Appeal for Common Decency

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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Posted: Fri, 08/05/2009 - 16:33

Inspired by expat's recent blog http://chat.ksfiomdepositors.org/blog-entry/open-letter-gordon-brown, I have written a letter in support of his "Appeal for Common Decency" - an open letter to Gordon Brown.

But now what can I do with it?

Expat - you seem to have emailed your's to a Treasury address (but I thought he was the PM!). The form on Downing Street's website allows only 1000 characters... I could send it by post...

Suggestions welcome.

Thanks

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Letter to Fiona MoJ

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Wed, 08/07/2009 - 10:41

Dear Fiona Salem,
I sent the letter that follows to Selena Bailey (SB) of the MoJ five months ago and have received no reply to date. I note that in comparison, you act graciously and accord depositors the respect of a timely written reply and would ask that you similarly favour a reply to me. (Please Fiona, no trite answers or quick quips.)

[Sent to Selena Bailey]
I have read your letter to a fellow KSF depositor and trust that you will allow me this reply. I would be most grateful if you would kindly consider my responses to your statements below, and forward this letter to the Secretary of State for Justice the Right Honourable Jack Straw for his further deliberation and hopefully, a comprehensive reply.

SB: The Ministry of Justice, is the UK Government Department with responsibility for managing the UK's relationship with its Crown Dependencies (Jersey, Guernsey and the Isle of Man). I would like to assure you that the ministerial teams in both the Ministry of Justice and the Treasury sympathise with all those depositors who funds caught up in the crisis with the Icelandic banks and that, in line with the UK's constitutional responsibilities, Treasury is representing the interests of the Isle of Man in negotiations with the Icelandic authorities.

DH: Thank you, but what is sympathy? If I were to run my car into another, would the other driver be satisfied by my declaration of sympathy for his loss – even though I refuse to reimburse his damage? What if he were a foreigner and although the incident was my fault, I told him that I was not prepared to pay for damages because he comes from another jurisdiction? Would he thank me and graciously accept nothing more than my sympathy? What if his passenger had lost a limb in the collision; would the other driver be liable for this loss, or me? Or perhaps it could be held the passenger's fault for being in that car when I so carelessly ran into it?

As the MOJ is the department responsible for Crown Dependencies, can someone kindly explain why the MoJ has disposed of this duty to the Treasury when this surely represents a conflict of interests? Iceland has already been granted an IMF loan thus severely reducing anypossible leverage upon the former to compensate KSFIoM depositors. No word of these depositors has been made in any discussion or press release relating to the IMF loan – although much mention has been made of the European and UK depositors who have been so readily reimbursed.

HMG's intervention in the UK indirectly caused KSFIoM to have its licence suspended; the Icelandics could reasonably argue that they cannot be held responsible for the KSFIoM bank's demise as before HMG's action that bank was operating well within its capabilities and indeed, had greater assets than liabilities. Why then would the Icelandics agree to compensate KSFIoM depositors under these circumstances? Is that why nothing has been heard in this regard? What is the position now? Exactly how is the Treasury representing Isle of Man interests to the Icelandics? What does it expect to achieve and when? How does the Treasury intend to argue that the provisional liquidation of KSFIoM is the fault of the Icelandics when it was a consequence of the Administration of KSF UK?

Even if the IoM bank had deposited £5 billion of illiquid assets with KSFUK it could still have had its licence withdrawn. If this had been the case and 500,000 UK depositors were at risk, would HMG still be sitting on its laurels claiming rules and regulations? Or would it put first things first and take care of the interests of retail depositors as a matter of priority? The espoused rules theoretically allow for innumerable banks to place £billions of non-cash assets belonging to millions of depositors into one branch which could then be brought under Administration bringing down all those other banks with it. Would the consequences of such financial devastation prove acceptable to the UK Government?

The Prime Minister is capable of compassionate concern – as demonstrated when he called upon the US in September 08 to return £8 billion allegedly owed to Lehman UK (sent for an overnight stay in New York and not returned) for the benefit of workers and creditors in that failed company. However, Mr Brown does not seem to recognise that his attitude towards the Isle of Man places him in a rather similar position to those American brethren. What a contradictory comparison is cast when the Prime Minister clearly discerns the speck of sawdust in 'Brother Lehman's' eye, but fails to see the wooden beam in his own…

SB: You may find it helpful if I set out some details of the relationship between the UK and the Isle of Man before I address your specific concerns. The Isle of Man (like its sister Crown Dependencies) is not part of the UK but is a self-governing dependency of the Crown. It has its own directly elected legislative assembly, administrative, fiscal and legal systems and its own courts of law. The Isle of Man is not represented in the UK Parliament and UK legislation does not extend to it. The UK Government is constitutionally responsible for the defence
and international representation of the Isle of Man.

DH: I would humbly submit that your explanation of the relationship is a little thin on a few major points; the Isle of Man may well self-govern its own insular affairs, but UK legislation can certainly be extended to it. Your own Lord Willy Bach would be fully aware of this sovereign responsibility given that he replied to Baroness Strange in May 2003 about this very aspect. (See below.)

Under British law, the Isle of Man is a Crown dependency and not an integral part of the United Kingdom. However, the UK takes care of its external and defence affairs, and retains paramount power to legislate for the Island.

The Parliament of the United Kingdom has paramount power to legislate for the Isle of Man on all matters but it is a long-standing convention that it does not do so on domestic ('insular') matters without Tynwald's consent. The mechanism by which the Crown normally applies UK legislation is the Privy Council. To extend UK legislation in this way, it would first require a 'permissive extent clause', which takes the following form: Her Majesty may, by Order in Council, direct that any provision of this Act shall extend, with such exceptions, adaptations and modifications, if any, as may be specified in the Order, to the Isle of Man. However, the convention of obtaining consent is only moral, not legal.

The UK Government justifies this ability to intervene in Manx affairs by pointing to the responsibility of the British Crown for the 'good government' of Man. This was the subject of a written exchange on 3 May 2000 in the House of Lords: In response to a Written Question by Baroness Strange enquiring as to the meaning and scope of the Crown's responsibility for the good government of the Crown Dependencies, Lord Bach, for the Government, replied 'The Crown is ultimately responsible for the good government of the Crown Dependencies. This means that, in the circumstances of a grave breakdown or failure in the administration of justice or civil order, the residual prerogative power of the Crown could be used to intervene in the internal affairs of the Channel Islands and the Isle of Man. It is unhelpful to the relationship between Her Majesty's Government and the Islands to speculate about the hypothetical and highly unlikely circumstances in which such intervention might take place.' If the UK Parliament was unable to impose legislation upon the Isle of Man it would have 'responsibility without power'.
(http://en.wikipedia.org/wiki/Foreign_relations_of_the_Isle_of_Man)

With the foregoing in mind, it is important to note that the UK is ultimately responsible for the Island's sovereign debt – the bank of last resort must surely be the Bank of England. Given the Government's ultimate responsibility for the good governance of this Crown Dependency, why does the Ministry of Justice condone and justify the continued operation of a multi-billion pound financial sector knowing that the Island has no money in its so-called Depositors Compensation Scheme (DCS) and no guaranteed means of raising monies of the magnitude required to properly compensate depositors in a timely manner? Levies are not required from participating banks until one of their number fails; this scandalous situation is a disaster waiting to happen (and already has precedent). The Island has a small population of 80,000 and the Domestic Government has demonstrated no capacity or willingness to burden Island taxpayers with a significant tax fund reserve for such a financial calamity. Being a non-sovereign state, the Island may not of its own accord incur significant debt to borrow its way out of such a situation. The MoJ has primary constitutional responsibility for maintaining civil order - and claims a good working relationship with the Island - yet turns a blind eye to this glaring inadequacy and allows the Isle of Man to continue its banking operation in a manner that would shame a local Post Office, let alone a major Offshore Financial Centre (OFC). HMG put a stop to Pirate Radio in the Isle of Man; is the recovery of thousands of citizens savings any less worthy?

Can Lord Bach explain why his department appears to have been so remiss in its duties in this regard? Can he explain why Mr Patrick Bourke told the Justice Committee Meeting that he was unqualified to represent the Isle of Man in discussions with the Icelandics? Was Mr Bourke the only MoJ person available? Why did a senior MoJ minister not represent the Island's constitutional rights in those critically important discussions undertaken during a severe banking crisis? What could possibly have craved greater attention at that time?

SB: My understanding is that Kaupthing Bank, hf and Icelandic bank, operated a number of companies including Kaupthing, Singer & Friedlander UK (KSFUK) and Kaupthing, Singer & Friedlander Isle of Man (KSFIoM). Both KSFUK and KSFIoM were subsidiaries of the parent bank in Iceland. The business models of many banking operations in the Crown Dependencies involve the practice of upstreaming deposits for treasury management by the parent company. In practice this means that banks incorporated in the Crown Dependencies deposit an amount equal to a significant portion of their deposits they receive from customers with their parent company. In the case of KSFIoM, significant sums had been deposited with its sister company, KSFUK. Importantly, money that a customer had placed with a bank on deposit (including with a sister company) belongs to the bank in which it had been placed. The customer only has a debt claim against that bank. A bank that has received money on a deposit may chose to place this money with a second bank; in this case, the bank effectively placing its own money with the second bank. The customer that placed the original deposit does not have any direct legal claim to the deposit with the second bank. This is the position with yourselves (and many other depositors) are in, in relation to funds they deposited with KSFIoM.

DH: You have omitted to mention the most obvious and critical aspect of this issue –that KSFIoM was brought down as a consequence of an intervention conducted by HMG against Icelandic banks operating in the UK. The Isle of Man had no use for a power within the Anti Terror Crime and Security Act - it was HMG's decision to freeze IceSave accounts operating under the Icelandic regulator (FME) within the UK's jurisdiction and publicly announce that HMG was freezing 'all' Icelandic assets in the UK. HMG may have sent a private letter to Iceland a couple of days later 'clarifying' that the freezing order applied only to IceSave deposits, but the damage had already been done. The FSA determined that KSFUK was allegedly unable to meet its threshold conditions and placed the bank under Administration together with Heritabl UK. (Quite surprisingly within two hours or so of the Freezing Order taking effect.) A Transfer Order issued by the Treasury prevented Kaupthing UK from returning any monies to the Isle of Man sister bank, thus effectively denying KSFIoM the right to operate. Up until that point, savers with KSFIoM had a well-funded bank.

Importantly, the depositors have an indirect claim on the money held in KSFUK. It morally and justifiably belongs to those who conscientiously scrimped and saved for years to accumulate their life-savings now held under Order in the UK – these assets would not otherwise be there and should be returned forthwith. I personally have the proceeds of two 25 year and one 20 year life endowment policy plus 16 years of hard-won savings in that bank and it belongs to my family; I and thousands of other KSFIoM depositors are extremely resentful of HMG's detachment from the negative results of their actions, and grow more bitter as time and revelations come to pass.

The KSFIoM savers did not personally place their monies in that UK bank, and quite why they should be the only KSF depositors to suffer this pompostic imposition is beyond most reasonable people's comprehension (as with the PM's assessment of Lehman Brothers). The IoM FSC achieved the objective of preventing monies from returning to Iceland; these assets have not aided the domestic depositors of Iceland as HMG allegedly feared, nor have they disappeared, no, the deposits belonging to the KSFIoM bank (and by extension it's customers) are being held in the UK by direct Order of HMT. This situation appears completely at variance with HMG's stated aim of the intervention being for the benefit of British depositors and the UK economy (with which the Island conducts some £53 billion of business per year). KSFIoM's retail depositors - mostly all British subjects - have been left unaided for three months [nine months now] their money is accounted and its location known, but they may not have it – how does the Treasury justify this standpoint? It goes against
stated aims; it aligns with a system unsuited to the circumstances; one which is causing British subjects to suffer unjustly. Indeed, this position opposes natural justice yet has been sanctioned 'under the wing' of the Ministry of Justice.

The Icelanders enjoyed the fruits of their overextended banking sector – not the Isle of Man depositors – why then are savers treated as though they are hand in glove with the Icelandics? Many of us were moved from the Derbyshire to Kaupthing without so much as a 'by your leave' and many more were not even aware that their parent bank was in Iceland. We have been largely ignored with barely a word from any official source – least of all from the Chancellor of the Exchequer who owes replies to hundreds of MPs' requesting answers on behalf of their constituents. This is hardly acceptable behaviour from men in office. [Even after nine months, neither Darling, Turner or Bach have condescended to write an open letter of explanation in their own hand to the thousands of British citizens and subjects turned into paupers through their very actions. Either they couldn’t care less or are consumed with guilt (choke).]

The depositors expected the KSFIoM 'liquidator provisionally' to have the assets returned from the UK so that the bank could honour its obligations and repay the savers, but Treasury intransigence prevents this from happening – as though HMT has no part or power in this affair. Had the fall of KSFIoM been an unforeseen, unfortunate consequence of HMG intervention, then the return, promise, or loan in kind of assets, would lend credence to such an outcome, but the MoJ/Treasury’s insistence on upholding a quasi-legal position by controlling the retention of these monies infers possible predetermination of this intervention – especially since the KSFIoM depositor’s assets will be subject to creditor distribution and the Treasury/FSCS stands to be the largest benefactor. UK depositors have already been favoured by HMT and given the instructions to Ernst and Young to prioritise Edge account transfers that favouritism is seen to continue. [And has continued with the return of millions to one Mr Whelan.]

KSFIoM savers are also retail depositors, but have not been nearly so well treated -despite Lord Bach’s televised assertion to the contrary - we are demonstrably third-class, get-to-the-back-of-the-queue-and-wait citizens. Wait until an unknown portion of our assets have recompensed HMT/FSCS for the 170,000 UK Edge depositors up to £50K, and the rest is shared between London Transport, Kent police, and the cats home amongst others -- who chose or had expert financial advice choose for them -- to put their wholesale deposits into that UK bank.

‘Never justify an immoral act for a moral reason’ is an adage that HMG would be wise to acknowledge. Thousands of ordinary British savers – many of them already in retirement and dependent upon the income derived from the interest on their life-savings have been put dropped into dire and desperate straights through no fault of their own. They were ‘driving along’ minding their own business when they got hit by big brother HMG, sideswiped, and swept by the wayside without care or favour. ‘Believe it or not’ that is the commonly held perception and one which we depositors will continue to hammer home and advertise at
every opportunity.

I would be most grateful of an early reply.

Yours faithfully,


Fiona at MoJ

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Thu, 09/07/2009 - 11:18

In return for this comprehensive missive, she sent me a trite reply. So I returned the favour.

Fiona,

This reply is utterly unacceptable; you have not even attempted to answer one of my many questions - you have actually given a reply that I had already covered in far greater detail! How pathetic is that! I asked you to please refrain from delivering a trite answer or quick quip and you've done just that! It's unbelievable, but true - just like the initial actions of this whole debacle.

I am sick to the back teeth of this Government's slimy wriggling out of its responsibility. Any time a depositor raises the point that HMG instigated the proceedings that brought down the Isle of Man bank it goes off at a tangent answering questions that haven't been asked - why not even try to deliver an answer to the queries put to you by so many depositors? We know why you won't answer them; they cannot be answered without an admittance of involvement, and that would never do would it? We cannot even get the people responsible for bringing destitution upon thousands of British families to write a public reply; they oblige people like yourself to do the dirty work instead.

It is beyond reprehensible; the lowest of the low, this despicable Government cannot possibly stoop any lower. It has lost all respect and reduced the British sense of fair play and honesty to the level of the Americans OJ Simpson and Bill Clinton - just tell bigger and bigger lies. I detest and despise your superiors with a vengeance. How dare Bach ask the Icelandics for transparency and fairness for all creditors - talk about the pot calling the kettle black - what shameful hypocrisy is this? I will ever remember Bach's TV appearance in front of the TSC, the only thing that can be said is that unlike Turner and Darling at least Bach looked extremely uncomfortable when telling his stories - somewhere deep inside, the man probably still has a conscience - unlike the other two. Pity he doesn't live by it. Shame on them and shame on Brown, what goes around comes around and we can only hope they get their comeuppance.

Well thanks for nowt Fiona.

A really choked depositor


Appalling response to Icecrusher's brilliant letter.

  • peter and louise
  • 18/10/08 01/09/09
  • a depositor
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  • Thu, 09/07/2009 - 16:08

So sorry that the response to your 'brilliant letter' was yet more trite from that so-called official. Yet again, the result of casting 'pearls before the swine' has been witnessed. I am raking my brain how on earth to break through this impasse when no one will listen to reason. I hope DST will come up with something momentous soon.


Despairing! When did you

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Thu, 09/07/2009 - 16:16

Despairing!

When did you write? No answer yet to my latest to Fiona (sent, it is true, only 2 days ago - 7 July).


How can we get over this brick wall

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
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  • Thu, 09/07/2009 - 11:54

How can we get past this brick wall around the MOJ?


brilliant letter icecrusher..

  • hippychickrobbed
  • 03/11/08 31/05/09
  • a depositor
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  • Wed, 08/07/2009 - 13:36

This has got to be blitzed around honestly...


Great letter Ice

  • steveservaes
  • 13/10/08 31/05/09
  • unspecified
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  • Wed, 08/07/2009 - 12:36

Lets keep the pressure on.
After the outcome of Friday's judicial review is known, HMG may feel able to deal with us more freely.


Letter from Icecrusher

  • peter and louise
  • 18/10/08 01/09/09
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  • Wed, 08/07/2009 - 12:26

If this letter arrives at the right desk and is read by the right person it surely has to make a serious impact. The contents of your letter call for fairness and justice and it simply, eventually, cannot be ignored. Your letter is brilliant. I hope its brilliance shines through and exposes all the murkiness surrounding our plight and that action is taken.


Well done again Ice.

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Wed, 08/07/2009 - 11:50

Another masterly missile to add grist to the mill.

Will we succeed one day in grinding them down? Fiona is going to have her hands full - so much the better!


Letter to MoJ

  • icdbrazil
  • 10/10/08 30/11/09
  • a depositor
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  • Wed, 08/07/2009 - 11:20

Ice - another masterpiece.

My thread of msgs with Fiona now over 60 - believe she means well but only allowed to revert with BS. Must keep at it to eventually prevail!


Brilliant letter IceCrusher

  • jmf
  • 16/10/08 31/10/09
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  • Wed, 08/07/2009 - 13:21

Hope that it reaps the appropriate response.


I sent Fiona this one - keep it up everyone

  • steveservaes
  • 13/10/08 31/05/09
  • unspecified
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  • Wed, 08/07/2009 - 11:40

Dear Madam

I have seen your responses to various persons regarding the above.

Please can you confirm the following :-

1) What actions the MoJ have taken, in representation of the IOM, to demand that HM Treasury take steps to repay the money deliberately "stung" within KSFUK, by UK FSA suspending usual inter-regulator reporting procedures, which would, if followed, have allowed KSFIOM to remove its exposure to HMG's sting on the KSFUK bank?

This is especially apposite in view of Gordon Brown's criticisms of jurisdictions attempting to move/ retain funds to their/ in their own jurisdiction to improve the local position on insolvency.

HMG's position on this is hypocritical and contrary to stated policy. What then has MoJ done to remedy this, in fulfilment of its constitutional duty to IOM?

2) What has MoJ done to promote settlement of KSFIOM losses from Iceland as part of the IMF deal? The public viewpoint is "nothing". Why has MoJ failed to exercise its constitutional duties for IOM in this respect?

3) Likewise for the Icelandic parental guarantee.

4) How does the MoJ consider it is fulfilling its constitutional duties to IOM when it - so it seems - has ,without complaint, allowed HMG to "sting" IOM depositors' life savings, failed to take any steps in international negotiations to demand fair treatment for IOM and failed to demand any kind of public enquiry to satisfy the public that HMG's actions were lawful and just? Does the MOJ accept that in this case it has acted entirely against the interests of the IOM and the UK citizens who were unfortunate enough - either as Manxmen or mainland depositors- to hold savings there when Mr Darling took his highly unique action, on the faith of sealed and secret papers which MOJ do not seem interested in explaining to the IOM.

I ask - as a Manx resident and a UK citizen - in fulfilment of your public duties - for your best and fullest answer on these questions. Gordon Brown boasts of transparency and fairness in government. Please apply that in this case.

With kind regards


send it by post

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
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  • Sun, 05/07/2009 - 17:25

Send it by post or fax

I sent mine to 10 Downing Street and got a polite reply from a Mr S Caine.

Dear xxxx

The Prime Minister has asked me to thank you for your recent letter.
Mr Brown was pleased that you felt able to write to him. A careful note has been made of your comments.
He has asked me to send your letter to HM Treasury as he feels that it is important that they are aware of your concerns and can send you any comments they may have.

That was 15th June
Haven t got anything back from the Treasury as yet ( they probably have a bin with my name on it in that office) nevertheless it was a reply. Maybe if another 10000+ people wrote it would make a difference.


@bellyup - send it by post

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Sun, 05/07/2009 - 17:59

Well, you did slightly better than me!

Mine - also sent by post to n° 10 - eventually got the following reply (also from Mr Caine):

Dear xxx,

The Prime Minister has asked me to thank you for your recent letter.
As you can imagine, Mr Brown receives thousands of letters each week and regrets that he is unable to reply personally to them all.
I have been asked to forward your letter to HM Treasury so that they may reply toyou direct.

That was on 19 May - so maybe they decided they should try to give the impression that Mr Brown was actually involved in some way (though note that it doesn't say he read your letter!) and that someone has carefully noted your comments. Is this a sign of progress??

The Treasury finally replied by post on 8 June (so you might hear from them soon). It came from HM Treasury Enquiry Unit and was otherwise anonymous and unsigned. No point in copying it here - it was the old standard blurb (2 pages of it) with a recital of the 'facts' (as they see them). Usual stuff - all the responsibility of the IOM. Plus the curious statement that "Ultimately this was a failure that started in Iceland and responsibility for banks in Iceland rests with the Icelandic authorities."
Notwithstanding that neither KSFUK nor KSFIOM were "banks in Iceland". Basically, anyone BUT the HMG is responsible!

I was incensed by the final "I hope you find this reply helpful".

My reply (by email) is posted below ("Letter to Treasury"). No reply to that yet!


I intend to send this letter to newspapers and MPs etc - sugg'n?

  • steveservaes
  • 13/10/08 31/05/09
  • unspecified
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  • Tue, 30/06/2009 - 17:14

1 July 2009

Dear

Kauthing Singer and Friedlander Isle of Man Limited – In Liquidation

I am writing to you in relation to the above bank (“the Bank”), of which I am a depositor. Depositors of the Bank stand to lose a very large chunk of their taxed life-savings. The reason for this is that over 500 million pounds of the bank’s money was placed with Kaupthing UK in London (“KSFUK”). That Bank is now in administration – with administrators advising that the return on debts owed by KSFUK may be as low as 50p/£1.00.

The Prime Minister Gordon Brown and his government have consistently stated the (obvious) need for fairness and transparency in government. I humbly submit to you that there has been outright unfairness and opacity from HMG in relation to KSFUK and the Bank, and that this has led to appalling losses to innocent UK citizens both in England and in the Isle of Man. I ask you to support – as an absolute minimum – a full transparent public multi-party inquiry into HMG/the FSA’s actions in relation to KSFUK. And in line with the findings thereof – due compensation to the Bank, so that its depositors can be re-united with their savings without further delay.

Alternatively, I humbly request your support for the extension of FSCS compensation to savers with KSFIOM who have lost their savings due to the matters described below.

The basic arguments for my request above are as follows :-

  1. Why has KSFIOM lost its depositors’ savings?

Answer : because they were lodged with KSFUK, who can only pay back perhaps 50p in the £1.00 over time.

  1. Why can KSFUK pay back such a small proportion of its debt to KSFIOM?

Answer: KSFUK was a retail bank – UK-incorporated and UK- regulated, by the UK FSA. To be 50/100 insolvent, the practices and procedures of KSFUK must have been beyond all reasonable and normal banking practices. The UK FSA failed to prevent this.

  1. Why should HMG compensate KSFIOM?

Answer: because the appalling losses suffered by KSFIOM were the apparent consequence (see below) of a failure by the FSA to regulate KSFUK properly or at all.

  1. Did the FSA have any reason to subject KSFUK to special scrutiny?

Answer: yes, since Mr Shearer, former head of SFUK advised the FSA that the Kaupthing parties taking it over in 2006 were not fit to run a UK bank. This was reported to the recent Treasury Select Committee hearing.

  1. But why did KSFIOM not withdraw its money from KSFUK in view of KSFUK’s impending administration?

Answer: as advised to the Treasury Select Committee, the FSA deliberately – presumably pursuant to HMG orders – suspended its usual co-operative regime with the Isle of Man FSC (its IOM equivalent) so as to allow the perpetration of a “sting” on the KSFIOM monies in KSFUK, which would have been withdrawn in advance of the KSFUK administration order, had the normal procedures been followed, as they had been with Bradford and Bingley etc.

  1. But why would the FSA/ HMG want to suspend the usual reporting system between the FSA and the IOM FSC?

Answer: In the case of Bradford and Bingley and other banks, HMG had decided to “prop up” or “bail out” those banks. In the case of KSFUK, HMG had made the unusual decision – given that KSFUK was a UK bank in every sense – to allow KSFUK to fail. HMG had decided to pay-off its UK depositors in full and “stand in their shoes” in KSFUK’s administration. Given the huge investment in this of HMG money, HMG wanted to ensure as much money was in the KSFUK “pot” for division between KSFUK’s creditors – of which HMG was the biggest. HMG had apparently taken the view that it was fair and proper to suspend the reporting regime with the IOM FSC (financial regulator) in order that money that properly belonged to KSFIOM (and by extension its depositors) would not be withdrawn back to the IOM, but instead left in KSFUK for seizure and use as compensation to HMG as a creditor thereof. In short, HMG was taking the savings of depositors in the Bank, to compensate HMG for the compensation it had needed to pay out because of the maladministration of KSFUK under the regulation of HMG’s own FSC!

  1. So the basic case is that KSFUK was mal-administered under the FSA meaning that bank suffered huge losses of deposits, but that KSFIOM could have escaped from the consequences of this, had the UK FSA not departed from its usual inter-state reporting procedures, and that this had the effect of “seizing” KSFIOM’s monies to bail out HMG?

Answer: this seems to be the case.

  1. And is this not an outrage – that HMG should seek to make KSFIOM’s depositors shoulder the losses of a UK bank, by deliberately suspending the proper, civilised and decent reporting standards established between 2 parts of the British Islands?

Answer : there is a strong case for saying so – after all, the burden to the UK taxpayer would be tiny, and a fair one, since the FSA has been at fault; whereas the burden is a crushing one for innocent depositors in KSFIOM, who had the right, in a “transparent” and “fair” system, to expect established financial regulation procedures to be followed and not thrown aside in a game of “beggar your neighbour”.

  1. But were not the actions of HMG necessary to “save the UK banking system” in October 2008?

Answer: the case has been made for HMG that Mr Darling’s various actions against Icelandic banks were necessary for this purpose. HMG has seen fit to compensate UK depositors in those banks in full. If the justification is correct, then the sacrifice of KSFIOM’s depositors saved the UK tax-payer trillions of pounds. Pursuant to the principles relating to sacrifice of private property for public defence in war, and to sacrifice of individual property for common good in salvage in shipping, both logic and law suggest that HMG should gratefully compensate KSFIOM/ its depositors for their particular losses, suffered to save the UK banking-system, especially as their sacrifice averted a loss many, many times greater for the UK and its taxpayers.

  1. But was it not the intervention of HMG in October 2008 that actually caused KSFUK’s parlous position of 50p/£1.00 returns?

Answer: this seems very possible – and if it was, the case for compensation is even stronger than otherwise, since effectively HMG “took down” a healthy business, for political and solely national purposes, and must be taken to have reaped a gain from this far in excess of the losses which they might be asked to compensate.

  1. Why is it said that HMG has failed to be fair and transparent in its dealings in relation to the Bank/KSFUK?

Answer : there are many matters which must be mentioned :-

11.1 the revelations that well ahead of the “sting” KSFUK were required to pay deposits received into special trust accounts, hampering their liquidity for regulatory purposes;

11.2 the use of a sealed order – i.e. total secrecy – to transfer all KSFUK’s “Edge” depositors to ING, as a prelude to putting it into administration;

11.3 the possibility – in the absence of any other open explanation – that 11.1 and/or 11.2 might have been used as justifications for putting KSFUK into administration – i.e. HMG/ the FSA created deliberately the conditions under which this could be done;

11.4 the total lack of clarity – even to date – as to whether KSFUK’s parlous situation is due to historic misregulation by the FSA or the intervention of 8 October 2008 by HMG/FSA;

11.5 the strong suspicion that the “taking down” of KSFUK may have been a deliberate move by HMG to counter any attempt by the government of Iceland to use the Kaupthing Group as a means of counteracting HMG’s seizure of Icelandic assets under terrorism laws, in relation to the unconnected Landesbanki – in circumstances where there was no reason to believe the Icelandic Government would act in this way and where KSFUK was an independent UK bank and not an Icelandic bank;

11.6 Gordon Brown’s deliberate statement – in the course of questioning about KSFUK in relation to another depositor, Christies’ Hospital – that KSFUK was an Icelandic-regulated bank (and hence not his responsibility) when in fact it was always a UK-bank, regulated by the FSA;

11.7 Alaistair Darling’s justification of his actions at the time by smearing depositors in KSFIOM as persons who deposited in a “tax haven” and hence, by inference, were not entitled to be treated with fairness and transparency;

11.8 HMG’s deliberate voting to exclude KSFIOM from the Creditors’ Committee in the administration of KSFUK – voting that small charities with claims only a small fraction of KSFIOM’s should have a voice but not KSFIOM, far and away the second biggest creditor behind HMG (standing in the shoes of UK retail depositors);

11.9 HMG’s constant statement that it is for the IOM Government to compensate KSFIOM depositors, knowing full well that the same is not practicable given the IOM’s 80,000 population;

11.10 HMG’s inconsistent attitude towards the kind of action it took in this case – criticising the USA in relation to Lehman Brothers and demanding return of transferred funds to the UK, when by manipulating financial reporting at government level, HMG achieved the same effect against the IOM.

  1. Summary

Many depositors put their life savings into KSFIOM, a “AAA-rated” bank in a tax-paying jurisdiction, operating in a system where government regulators reported between themselves so as to ensure depositors could be protected at regulator level. KSFUK, a UK-bank, seems to have been mis-regulated to such a degree that the normal reporting systems should have led to the IOM FSC being warned to ensure money deposited there by KSFIOM was placed elsewhere. Seemingly, in order to forestall an Icelandic reaction to HMG’s freezing of Icelandic assets under terror legislation, HMG decided to seize KSFUK, even though it was not an “Icelandic asset” but a London bank. This required HMG to bail out its UK depositors at vast expense. All this was to “save the UK banking system”, for the benefit of the UK-taxpayer. Instead of following normal reporting procedures HMG suspended them to “seize” all the KSFIOM deposits, knowing full well or not caring, that this would leave KSFIOM and the IOM Government unable to fully compensate the savers whose money would otherwise remain available in KSFIOM. Having done so – HMG refuses all appeals to compensate and prevents KSFIOM taking its expected place on the KSFUK Creditors Committee, presumably to continue and consolidate the effects of this perceived injustice.

Is this what happened? Very possibly. Sadly, we are still not allowed to know since HMG will not tell us. There is no transparency and hence no fairness and no justice. KSFIOM depositors are simply told “tough” by HMG and expected to walk away and accept the loss of their life savings.

I put it to you that this is not the UK we all expect to belong to. It is not the UK of fairness and transparency that Gordon Brown and his MP’s boast of. I accordingly ask you – so that Mr Brown’s supposed aims may be fulfilled – to do all you can to achieve the ends mentioned above : (a) a transparent and fair process to establish what actually happened throughout the operation of KSFUK and especially in the Autumn of 2008; and (b) due compensation to KSFIOM savers for what they have lost as a result of HMG nationalising their savings for the supposed common good of saving the UK banking system.

I look forward to hearing from you. To the extent you would intend to be so kind as to send me comments that HMG Treasury has already issued to other correspondents on this issue, please note I have already seen the same and hence would not need to avail myself of that kindness.

Yours sincerely

Depositor in KSFIOM


blitz this steve...

  • hippychickrobbed
  • 03/11/08 31/05/09
  • a depositor
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  • Sun, 05/07/2009 - 16:37

blitz it ....great letter


Letter to Newspapers

  • peter and louise
  • 18/10/08 01/09/09
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  • Sat, 04/07/2009 - 11:10

Well Done Steve! Fingers crossed it hits a cord with someone who matters.


Brilliant steveservaes!

  • anrigaut
  • 19/10/08 30/10/09
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  • Tue, 30/06/2009 - 19:41

Brilliant steveservaes! Couldn't have put it better (or as well).

If only those we send these letters to could have the same reaction...
But we musn't be disheartened. We must keep it up. 'They' must understand that we will not go away. Who knows, the day of judgement may yet come ...


About common decency and Govt response to Treasury SC report

  • jmf
  • 16/10/08 31/10/09
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  • Tue, 30/06/2009 - 14:36

I wrote recently to Fiona Salem in the Ministry of Justice, also encouraged by the excellent correspondence of other DAG members, appealing to her to help keep our case alive. Much of the reply is quoted from the UK Government and FSA response to the Treasury Select Committee’s 5th report (for full reference to which see below) and much is what we have heard before.
Any suggestions about a reply would be very helpful. Maybe more about what has not been said than what has been said? Point 4 (to which she did not really reply) referred to The Treasury Committee’s recommendation ‘that the UK authorities should work with the Isle of Man and Guernsey authorities to resolve these issues’. The report states that they are working together – however, we don't seem to have seen any benefit so far. .
Some of my questions were not specifically to do with Justice, they were just points I raised to indicate how depositors were left bewildered by statements and actions that defied belief.

Dear XXX
Thank you for your email of 29 June 2009 regarding the collapse of KSF IoM and the questions you raise in relation to the UK Government's involvement in this.
In respect of your first point in which you state your belief that the interventions of the UK Government precipitated the collapse of KSF UK and KSF IoM, you may wish to note the UK Government and Financial Services Agency’s (FSA) response to the House of Commons Treasury Committee’s Fifth Report of Session 2008-09 on the impact of the failure of the Icelandic banks was published on 19 June 2009, a full transcript of which you can find at http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtreasy/656/...
The UK government response notes that the decisions to protect UK depositors in Icelandic banks were made after extensive conversations with the Icelandic Government. Kaupthing Singer and Friedlander Limited (“KSF”), a UK subsidiary of Kaupthing Bank hf is incorporated in English law and regulated by the Financial Services Authority (FSA). The FSA took a judgement on 8 October that KSF no longer met its threshold conditions for FSA authorisation due to a lack of liquidity and applied to court for KSF to be placed into administration in accordance with its powers under the Financial Services and Markets Act 2000. Upon learning of the FSA’s decision, the UK Government moved swiftly to transfer some of the deposits of KSF to ING to safeguard depositors and financial stability within the UK.The steps taken by the FSA and the Government had no bearing on the status of the parent company, Kaupthing Bank hf, which is incorporated under Icelandic law and subject to supervision by the Icelandic Financial Supervisory Authority (FME).(Pages 3 and 4)
In respect of your second point concerning the Chancellor's statement, you'll note that the Treasury Committee stated the following: 'We note that the published transcript of the Chancellor’s conversation with the Icelandic Finance Minister does not confirm that the Icelandic government had stated that it would not honour its obligations but we have seen no evidence to contradict the Chancellor’s view that UK depositors and creditors were unlikely to be protected to the same extent as Icelandic ones. We also have seen no evidence that Kaupthing would have survived if the Chancellor had not expressed his views.
In respect of your third point 'Why does the Prime Minister make a public statement recommending that all jurisdictions should vouchsafe savers, yet has not requested the Crown Dependency of the Isle of Man to do so', we should consider the position of the Isle of Man. The Isle of Man is a self-governing dependency of the Crown, with its own directly elected legislative assembly and its own fiscal, regulatory and legal systems. Arrangements for depositors in Isle of Man banks is a matter for the Isle of Man authorities.
Because KSF IoM does not fall within the scope of the UK regulatory regime, depositors are not eligible for compensation under the UK Financial Services Compensation Scheme (the FSCS). The UK Government cannot provide cover for deposits held by British citizens in jurisdictions outside the direct control of the United Kingdom. The Treasury Select Committee in its report of 4 April 2009 agreed with this principle and it is consistent with that expressed by the Chief Minister of the Isle of Man. Arrangements for depositors in banks in overseas territories are a matter for the Governments of those territories. As such, it would not be appropriate to use UK taxpayers' money to guarantee their deposits.
As I’m sure you are aware, KSF IoM is not a subsidiary of KSF in the UK, but of an Icelandic company in the Kaupthing group. It was the responsibility of the Isle of Man’s regulator to assess how the failure of the parent company in Iceland or the failure of any other company in the group would impact on the Isle of Man subsidiary and take the appropriate action. The action that should be taken in relation to KSF IoM in the future is also a matter for the Isle of Man authorities.
In respect of your fourth point, I'm not entirely clear what you mean by the absence of a justifiable reason.
In respect of your fifth point concerning the return of USA monies, this is not a matter for the Ministry of Justice and you may wish to take this up with HM Treasury.
In respect of your sixth point concerning Mr Whelan, media releases allege that Mr Whelan was only compensated after HMT intervention. This is not the case. The FSCS is responsible for determining both the eligibility and priority with which eligible depositors are paid out. The FSCS is independent of the Treasury and has sole responsibility for determining whether a depositor meets the necessary eligibilty criteria under its rules. It is also responsible for determining the priority with which eligible claimants are paid out. There are no special FSCS rules for charities and their eligibility is determined by applying the same rules as for other depositors.
I do hope this information is helpful to you and I do recommend reading through the Government and FSA's responses for further clarity.
Best wishes,
Fiona
Fiona Salem |Crown Dependencies Policy Branch, International Directorate | Ministry of Justice | 7.12 | 102 Petty France SW1H 9AJ 0203 3343874 | fiona [dot] salem(?)justice [dot] gsi [dot] gov.


@jmf: suggested reply

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Sat, 04/07/2009 - 18:59

Dear XXX
Thank you for your email of 29 June 2009 regarding the collapse of KSF IoM and the questions you raise in relation to the UK Government's involvement in this.

In respect of your first point in which you state your belief that the interventions of the UK Government precipitated the collapse of KSF UK and KSF IoM, you may wish to note the UK Government and Financial Services Agency’s (FSA) response to the House of Commons Treasury Committee’s Fifth Report of Session 2008-09 on the impact of the failure of the Icelandic banks was published on 19 June 2009, a full transcript of which you can find at http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtreasy/656/...

The UK government response notes that the decisions to protect UK depositors in Icelandic banks were made after extensive conversations with the Icelandic Government. Kaupthing Singer and Friedlander Limited (“KSF”), a UK subsidiary of Kaupthing Bank hf is incorporated in English law and regulated by the Financial Services Authority (FSA). The FSA took a judgement on 8 October that KSF no longer met its threshold conditions for FSA authorisation due to a lack of liquidity and applied to court for KSF to be placed into administration in accordance with its powers under the Financial Services and Markets Act 2000.

Upon learning of the FSA’s decision, the UK Government moved swiftly to transfer some of the deposits of KSF to ING to safeguard depositors and financial stability within the UK.The steps taken by the FSA and the Government had no bearing on the status of the parent company, Kaupthing Bank hf, which is incorporated under Icelandic law and subject to supervision by the Icelandic Financial Supervisory Authority (FME).(Pages 3 and 4)

You say that decisions to protect UK depositors were made after extensive conversations with the Icelandic Government and go on to say that on learning of the FSA’s decision, HMG moved swiftly to transfer edge deposits to ING.

When exactly was initial contact made with ING for that bank’s agreement to accept 170,000 accounts worth £2.6 billion? What period of time passed between the FSA’s application to court for placing KSF in administration and the transfer of accounts to ING? The FSA had already obliged KSF to open accounts with the Bank of England in the days preceding KSF’s administration – from which it is clear that the provision of preliminary facilities was considered necessary prior to placing KSF under administration.

Setting up the transfer of accounts to ING and opening other accounts with the BoE were premeditated activities which preceded the Chancellor’s conversation with Arni Mathiesen. Mr Mathiesen made no mention of any intention to deviate from honouring his country’s guarantees to non-domestic depositors; this interpretation was inferred only by the Chancellor. The preparation of these conditions resembles an orchestrated maneouvre to place KSF under administration as soon as a reasonable excuse could be manifested. Only an independent inquiry could prove or disprove this widely held belief.

In respect of your second point concerning the Chancellor's statement, you'll note that the Treasury Committee stated the following: 'We note that the published transcript of the Chancellor’s conversation with the Icelandic Finance Minister does not confirm that the Icelandic government had stated that it would not honour its obligations but we have seen no evidence to contradict the Chancellor’s view that UK depositors and creditors were unlikely to be protected to the same extent as Icelandic ones. We also have seen no evidence that Kaupthing would have survived if the Chancellor had not expressed his views.

There can be no ‘evidence’ to contradict these views because these processes were followed through by HMG; there can only be evidence of what took place – not conjecture about what might have been. A man cannot be shot dead and the murderer held not guilty because the man might have died anyway.

So it is with the Isle of Man bank; had its assets not been appropriated in the UK it might not have been brought down, but it met its demise because its assets were placed in the UK - allegedly for safe-keeping - and retained there under a Treasury Transfer Order. The Treasury was made aware that this deposit represented the collective savings of some 10,000 retail savers, but ignored this human element and fundamentally punished KSFIoM depositors for the error made by the Island’s financial supervision commission. (FSC). Finding the reason behind this spiteful and vindictive attitude will expose the crux of the matter and that is why there must be an inquiry.

Imploring other jurisdictions to uphold a policy that would vouchsafe all depositor’s monies whilst ignoring the human tragedy taking place in its own backyard is beyond hypocrisy. The rationale behind the UK Government’s boorish self-centric behaviour must be exposed. HMG is clearly discriminating against a section of its own citizens whilst posing to be the saviour of the global financial crisis.This delusional behaviour demands investigation, it cannot to be tolerated in a democratic society.

Given that the Chancellor exercised extraordinary measures to move 170,000 edge acounts at a cost of £2.6 billion, he replicated no such compassion in returning a ‘mere’ £1/2 billion to repay KSFIoM retail depositors their own money. The TSC made it known that the movement of funds from KSF UK to ING had a significant impact on the bank’s ability to continue operating, but the Treasury has chosen to ignore that salient truth.

In respect of your third point 'Why does the Prime Minister make a public statement recommending that all jurisdictions should vouchsafe savers, yet has not requested the Crown Dependency of the Isle of Man to do so', we should consider the position of the Isle of Man. The Isle of Man is a self-governing dependency of the Crown, with its own directly elected legislative assembly and its own fiscal, regulatory and legal systems. Arrangements for depositors in Isle of Man banks is a matter for the Isle of Man authorities. Because KSF IoM does not fall within the scope of the UK regulatory regime, depositors are not eligible for compensation under the UK Financial Services Compensation Scheme (the FSCS). The UK Government cannot provide cover for deposits held by British citizens in jurisdictions outside the direct control of the United Kingdom. The Treasury Select Committee in its report of 4 April 2009 agreed with this principle and it is consistent with that expressed by the Chief Minister of the Isle of Man. Arrangements for depositors in banks in overseas territories are a matter for the Governments of those territories. As such, it would not be appropriate to use UK taxpayers' money to guarantee their deposits.

“The UK Government cannot provide cover for deposits held by British citizens in jurisdictions outside the direct control of the United Kingdom.” There is a misunderstanding here; depositors in KSFIoM have not sought compensation from the FSCS, rather, they hold out for their monies to be returned to them from KSF. The money is there, it hasn’t disappeared, it is to be shared between all creditors including the biggest creditor of all – Her Majesty’s Treasury who funded UK Edge retail accounts 100%.

Under advice from the Island’s regulator, the bank placed the asset in KSF whereby it came under the control of the FSA who subsequently placed KSF in administration. KSFIoM savers are still retail depositors whose interests should come before all other creditors; they should not be so viciously penalised and left to take the brunt of this fallout between regulators of adjacent jurisdictions. It’s all very well pointing the finger of blame at the Governance of the Island, but if it refuses to accept responsibility, then it is for the Ministry of Justice to step in and enforce compliance – which is well within its remit to pursue. It is not acceptable to turn away from the plight of thousands of British citizens and British subjects reduced to penury due to an action instigated by one British Government and ignored by another. It is all too easy for each of these Governments to lay blame upon the other – relieving their respective public conscience – but leaving ordinary decent savers without representation and recompense.

As I’m sure you are aware, KSF IoM is not a subsidiary of KSF in the UK, but of an Icelandic company in the Kaupthing group. It was the responsibility of the Isle of Man’s regulator to assess how the failure of the parent company in Iceland or the failure of any other company in the group would impact on the Isle of Man subsidiary and take the appropriate action. The action that should be taken in relation to KSF IoM in the future is also a matter for the Isle of Man authorities.

If the Governance of the Isle of Man is not upholding its obligations – primarily because its financial regulator failed to execute expected duties with all due caution and diligence – then in the name of good governance that ten thousand savers are not improperly penalised, it behoves the MoJ to step into this situation and ensure that whatever should be done is done in a timely manner and with every assistance required to resolve the misgovernance.

In respect of your fourth point, I'm not entirely clear what you mean by the absence of a justifiable reason.

In respect of your fifth point concerning the return of USA monies, this is not a matter for the Ministry of Justice and you may wish to take this up with HM Treasury.

In respect of your sixth point concerning Mr Whelan, media releases allege that Mr Whelan was only compensated after HMT intervention. This is not the case. The FSCS is responsible for determining both the eligibility and priority with which eligible depositors are paid out. The FSCS is independent of the Treasury and has sole responsibility for determining whether a depositor meets the necessary eligibilty criteria under its rules. It is also responsible for determining the priority with which eligible claimants are paid out. There are no special FSCS rules for charities and their eligibility is determined by applying the same rules as for other depositors.

Please provide a reference whereby depositors can read just how one person can satisfy eligibility criteria to have the whole sum of his monies (alleged to be almost £60 million) returned to him, whilst 11,400 depositors bear no consideration whatsoever. 70% of these savers are already in or near retirement and all will shortly become dependent upon State aid without their life-savings so diligently saved for retirement.

I do hope this information is helpful to you and I do recommend reading through the Government and FSA's responses for further clarity.
Best wishes,
Fiona
Fiona Salem |Crown Dependencies P


Wonderful factual letter again Ice - thank you for guidance

  • fight theft
  • 10/10/08 28/05/13
  • a depositor
  • Offline
  • Mon, 06/07/2009 - 12:08

Thank God you've still kept your great mind together Ice even tho' I'm sure, like some of us, you don't feel you are the same as before all this happened - I still want to thank you always for your groung breaking hands on right on the pulse letters.


&IceCrusher Thanks for your help with Justice

  • jmf
  • 16/10/08 31/10/09
  • a depositor
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  • Sun, 05/07/2009 - 11:23

I shall be working your very apt responses into my reply.

Do you know if there is an accessible DAG Strategy team succint, up-to-date view of events on site - or is this asking the impossible?. I cannot remember all the detail and find writing extremely time consuming having to re-check information. Possible more DAG members would write if this information was brought together in one place.


Appeals to common decency etc to the opposition

  • jmf
  • 16/10/08 31/10/09
  • a depositor
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  • Sun, 28/06/2009 - 18:16

It is extremely encouraging to read the emails and letters posted in this thread having received in the past very unsatisfactory replies from the PMs office and Justice. Thank you for the new basis upon which to work. Are you copying any of these these recent communications to the opposition parties? I would think they must now be quite concerned to see themselves regarded as being 'decent' parties.


What has the opposition done?

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
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  • Sat, 04/07/2009 - 22:21

Have I missed something?
I havent seen George Osbourne out there fighting our corner or even commenting on it.


the opposition

  • jmf
  • 16/10/08 31/10/09
  • a depositor
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  • Sun, 05/07/2009 - 11:47

No I don't think you've missed anything. All politicians want to be elected (or re-elected). Whilst naming and shaming is going on perhaps we can get one of them to notice us again - well at least tell them we have not gone away. Unfortunately, I don't have an MP but someone must have one who would welcome resurrection.


Letter to Treasury

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Sun, 28/06/2009 - 14:04

Unsurprisingly, my letter of 8 May to Gordon Brown was passed to the Treasury, from whence (like expat and others) I eventually received the usual standard blurb. I have today replied as below - largely inspired by expat and IceCrusher - to whom many thanks! Much good may it do - but I guess we have to keep at it.

Dear HM Treasury Enquiry Unit,

I am obliged to address you in this unpersonal way because that is how your letter of 8 June in response to my letter to Mr Brown came to me – unsigned and from an unidentified person.

I am sorry to say that both you and the Prime Minister's office appear to have totally missed the point of my letter of 8 May concerning the plight of depositors with Kaupthing Singer & Friedlander (Isle of Man) (KSFIoM), initially addressed to Mr Brown and forwarded to you for reply. After 9 months caught up in this sorry affair I am only too aware of all the 'facts' you list (as well as some you fail to mention) in your standard letter and of the equally standard and increasingly pig-headed and infuriating attitude of the Treasury that this is purely a matter for the Isle of Man.

My letter to Mr Brown (copy attached) was not a request for facts and legal niceties, but a desperate plea that some measure of basic human compassion and common decency be finally brought to bear to relieve the suffering of the thousands of honest British citizens whose lives have been devastated as a direct and forseeable consequence of the interventions of Her Majesty's Government which precipitated the collapse of KSF UK – and hence that of KSFIoM - on 8 October last. Since then the Government, spear-headed by the Treasury, has continued to deny its obvious role in the demise of our bank and has instead attempted to pin all responsibility for this disastrous situation on the Isle of Man authorities, thus washing their hands of any responsibility on their part. This I do not and will never accept. And this is why, in growing desperation, I wrote to the Prime Minister asking that his Government reconsider their intransigent position. By finally accepting some share of responsibility – morally if not strictly legally - for our situation, I have no doubt that a way could easily be found to ensure the full return of our savings. What is needed is a political solution, not a purely legal one.

Apparently such pleas for compassion go completely unheeded in Whitehall. The Prime Minister's Office passed my letter to you and your response was to dispatch an unsigned anonymous standard tract restating the 'facts' as you see them and ending with the unbelievable sentence « I hope you find this reply helpful ». I can only assume you did not read my letter, for if you did you would not have had the nerve to express such a vain hope. For the avoidance of all possible doubt - no, Sir or Madam, I did not find it in the least helpful: I found it dismissive, disdainful and patronising to British subjects who have been deprived of their life savings as a direct consequence of the United Kingdom's intervention.

One of the facts strangely absent from your list is the key initiating event. On the morning of that fateful day, 8 October 2008, the Chancellor Alastair Darling made the following statement: “The Icelandic Government — believe it or not — told me yesterday that they have no intention of honouring their obligations here.” This statement effectively destroyed any remaining faith in Icelandic banks (already in trouble, but until then Kaupthing was holding its own) and started a run on both KSFUK and KSFIOM. Depositors began trying to withdraw whatever cash they could, leaving the banks unable to service the demands made upon them and leading to the inevitable declaration by FSA later that day that KSFUK was in default and the chain of events which followed. Yet according to replies from HM Treasury (following repeated requests under the Freedom of Information Act by a fellow depositor) this was simply not true:

Quote:
OI: “You have previously made a request for a transcript of a conversation between Árni Mathiesen and Alistair Darling on 7th October 2008. Further to my response to you of 27 February 2009 on this, you asked on 2 March 2009 for confirmation that:

no other conversation took place between Alistair Darling and Árni Mathiesen on the 7th of October 2008.

there was no written correspondence between Alistair Darling and Árni Mathiesen on the 7th of October 2008.

. Following searches of our records, I can confirm that the Treasury does not hold a record of any further conversation or any correspondence on that date.
. If you have any queries about this letter, please contact me. It will be helpful to us if you remember to quote the reference number above in any future communications.”

The replies given under the Freedom of Information Act came from the Treasury itself. The seeds of this situation may well have been planted by the Icelandics, but they at least realised their situation was becoming untenable and sought assistance from the Dutch and the British, yet both callously spurned their North Atlantic neighbour. Brown and Darling saw instead an opportunity to create a ‘Falklands moment’ and used it to their best advantage by stirring up the public and crowing their vainglorious way to saving UK taxpayers and depositors from the Viking Terrorists of the North. They alone started the panic and brought Icelandic banks to their knees. What utter pomposity!

The UK Treasury found no difficulty in underpinning the move of some 160,000 Kaupthing Edge deposits to ING funded by taxpayers money of £2.6 billion pounds in the most extraordinary and unprecedented monetary manoeuvre ever undertaken. The spitefulness of not returning the ‘mere’ £1/2 billion owned by KSFIoM for its savers stands in stark contrast – vividly highlighting the shabby manner in which this appropriation was conducted under the screen of sealed Court Orders. Exactly how did the UK Treasury arrange the transfer of the retail business of KSFUK – a significant and complex transaction with a value of some £2.6 billion pounds exacted within hours of the court order being made - to say nothing of the 22,000 Heritable customers also moved to ING – whilst 10,000 KSFIoM customers were rebuked then ignored? How reprehensible; how despicable and how immoral is this?

On what basis did the UK Government implement S.I 2674 thereby providing its Treasury minister with overriding control of more than 50% of KSFIoM’s assets, which were transferred with the assistance of the FSA for ‘safekeeping’ to the UK in the weeks preceding the UK Government’s action? Similar assistance was coincidentally afforded to the Guernsey Regulator. This overarching prerogative was not simply withheld from the Treasury Select Committee (TSC) by Mr Darling during questioning in November 2008, but defiantly denied.

Court papers relating to the administration of KSFUK were sealed at the time the order was made to transfer assets from this bank to the Dutch subsidiary ING. This highly unusual step was implemented at the behest of the UK Treasury and remains in force today. Now that the adversarial nature of the relationship between HMG and Iceland has tempered, what credit is there in keeping secret the content of these papers?

Monies belonging to KSFIoM were 'lost' in KSFUK; if lost because KSFUK was run like a hedge-fund rather than a bank, as has been suggested, then the FSA must state its position in this regard. Although warned from the outset by the encumbent Singer & Friedlander Director Mr Anthony Shearer about Kaupthing’s inexperienced, yet ambitious and flamboyant management, his valid concerns were cast aside in favour of advice from Iceland’s own regulator, the FME. Who justified such a crass decision as this?

It transpires that other countries which allowed Kaupthing to set up deposit-taking operations placed certain restrictions on its dealings with Iceland. Conversely, the FSA was happy to permit Kaupthing to expand its deposit-taking capability via the introduction of on-line ‘Edge’ accounts offering higher rates of interest. This happened at a time when it was likely becoming more difficult to generate the profits necessary to fund these rates – indicating that cash needed to balance the books was perhaps unsafe. What ‘passport’ to riches was this and who saw fit to allow it?

The CEO of the FSA, Hector Sants, subordinated his responsibility for the proper monitoring and regulation of KSFUK to a mere tête-à-tête with a foreign regulator, the FME. The UK Government is undoubtedly liable to compensate KSFIoM depositors since it is clear that under the leadership of Mr. Hector Sants, the FSA failed to monitor and regulate KSFUK in a way that would have prevented the loss of 50% of its assets. Despite Treasury attempts to claim otherwise, KSFUK was a bank registered under the UK Regulator and NOT the Icelandic FME. A similar situation in fact, to that which the UK Government is overly keen to emphasise concerning the jurisdiction of the Isle of Man. Who condones such double standards as these?

The Bank of England ceded its role as a financial regulator to the FSA in 1997 when the Chancellor at that time, Gordon Brown, gave it independence over monetary policy. The encumbent Governor in 1997, Mr. Eddie George, is on record as having threatened resignation, warning Mr. Brown that the decision could leave the financial system more vulnerable than ever. How very prescient of Eddie George. The Economic Affairs Committee is now urging the Government to give key elements of the FSA's current role back to the Bank of England. How very conservative, how very late.

You refer to the Isle of Man’s Depositors’ Compensation Scheme (DCS) as though it were the Saving Grace, but how are depositors to be compensated (up to a maximum of £50 000 only) for the fruits of 10, 20, or more, years of their life’s labour taken from them – not by the failure of a bank, but by a bank failed by the egocentric orchestrations of an unrestrained Government?

I trust that you will take the trouble to seek and provide adequate answers to these questions and to press for an admission of responsibility opening the way to a just and honorable solution for the abandoned depositors of KSFIoM. Given the complexity of the matter, I would ask that my letter is transmitted to the appropriate person in the Treasury hierarchy. The depositors do not intend to go away and will continue to seek the real truth of this outrage, exposing as necessary the leaders of the present Government for their contemptuous and uncaring deeds.

Yours sincerely,


Do we still have a PR team?

  • lorraine
  • 14/10/08 14/07/10
  • unspecified
  • Offline
  • Wed, 27/05/2009 - 14:57

Can we get some publicity. GB calls for a worldwide support for his policy of guaranteeing depositors full return of funds yet a crown dependency ignores this and gets away with it although it causes loss and distress for British citizens. How can GB justify not taking action to at least protect his citizens if not the citizens of the dependency who are effectively snubbing HMG?

I have good contact with my local paper but they won't run with this because it is not local interest unless we can find a local resident (or perhaps ex pat resident) with a good back story: eg. scale of loss; devasting effect of loss; worthy pensioner; fought in WW2; interesting career/history/link to area etc. My story is apparently all too humdrum. Anyone with connections in Islington/Camden area if you're prepared to step forward please let me know.


Letter to Jack Straw

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Sun, 10/05/2009 - 10:24

Copy of letter sent to Jack Straw with copy of letter to Gordon Brown. I tried to email copies to Darling and Bell (alan [dot] bell(?)treasury [dot] gov [dot] im) - the latter bounced back with the message "delivery failed'!

Dear Mr Straw,

A PLEA FOR COMMON DECENCY AND NATURAL JUSTICE

Please find attached a copy of a letter I have sent today to the British Prime Minister concerning the desperate plight of thousands of honest British citizens, depositors with Kaupthing Singer & Friedlander in the Isle of Man (KSFIOM), whose life savings were cruelly taken from them last October as a direct result of actions taken by the British Government in protecting depositors in KSFIOM's sister bank in the UK and who have since been ignored and abandoned as unfortunate but apparently acceptable collateral damage.

I implore you to take the time to read this letter and ask yourself what you, as Secretary of State for Justice, can do to help right the blatant injustice which has been served on these unfortunate victims, caught up in the consequences of the Icelandic banking crisis through no fault of their own. I would ask that you do not simply pass this letter to the Treasury, who have treated us so shabbily in this wretched affair.

I understand that it is your ministry, Mr Straw, and not that of Mr Darling, which bears ultimate responsibility for the good governance and International relations of the Crown dependencies, including the Isle of Man, and that as such you are the person best placed to assist in finding a just solution. The fact that the Isle of Man is a separate jurisdiction has provided an all too easy excuse for the Treasury to wash its hands of the KSFIOM depositors whose funds had been placed in Kaupthing's UK bank for safe-keeping. But this is to ignore the obvious fact that, however inadvertently, the demise of KSFIOM was a direct and immediate consequence of the actions of the UK Government who must therefore accept a large part of responsibility. This was no ordinary bank failure; the Isle of Man bank was financially strong and not materially exposed to Iceland, having preferred to move a significant part of its funds to the UK. Whatever the strict legalities of the situation – and I am not suggesting that the law has been broken – I believe there is such as thing as natural justice. It seems to me that this is a clear case in point where natural justice should and could prevail over blinkered and small-minded interpretations of legal texts.

I trust that I and my fellow depositors can count on you, Mr Straw, as a man of compassion, to act now to redress the gross injustice we are suffering at the hands of our leaders. This travesty of justice has lasted too long – seven months already – and many are becoming desperate.

Yours sincerely,

xxx
KSFIOM depositor


Reply from MoJ

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Thu, 21/05/2009 - 15:43

Received today a useless bland "reply" from Fiona Salem (Crown Dependencies Policy Branch, International Directorate) at the MoJ in reply to mine of 10 May (posted above); the standard 2-page recital of the "facts" of the case (not worth reproducing here - we've seen it before anyway). I've replied as below ...

Dear Fiona,

Thank you for your email and attached letter dated 21st May in reply to mine of 10th May. With all due respect however, while I thank the ministerial teams for their expressions of sympathy with the depositors of KSFIOM, I have to say that I regard this as a less than adequate response to our dramatic situation!

I do not know whether you or anyone in the Justice Department actually read my letter – let alone the letter to Mr Brown which I had attached to it – but I have to say I have serious doubts since your reply completely fails to addresss the specific points I raised. Indeed, I have already seen this factual account several times; it is clearly a stereotyped reply sent out automatically in response to any enquiry regarding this affair. If you - or anyone else - had read my letter with attention, you would have realised that over the seven long months since this debacle began, I have become only too painfully aware of all the 'facts' related therein.

I am therefore taking the liberty of writing again in search of a more helpful reply. I firmly believe that, notwithstanding the strict technicalities reviewed in your letter, there remains scope for intervention on the part of the British Government to enable the ways and means to be found to right the terrible injustice wrought upon a group of unfortunate victims caught up in the consequences of the Icelandic banking crisis through no fault of their own. This is what I understand by natural justice and is the reason why I addressed my letter to the Ministry of Justice.

The Treasury Select Committee appear to share this view. Their recent report into the Icelandc banking crisis clearly recommends that the governments of the UK and the Isle of Man should work together to seek a just solution. The point made in my letter was that, in view of the apparent (and unexplained) reluctance of the Isle of Man Government to ask for assistance in the matter, it is surely not beyond the wit of the British government to make the first move by admitting to a certain degree of responsibility, however unintentional, in the demise of Kaupthing Singer & Friedlander (IoM)?

The crucial paragraph from my previous letter to which I would like a considered response read as follows:

« I understand that it is your ministry, Mr Straw, and not that of Mr Darling, which bears ultimate responsibility for the good governance and International relations of the Crown dependencies, including the Isle of Man, and that as such you are the person best placed to assist in finding a just solution. The fact that the Isle of Man is a separate jurisdiction has provided an all too easy excuse for the Treasury to wash its hands of the KSFIOM depositors whose funds had been placed in Kaupthing's UK bank for safe-keeping. But this is to ignore the obvious fact that, however inadvertently, the demise of KSFIOM was a direct and immediate consequence of the actions of the UK Government who must therefore accept a large part of responsibility. This was no ordinary bank failure; the Isle of Man bank was financially strong and not materially exposed to Iceland, having preferred to move a significant part of its funds to the UK. Whatever the strict legalities of the situation – and I am not suggesting that the law has been broken – I believe there is such as thing as natural justice. It seems to me that this is a clear case in point where natural justice should and could prevail over blinkered and small-minded interpretations of legal texts. »

I trust you will now bring these questions to the attention of Mr Straw and look forward to your further reply.

Respectfully,


More from MoJ...

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Fri, 22/05/2009 - 10:23

Amazingly rapid reply from Fiona to my email of ... yesterday! Seems it does sometimes pay to persist...

So I've again replied incorporating some of the information in LJ's blog ("IF YOU THINK ...") posted yesterday on the status of IoM as a Crown dependency. Fiona's reply and my latest follow:

Dear Fiona,

Many thanks for your speedy reply to my email of yesterday. I'm sorry if I may have seemed a bit harsh, but you know people really do get very angry when they feel they are being fobbed off, particularly after seven months of anguish ...

I was of course aware of the vote on 19th May, in which I participated (despite the fact that the relevant documents and voting forms have still not arrived here in France!) and of the forthcoming court hearing on 27th May.

I am pleased to note that HM Treasury has been "in regular contact with the Governments of the Isle of Man and Guernsey" and sincerely hope that we may soon be informed of the outcome of these contacts. The same applies to the contacts with the Icelandic authorities. But it has to be said that as of now little if any information has been forthcoming.

With respect to the status of the Isle of Man as a self-governing dependency of the Crown, my understanding is that things may not be quite as clear cut as you suggest. The 1972/73 Royal Commission on the Constitution (the Kilbrandon Report), whilst acknowledging a degree of uncertainty, states as follows:

“the United Kingdom Government are responsible for defence and international relations of the Islands, and the Crown is ultimately responsible for their good government. It falls to the Home Secretary to advise the Crown on the exercise of those duties and responsibilities. The United Kingdom Parliament has the power to legislate for the Islands, but it would exercise that power without their agreement in relation to domestic matters only in most exceptional circumstances”.

This view was re-iterated in a debate in the House of Commons in 1998:

“[The UK] Parliament does have power to legislate for the Island without their consent on any matter in order to give effect to an international agreement”
Source: Hansard, House of Commons Debates, 3 June 1998, cols. 471 and 465

I understand that since then the MoJ has replaced the Home Office, but the wording appears clear and unambiguous; the Crown is ultimately responsible for the IoM's good government. It is clear that the UK Parliament does have power to legislate for the Island without its consent on any matter in order to give effect to an international agreement.

I believe that the currect situation does indeed constitute "exceptional circiumstances" and moreover that, in the light of HMG's stated position in support of a pan-European policy of safeguarding deposits in the context of the current banking crisis, the use of Parliament's power to legislate for the Island could indeed be justified in the event that the Isle of Man Government continues to disregard this policy.

I am sure these points have not escaped the notice of Mr Straw and the MoJ, and would be interested to know their views in the matter.

Thank you again for your cooperation and good wishes.

Sincerely,
xxx

Le 22 mai 09 à 10:59, Salem, Fiona a écrit :

Dear xxx,

Thank you for your email of yesterday.

I read your letter and I've noted the points you've made in your email below.

I hope the following points will be of some reassurance:

  • HM Treasury has been in regular contact with the Governments of the Isle of Man and Guernsey.
  • The UK Government will continue to represent the Crown Dependencies in its negotiations with Iceland and is continuing to work with the Icelandic authorities and through the IMF to ensure fair treatment for all depositors and other creditors.

  • I must reiiterate that because the Isle of Man is not part of the United Kingdom but is a self-governing dependency of the Crown. It has its own fiscal system and it has autonomy in domestic matters. This means that arrangements for depositors in banks in the Isle of Man are a matter for the Government of the Isle of Man.

  • We understand that a vote was taken on the KSF IoM Scheme of Administration on 19 May and the result of the ballot will be announced on 27 May in the High Court. In respect of the parental guarantee under the Scheme of Arrangement, the ability to claim from Kaupthing Bank hf is not affected by the implementation of the Scheme of Arrangement. http://www.kaupthingsingers.co.uk/Pages/4079

  • Otherwise, deposits with KSF IoM will be subject to the Isle of Man Depositors’ Compensation Scheme (DCS). We understand that under the DCS, a maximum of £50,000 compensation is payable per individual and a maximum of £20,000 for companies, trusts etc.

  • You may be aware that Michael Foot was asked by the Chancellor of the Exchequer to conduct a review of the long-term opportunities and challenges facing the British Crown Dependencies and Overseas Territories as financial centres.
    The interim report was published on 21 April 2009. It summarises initial discussions with British Crown Dependencies and Overseas Territories on a range of issues facing British offshore financial centres in the current economic climate, including: financial supervision and transparency; taxation, in relation to financial stability, sustainability and future competitiveness; financial crisis management and resolution arrangements; and international co-operation.

The next stage of the review will involve a wider consultation, providing an opportunity for all interested parties to contribute to the review. Fuller conclusions will follow in the fourth quarter of 2009. Its scope includes Jersey, Guernsey, and the Isle of Man. You may wish to contribute to the Review. While the Review will take all views into account, it cannot respond to individual grievances. Comments should be sent by e-mail to ofcreview(?)hm-treasury [dot] gov [dot] uk or by post to:

OFC Review Team
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ

More information can be found at:
http://www.hm-treasury.gov.uk/indreview_brit_offshore_fin_centres.htm
http://www.hm-treasury.gov.uk/d/indreview_foot_review_progess_apr09__pu7...

We await the outcome of the announcement on 27 May.

With best wishes,

Fiona


.. and yet more from MoJ !

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Fri, 22/05/2009 - 10:47

Record response time - this one arrived just over one hour after mine was sent! Interesting new (to me) quote from Lord Bach.

Not sure where I can go from here though - maybe a short pause is called for while DST do their stuff ...

Dear xxx,

Thank you for your email and for the points you raise therein.

No need to apologise - we understand that the circumstances in which you find yourselves cannot be easy.

In respect of your email, perhaps the definition of good government set out below might be of some clarification:
Written Answers

Wednesday, 3rd May 2000.

3 May 2000 : Column WA180

Crown Dependencies: Good Government

Baroness Strange asked Her Majesty's Government:

Whether they are responsible for the "good government" of the Crown Dependencies; if so, how they define "good government"; and in what circumstances they would intervene to that end in the affairs of the Dependencies.[HL2134]

Lord Bach: The Crown is ultimately responsible for the good government of the Crown Dependencies. This means that, in the circumstances of a grave breakdown or failure in the administration of justice or civil order, the residual prerogative power of the Crown could be used to intervene in the internal affairs of the Channel Islands and the Isle of Man. It is unhelpful to the relationship between Her Majesty's Government and the Islands to speculate about the hypothetical and highly unlikely circumstances in which such intervention might take place.

On the matter of on progress made by the respective authorities on the issue of KSF IoM, the following link to a statement that Lord Bach made as part of the Government Response to the Committee's First Report of Session 2008-09 may help be of interest to you.

http://www.publications.parliament.uk/pa/cm200809/cmselect/cmjust/323/32...

Best wishes,

Fiona


Fiona at MoJ - latest installment

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Wed, 27/05/2009 - 09:17

It seems the govt response to TSC report is on the way (see latest exchange of emails with friend Fiona at MoJ below) ...

I also received by post a 5-line letter dated 19 May from a Mr S Caine at n° 10 telling me that "Mr Brown receives thousands of letters each week and regrets he is unable to reply personally to them all". My letter has been forwarded to ... HM Treasury - who else? - "so that they may reply to you direct". I await their reply!.

From MoJ:

Dear xxx,

Thank you for your email of 23 May 2009.

I can advise that the government's response to the Treasury Select Committee report on the Banking Crisis: The impact of the failure of the Icelandic banks will be published in June. We cannot pre-empt what it may cover, however, in the interim, you may wish to address your query to HM Treasury. As stated, this government department is representing the interests of the Isle of Man in negotiations with the Icelandic authorities and has been in regular contact with the Isle of Man.

Best wishes,

Fiona

-----Original Message-----
Dear Fiona,

Thank you for your latest reply.

I note with interest Lord Bach's statement of 3rd May 2000, which appears to confirm what I had understood concerning the ultimate "good government" of the Crown Dependencies.

In the light of this, I would like to ask whether the British Government has taken steps to formally encourage the Isle of Man Government to comply with the British Prime Minister's public statement recommending that all jurisdictions should vouchsafe savers?

It would indeed appear strange, to say the least, that a jurisdiction for which the UK has ultimate responsibility should be acting at odds with this recommendation. If no such approach has been made, I would respectfully suggest that this issue lies clearly within the domain of the Ministry of Justice. Maybe you can do something to bring this to the notice of whoever is in a position to address the question and act as necessary?

Thank you again for your assistance.


Forthcoming govt response to TSC report

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Wed, 27/05/2009 - 09:49

PS to previous post:

I asked Fiona how I could be informed when the govt response is published (in June). Here is her helpful reply:

"I am happy to alert you as to its publication and will forward a copy to you electronically, and I am similarly happy to do the same for any other individual with the same interest in the government's response.

I've made a note in my electronic calendar to check on 8 June and will contact you accordingly."

Note she now mentions 8 June - that's soon! So, if you want to be on her list...

Fiona [dot] Salem(?)justice [dot] gsi [dot] gov [dot] uk


HMG and FSA responses to TSC report

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Sun, 05/07/2009 - 18:21

The responses from HMG and FSA were published by TSC on 19 June (Fiona kept her word and emailed me):
http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtreasy/656/...

I have just spent several hours dissecting them and have sent the following email to the TSC along with my detailed comments (with copy to DST):

"For the attention of members of the Treasury Sub-committee

Please find attached my comments on the Responses from the Government (Treasury) and the FSA on your Report on the Banking Crisis: impact of the failure of the Icelandic banks, in so far as they relate to the demise of KSFIoM.

As a KSFIOM depositor who has followed this sorry affair closely, I remain unconvinced by many of the 'explanations' which have been given and the continued refusal of HM Government to accept at least part of the responsibility for the demise of our bank. Many key questions remain unanswered and shrouded in mystery and doubt, leaving a strong impression that the Authorities have something to hide.

It is my opinion, and that of many of my fellow depositors, that only an independent Public Inquiry can now hope to throw the necessary light on the events leading up to and following the demise of KSFUK and KSFIOM and prove or disprove this widely held belief. Whatever the contributory role and inadequate response of the Isle of Man authorities, the demise of KSFIOM was essentially brought about by actions which began in the United Kingdom. It would thus appear entirely appropriate that such an inquiry be undertaken in the UK.
I trust I can count on your support in this matter and that my comments may be of some help in your further deliberations."

I also sent a copy to Fiona, with the following message:

"Thank you for alerting me, as promised, to the publication of the Responses to the TSC Report of the Government (Treasury ) and the FSA .

I was away from home (in UK!) at the time, but have now found time to study the Report in detail.

For your information, I attach a copy of some detailed comments which I have today emailed to the Treasury Sub-committee at treascom(?)parliament [dot] com. If you have time to read it, you will see that I remain unconvinced by many of the responses and disappointed (though not surprised) that the Government continues to refuse to admit any responsibility whatsoever in the demise of KSFIOM. With respect to the TSC's recommendation that "the UK authorities should work with the Isle of Man and Guernsey authorities to resolve these issues", the only response is that "HM Treasury has been in regular contact with the Governments of the Isle of Man and Guernsey"; there is no word of the outcome of these contacts and nothing to suggest that anything will ever be resolved.

I realise that this is primarily the domain of the Treasury, although I still believe the Ministry of Justice could play a vital role in 'persuading' the Isle of Man Government to comply with the Prime Minister's recommendations that all jurisdictions should vouchsafe savers. Recognition by HMG of the causative role played by the Chancellor in the demise of KSFIOM would allow for a mutually acceptable solution in which the cost this debacle would not be paid entirely by IOM Treasury. I believe that the whole truth has not yet been told and that only an independent Public Inquiry in the UK (where the events began) can now hope to throw light on the whole sorry affair and bring relief to those who continue to suffer the consequences of this grave injustice.

The following quote from a politician of a by-gone era seems particularly apposite to this situation. Maybe you could forward it to Mr Straw and suggest he might reflect on it?

"It is not what a lawyer tells me I may do;
but what humanity, reason and justice tell me I ought to do."
Edmund Burke (1729-1797)

How about it Mr Straw? Is the British sense of fair play and justice truly dead and buried? Or are you prepared to stand up and be counted?

Thanks again for trying to help,
xxx"


Response from Treasury Committee

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Wed, 15/07/2009 - 15:07

15 July 2009

Dear xxx,

I will ensure that your response is drawn to the attention of all the
members of the Treasury Committee.

Thank you for taking the trouble to write to us.

Kind regards

Gabrielle Henderson
Committee Support Assistant

Treasury Committee
House of Commons
1st Floor
7 Millbank
SW1A 0AA
Tel: 0207 219 1975

-----Original Message-----
5 July 2009

Dear Sir/Madam,

For the attention of members of the Treasury Sub-committee

Please find attached my comments on the Responses from the Government
(Treasury) and the FSA on your Report on the Banking Crisis: impact of
the failure of the Icelandic banks, in so far as they relate to the
demise of KSFIoM.

As a KSFIOM depositor who has followed this sorry affair closely, I
remain unconvinced by many of the 'explanations' which have been given
and the continued refusal of HM Government to accept at least part of
the responsiibility for the demise of our bank. Many key questions
remain unanswered and shrouded in mystery and doubt, leaving a strong
impression that the Authorities have something to hide.

It is my opinion, and that of many of my fellow depositors, that only
an independent Public Inquiry can now hope to throw the necessary light
on the events leading up to and following the demise
of KSFUK and KSFIOM and prove or disprove this widely held belief.
Whatever the contributory role and inadequate response of the Isle of
Man authorities, the demise of KSFIOM was essentially brought about by
actions which began in the United Kingdom. It would thus appear
entirely appropriate that such an inquiry be undertaken in the UK.

I trust I can count on your support in this matter and that my comments
may be of some help in your further deliberations.

Sincerely,


Latest from Fiona Salem and my riposte

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Wed, 08/07/2009 - 06:51

Dear Fiona,

That's nice of you! But what I'd really like to know is whether you are going to do anything more with them, and if so what?

I'm sure you will understand my concern and impatience.

Hoping to hear from you again soon.

Regards,
xxx

Le 7 juil. 09 à 13:52, Salem, Fiona a écrit :

Dear xxx,

Thank you for your letter. I have taken note of your comments.

Best wishes,

Fiona

Up to now she has always replied, and usually quite soon (unlike Treasury). As uptight says below, I think we should stick with it - she seems sympathetic and assures us her Ministers are too ....


Response from Fiona Salem

  • uptight61
  • 14/10/08 n/a (free)
  • a depositor
  • Offline
  • Sat, 04/07/2009 - 08:50

Here's a response I got from Fiona Salem at the Crown Dependencies Policy Branch when i complained to her that she was not answering our queries/she was brushing us off. She again did not answer our questions - stated that she considers the whole Government to be responsible for negotiations with Iceland, not just MofJ, when I asked her why the MofJ had not "prodded" the Isle of Man Government to reimburse us for our lost savings when all other countries (barring Guernsey which is also another wretched Crown Dependency) have and Gordon Brown has stated that no British citizens have lost a penny as a consequence of the latest financial crisis.

Dear Mr *****,

I am sorry if you feel that I have provided inadequate responses to correspondence received from members of the KSF IoM Depositors' Action Group.

As a civil servant, mindful of my duty to the public, and along with ministerial teams, sympathetic to the situation that KSF IoM depositors find themselves in, I have attempted to respond to queries and correspondence from depositors as promptly and comprehensively as I can.

Although the Ministry of Justice is the Government Department with responsibility for managing the UK’s relationship with the Crown Dependencies, HM Government, as a whole, shares these constitutional responsibilities. The responsibility for negotiations was delegated to HM Treasury as it is the UK Department with the necessary expertise.

Our team has consulted on a number of occasions with HM Treasury, the department representing the interests of the Isle of Man in negotiations with the Icelandic authorities, so as to ensure that the information we provide you with is both accurate and as detailed as possible.

Many of the queries raised by depositors in correspondence to the Ministry of Justice relate to decisions made by the FSA and HM Treasury and are for the FSA and HM Treasury to answer because both are in possession of the requisite financial competence.

You may find the Government's and the FSA's 19 June 2009 response to the Treasury Committee's 4 April report on the banking crisis helpful. I did alert a number of depositors to it when it was first published.

You can find it at

http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtreasy/656/...

Best wishes,

Fiona

Fiona Salem |Crown Dependencies Policy Branch, International Directorate | Ministry of Justice | 7.12 | 102 Petty France SW1H 9AJ 0203 3343874 | fiona [dot] salem(?)justice [dot] gsi [dot] gov [dot] uk


Salem follow-up

  • uptight61
  • 14/10/08 n/a (free)
  • a depositor
  • Offline
  • Sat, 04/07/2009 - 09:20

Responded to her letter with this. Will post her eventual reply...

Dear Fiona,

Many thanks for your prompt response to my earlier query.

However, it appears that you are not aware of the KSF Depositors Action Group grievances that I was referring to. I was not referring to the lack of progress on the Isle of Man/Iceland negotiating front but to the fact that all other countries (bar another Crown Dependency, Guernsey) have reimbursed their depositors in full with regard to the demise of KSF operations. This action by them flies in the face of what Gordon Brown has gone on record as saying ie. that NO British citizens have lost money as a consequence of the financial crisis. Gordon Brown has also recommended that all countries guarantee bank depositors 100% in this time of financial crisis;why, then, has the Isle of Man, a Crown Dependency over whom the British Government (your department!) has the ultimate power to legislate, been allowed to avoid following his edict?

I realise that you are a civil servant, Fiona, (and consequently will still be around long after this lot are defeated at the polls!)but hopefully you can pass on depositors' anguish and pain with regard to this matter to the politicians in the Justice Department (eg. Jack Straw) who have the clout and the power to carry out their remit - that of providing JUSTICE TO ALL.

Sincerely Yours,



Futher correspondence with Salem

  • uptight61
  • 14/10/08 n/a (free)
  • a depositor
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  • Wed, 08/07/2009 - 05:54

Here's the reply I got to the above and my subsequent response....

Dear Mr *****,

Thank you for your email of 4 July 2009.

I want to assure you that Ministers are aware of and sympathetic in respect of the situation in which KSF IoM depositors find themselves in.

Best wishes,

Fiona

Dear Fiona,
Thank you again for your prompt reply.

I appreciate you forwarding the information that Ministers are aware of and sympathetic of the situation that we find ourselves in. This, however, does not enable the return of our deposits. It has been 8 months since this debacle took place and no concrete action has seemingly been taken by your Government. This despite the recommendation of the Treasury Select Committee that both the Isle of Man Government and the UK Government work together to come up with a solution satisfactory to all parties concerned.
Please forward to the Ministers concerned that we are not satisfied with their actions to date and that we require that justice be served.
Respectfully yours,


Others should get on this lady's case - I think that if we badger her enough, something could come of it.


Gov Response to TSC Report

  • caledonia
  • 14/10/08 30/09/09
  • a depositor
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  • Wed, 27/05/2009 - 10:15

Just to say I have emailed her to request copy ..... and will keep emailing her as suggested.


@anrigaut

  • icdbrazil
  • 10/10/08 30/11/09
  • a depositor
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  • Fri, 22/05/2009 - 11:15

I had exactly the same response from Fiona at MOJ- I reverted with:

¨ It would appear therefore that the Wikipedia content is indeed correct, in respect of ultimate good government. ´Ultimate good government´ may be somewhat subjective, but if the British Prime Minister recommends publicly that all jurisdictions should adopt a certain policy, it would appear quite bizarre for a territory for which the UK is ultimately responsible for, not to be (in the first instance at least) formally encouraged to comply.

When the British Prime Minister makes a public statement, I´m sure that like myself, the British public expect to be able believe that he is being sincere. Gordon Brown made a public statement recommending that all jurisdictions should vouchsafe savers. ¨

Her response was that the information I was seeking comes under the HMT domain! I immediately reverted with my disagreement and suggesting that it was clearly within the MOJ domain and hence appropriate and correct for them to address the issue. Suggested she escalated issue.

Just keep at it!


@icdbrazil

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 22/05/2009 - 11:57

Thanks for the ideas - I'll try to keep at it!

How far into your 20 or so emails did this one come? It would be good to know how many more it will take to get to the end of the pre-prepared responses!


@anrigaut

  • icdbrazil
  • 10/10/08 30/11/09
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  • Fri, 22/05/2009 - 12:06

Regret to say that so far no response with any substance! But I intend to keep at it, I also think the more of us that do this the better - it has to feed up to the top and get us firmly on their radar eventually. Cheers.


e-mail addresses

  • chd
  • 13/10/08 30/09/09
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  • Fri, 22/05/2009 - 14:45

Can you give us the relevant e-mail addresses so that we can continue to target the right people?


@ swiss - MOJ email addresses

  • icdbrazil
  • 10/10/08 30/11/09
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  • Fri, 22/05/2009 - 18:37

Fiona [dot] Salem(?)justice [dot] gsi [dot] gov [dot] uk (Phone: 0203 3343874 )

hugo [dot] deadman(?)justice [dot] gsi [dot] gov [dot] uk

Rose [dot] Ashley(?)justice [dot] gsi [dot] gov [dot] uk

I have the other phone numbers somewhere but I´m on the road - will try to locate and send later.

Keep up the pressure & be tenacious, revert every time a load of waffle comes back. If we ALL do the same they will wake up and take notice.


spoke to Rose ashley head of crown dependencie

  • hippychickrobbed
  • 03/11/08 31/05/09
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  • Sun, 28/06/2009 - 15:54

I spoke to Rose Ashley head of crown dependencies when I was in the uk a month ago, yes its called keep at it. i spoke to her about the misery of this all, no matter how hard it sometimes looks we really have to persist. I think we need to keep targeting those 3 above, come on everybody this what its all about. When I have time whatever time that I have free i write or would ring if i could, this is what this is all about.


What I can say is that I've

  • expat
  • 10/10/08 31/05/09
  • unspecified
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  • Sun, 28/06/2009 - 18:09

What I can say is that I've now got Treasury down to responding to some of the specific questions, their silence on some issues, holding or getting an account in UK for instance speaks volumes. What is also interesting is how they clutch at straws, I openly admit I mistakenly used the word frozen in one letter when referring to our funds. My god they made hay our of telling me the fund we're frozen. Now admit it was the wrong word, I sued to to grab their attention, but it was interesting to see how much time was used up in correspondence on that issue.
I might also say that there seems to be an inference in correspondence I am receiving that the Chancellor is trying to shut this story down, it just an opinion, but one from a very interesting source, an MP! Given advice passed to me I would say it is vital now that we really get onto MPs so they act in concert on this issue if they support us. Please, please keep writing to them. This is the crux of the issue, to get HMG to recognise us and our plight, that the IoM should also be doing this goes without saying. Why they don't make a bigger fuss is of course the $64,000 question isn't it. But it doesn't stop us making a fuss. What matters is that we get more MPs to get behind this, that is the action that all everyone can assist in no matter what group or individual they give their proxy to. After 8 months I've at last got my local UK to respond, it took copying an email to him to the BBC, but it got a response!
Hit them with facts, ask difficult questions such as why did the chancellor say Iceland would not stand by their obligations when no transcript seems to support that; ask why G Brown wants the USA to return Lehmans money, but won't return not ours; ask about David Whelans money being returned. I'm sure you can all think of much more.
BUT DON"T STOP WRITING PLEASE.


@anrigaut re MOJ

  • icdbrazil
  • 10/10/08 30/11/09
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  • Thu, 21/05/2009 - 17:27

FYI I have been chasing MOJ on the same issues via email and by phone. My first contact there was Hugo (Lord Bach´s PA) then Rose (Head of Crown Dependencies unit), then your friend Fiona. My thread of emails with Fiona is up to about 20 - I get the impression that she would like to be able to help but is not permitted to. Load of old waffle and general background comes back each time, and each time I revert asking for specifics, and suggesting she escalates the issue.

Lets keep it up. If enough of us do this it will get on the MOJ senior staff radar. Also suggest that if MOJ had constant (& I mean constant) phone calls from KSF IOM depositors demanding to speak to Jack Straw or Lord Bach (ok so thats not going to happen, but its pressure) and / or asking exactly what they have done about it so far, that would get their attention. Use Skype - costs almost nothing. Email them, call them, bug them until they do wake up and act in an honest fashion.


icdbrazil our friend Fiona..

  • hippychickrobbed
  • 03/11/08 31/05/09
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  • Fri, 22/05/2009 - 12:08

icdbrazil I too get sympathetic email from her I , the last one she sent me from the moj was that there will be a financial review of the islands, its how do we progress it from there. How do we get Lord Bach and Jack straw to move this on..


@HCR: Tell her - nicely but firmly

  • anrigaut
  • 19/10/08 30/10/09
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  • Fri, 22/05/2009 - 20:47

Tell her - nicely but firmly - that sympathy just isn't enough! How do you live on sympathy? We need Bread - in other words action from the top. Keep at it. Try to ask direct questions; eg Has HMG attempted to 'persuade' IOMG to respect the British PM's recommendation that ALL jurisdictions vouchsafe depositors? If not, why not??