though the Isle of Man branch was the second largest creditor in the UK bank, it went without representation on the Creditors Committee - block voted out by the biggest.

Now where do offshore savers stand? We have no representation in the Isle of Man, and no MP in the UK wants even to answer our letters, let alone take up our cause. It has suited the UK Government to maintain the story of offshore tax dodgers, there being a surfeit of ignoramuses who find no fault with this ancient detraction from the truth and whose green eyes see nothing wrong in the covert theft of our hard earned savings. This UK Government pays nothing more than lip service to our plight and knows no better than the populace it pretends to lead; there is no upstanding steward of righteousness in this Government, just spin and tripe served up thick and slimy by two masters of this deceitful art.

If you hold the Isle of Man Government and it's regulator to be at fault, can depositors use that assertion against them? Will the UK Government stand beside British offshore citizens in a Court of Law and hold that they were duped and misled by charlatans of the Isle of Man who misplaced their money and cost them their life savings? If depositors had the assurance that their UK Government would do more than make mouth music of their misfortune and would otherwise be prepared to state categorically that the Isle of Man Kaupthing bank failure was completely independent of any action instigated by the UK Government and such a huge loss of private savings was entirely the fault of the Isle of Man Government, its regulator, and bank officials who brought this financial catastrophe upon retail savers - would the UK Government make such a public statement?


Your rating: None Average: 5 (32 votes)