BBC Radio interview with Derbyshire building society depositer, radio 4 ipm, on 18.02.09 @ 5-6pm

  • upthecreek
  • 26/10/08 n/a (free)
  • a depositor
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Posted: Tue, 17/02/2009 - 15:44

Hope this interview serves our cause. by up the creek

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R4 Intervie

  • Alastair
  • 10/10/08 30/09/09
  • a depositor
  • Offline
  • Fri, 20/02/2009 - 15:22

Did it happen, how did it go?


Derbyshire/Nationwide

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
  • Offline
  • Tue, 17/02/2009 - 19:08

Dear Messrs Howe and Beale,

I am writing as one of a group of thousands of depositors who originally opened their accounts with the Derbyshire Building Society in the Isle of Man, but were transferred to Kaupthing Singer and Friedlander IoM in late 2007. We have grave concerns at the manner in which the Derbyshire offloaded its customers to the 'care' of the Kaupthing group and these concerns have been highlighted by the most recent revelations of Mr Anthony Shearer. You will likely be aware of the evidence given by the Chief Executive of the former Singer and Friedlander Group plc at the Treasury Select Committee Meeting on the 3rd February, but if that is not the case would you please see the attached transcript of the evidence as stated to the TSC by Mr Shearer.

Given the concerns of Singer and Friedlander's management and Board in 2005, it would not be unreasonable to believe that similar concerns would have been discussed and decisions made by the Derbyshire's directors and management. As a very long-term depositor, I believe the Derbyshire building society - whose responsibilities have now been assumed by the Nationwide - should not have encouraged this take-over, which has resulted in the endangerment of thousands of their loyal customer's life-savings. I was with the Derbyshire subsidiary when it commenced operations in the Isle of Man in the early '90s whereby I transferred some £13,000 into my first account (all the money I had) and left the UK in search of another life overseas. Fifteen years later my deposit had grown to £xxx,000 swollen by the proceeds of two 25 year life endowment policies and one 20 year policy as each matured. Cumulative interest and diligent saving brought about a steady increase in my savings with the intention of funding my return to the UK; buying a house, and seeing my children finish their schooling. All of these goals – the whole reason for saving so hard for so many years – were wiped out in a moment less than a year after the acquisition by Kaupthing. My bitterness knows no bounds; having been a customer of the Derbyshire IoM for so many years I had no reason to disbelieve the building society's strong encouragement to continue banking with Kaupthing Singer and Friedlander and duly followed what I believed to be sound advice, but now it transpires that knowledge of weaknesses and concerns with the Kaupthing group were already known to those inside financial services and the banking fraternity – which would not have gone unnoticed by the Derbyshire building society. Selling out the customers of the building society's Isle of Man subsidiary was done without care or concern of the consequences save only to satisfy Derbyshire's desire to dispose of its involvement in it's offshore arm.

The Isle of Man court will consider yet another application for liquidation of Kaupthing Singer and Friedlander Isle of Man (KSFIoM) on 19th February. The consensus of opinion being that there is no proposal for refinancing the bank on offer, and it is most likely that this time the court will be obliged to place KSFIoM into liquidation. My chances of receiving the return of 100% of my savings will dwindle to nothing in this event together with the savings of thousands of my fellow depositors. Depositors will then be left with no alternative but to seek redress via litigation. I am therefore advising you that the Nationwide, by way of its assumption of responsibilities on acquiring the Derbyshire Building Society IoM, is together with the UK financial regulator (FSA), currently under consideration of legal action.

There is a window of opportunity that might avoid this outcome; being that the Nationwide IOM is ideally placed to step in and take over the deposits of KSF IOM (approx £850ml).

Simply stated, the Nationwide IOM could:
1. assume and manage the KSF IOM loan book (value £420mln)
2. receive the cash already held by KSF IOM liquidator (approx £140mln)
3. accept a contribution from the IOM Government and participating Banks (approx £350mln)
4. assume the legal claim for the KSFIOM monies frozen in the administration of KSFUK (approx £400mln)

Kindly give this matter Board level attention at your earliest convenience and before the court hearing on 19th February. This is an opportunity for the Nationwide to set matters right and avoid the consequences of what could be embarrassing and damaging litigation.

Best regards,


Reply from Nationwide

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
  • Offline
  • Tue, 17/02/2009 - 19:32

Dear Mrxxxxxxxxx

Thank you for your e-mail dated 11 February 2009 addressed to
Nationwide's directors. The directors have considered your
correspondence and have asked me to respond on their behalf.

The current situation in respect of Kaupthing is regrettable and we are
sorry that you have been affected.

In December 2007, Derbyshire Building Society ("DBS") made a considered
decision in good faith to sell The Derbyshire (Isle of Man) Limited (the
"Company") to Kaupthing. This transaction received the requisite
regulatory approvals from the Icelandic and Isle of Man authorities. On
the completion of the sale to Kaupthing, the guarantee provided by DBS
in respect of the Company's liabilities terminated and therefore
Nationwide, as DBS's successor, has no further responsibility for the
Company (which currently exists as Kaupthing in the Isle of Man) or its
liabilities.

Yours sincerely

Liz Kelly

Head of Legal

Dear Liz Kelly,

Thank you for your prompt reply. Can I ask if this is your final comment in this matter as I now wish to pursue the case with the Financial Ombudsman? I believe your company should inform me of this right?

Sincerely,

xxxxxxxx

Dear Mrxxxxxxx

Thank you for your e-mail.

My previous e-mail was the final response.

In respect of your question, there was no referral to the Financial
Ombudsman Service (FOS) in my e-mail of 13 February 2009 as the FOS
adjudicates on complaints concerning the provision of financial services
in the UK. The FOS does not have jurisdiction over the provision of
financial services in the Isle of Man.

Yours sincerely,

Liz Kelly

Head of Legal


PLEASE NOTE I am not the depositor due to talk on Radio 4, but this seemed an opportune forum to post this recent correspondence


"On the completion of the

  • SgKZ
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Wed, 18/02/2009 - 08:42

"On the completion of the sale to Kaupthing, the guarantee provided by DBS
in respect of the Company's liabilities terminated and therefore
Nationwide, as DBS's successor, has no further responsibility for the
Company (which currently exists as Kaupthing in the Isle of Man) or its
liabilities."

Of course Nationwide doesn't have responsibility for Kaupthing or its liabilities but it does have responsibility for actions the company it bought out may have done. I think they are being very economical with where their culpability lies. The whole point of performing due dilligence when buying a company entails checking the potential skeletons that might be in the cupboard. You buy it warts and all.

A few years ago, I had to assist in the preperation of litigation against a docker's employer that ceased to exist over 30 years ago. The current entity being sued for the actions of the defunct employer was British Waterways; its link to the defunct docker's employer was nowhere near as clear as Nationwide's is to The Drbyshire.

Also, The Derbyshire should have had some professional indemnity cover (unless of course the IOM's cock-eyed FSC rule applies in the UK too). That insurer is still liable for any actions the insured took during the period of cover.


Nationwide contd...

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
  • Offline
  • Wed, 18/02/2009 - 12:25

Dear Liz Kelly,

Thank you again for your prompt reply.

I note your comment that the FOS has no jurisdiction over the provision of financial services in the Isle of Man. However, my complaint is levelled at the Nationwide Building Society which is, I believe, registered in the UK. That being the case then I will need to approach the UK FOS and not the IoM FOS and present my full suite of evidence to the former?

Sincerely


IC Letters to/reply from FSA

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
  • Offline
  • Thu, 19/02/2009 - 20:26

FSA Complaints Team
Corporate Services
The Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS

8th February 2009

Dear Sir/Madam,

I am writing to you as one of a group of depositors who collectively have/had savings in excess of £35Million in Kaupthing Bank Isle of Man, British Isles. This letter is a call for evidence (personal or in writing) from the FSA regarding its actions, due diligence, and steps taken to ensure that the interests of depositors being transferred to Kaupthing IOM were properly protected during and after the sale of the Derbyshire Building Society subsidiary in the Isle of Man to Kaupthing h.f.; and subsequently in the months leading up to the collapse of Kaupthing IOM following its sister bank in the UK being placed under Administration by action of the FSA under direction of the UK Treasury.

In order to help avoid liquidation of KSFIoM and lengthy litigation we have called upon the Treasury to:

a. release the Kaupthing Singer & Friedlander Isle of Man (KSFIOM) assets (amounting to some £550M) held under a Treasury Transfer Order in KSFUK.

b. or; provide a preferential loan to the IoM Government for the sum of those assets pending liquidation of KSFUK to enable the IoMG to repay depositors in KSFIoM their life-savings lost to them following Treasury action carried out in the UK. Any shortage in monies owed to the UK Treasury not made good by the liquidation of assets can be pursued by the Treasury in accordance with the mandate issued by the Ministry of Justice (responsible for the affairs of the Crown Dependencies) for the Treasury to act on its behalf in negotiations with the Icelandic authorities to ensure that the guarantee provided by Kaupthing to the customers of it IoM subsidiary are upheld. The duties of this delegation to the Treasury are enshrined in the constitutional rights of the Isle of Man to expect the UK Government to act on its behalf in matters of International relations as the Island is not a Sovereign State.

If action on the above is not taken, then come the 19th February uncertainty concerning KSFIOM assets held in KSFUK will likely bring about the liquidation of the Isle of Man subsidiary and thousands of depositors will pursue litigation as the only means left for them to recover their misappropriated savings. The FSA is a primary target for litigation, and the costs to reputation and pocket could be significant.

We understand from evidence given by Mr. John Aspden at the TSC Meeting on 3rd February 2009, that meetings took place between FSC/FSA/KSFIOM during the months leading up to 8th Oct 2008 and we request visibility of the minutes taken during these meetings and most importantly anticipate clarity on the following:

a. why was the advice of the board of Singer and Friedlander opposing the sale of the bank to Kaupthing disregarded by the FSA?

b. why were FSA regulations in respect of transferring money from KSFIOM to KSFUK not adhered to?

c. moving money from KSFIOM to KSFUK provided no real protection from the possibility of it being subsequently transferred to Kaupthing h.f. as the Icelandic parent bank could have called upon that money from either of its subsidiaries – so what reason does the FSA give for not pointing out this highly relevant fact to the FSC who, according to Mr. John Aspden, had sought advice from its senior and more experienced British regulator, the FSA?

d. what was the role of the FSA in the sequence of events leading up to 8th October 2008 and what action did it take, if any, to try and contain or lessen the effect of the financial calamity which befell thousands of British savers who were most properly and legally saving their monies in a licensed bank operating in a regulated jurisdiction of the British Isles?

e. what comment will the FSA make on the evidence given to the TSC meeting convened on the 3rd November 2008 in which it was said that it would not have been appropriate for the FSA to forewarn its fellow British regulator they were going to place KSFUK in Administration and contain all FSKIoM assets within that UK bank? Was any discussion entered into regarding the causal effects this would have on the lives and livelihoods of several thousand British retail depositors with life-savings tied-up in KSFIoM? Perhaps Lord Turner would claim it more appropriate to retain those assets from its adjacent jurisdiction in order to share them between the UK's Financial Compensation Scheme for the benefit of UK savers and the eventual return of bail-out monies to the Treasury? (A bail-out to which the KSFIoM savers were not privy.) Apparently this was not the position or viewpoint held during the recovery of the Bradford and Bingley subsidiary bank in the Isle of Man. Both Lord Turner and Lord Bach have made comments relating to the good relationship their repective departments had with the Island: weekly telephone calls, teleconferencing etc, but clearly this level of positive information exchange was not continued during the KSF crisis. Depositors even had to contend with being called alleged tax-dodgers using a tax haven in the Irish Sea - insults that were not suffered by B&B depositors. Victimising the victims in such a cheap and unsubstantiated manner was cruelly vindictive, discriminatory, and unneccessary; what justification could lie behind such abhorent behavior?

I very much look forward to your early reply on the above, together with all of my fellow depositors seeking similar answers. We are desperate people, most of us are near or in retirement and we have saved our monies conscientiously for the past decade or more. We did not expect to be deprived of our hard-earned retirement funds by a UK Government discriminating against us for choosing to bank quite legitimately in an adjacent fellow British jurisdiction and then piling on the agony by using our retail deposits for general distribution amongst UK wholesale depositors.

Yours faithfully,

xxxxxx

Dear Mrxxxxx

Thank you for your email of 8 February 2009.
I should explain that the purpose of the FSA Complaints Scheme is only to consider allegations of misconduct by the FSA arising from the way in which the FSA has carried out or failed to carry out its functions.

A copy of the FSA Complaints Scheme leaflet, based on our rules on Complaints against the FSA (COAF) is available on our website at:
http://www.fsa.gov.uk/pages/About/Complaints/pdf/complaint_leaflet.pdf.
It does not appear that your correspondence is a matter for consideration under the FSA Complaints Scheme.

If however you feel you have a complaint against the FSA, please outline this expressing it in terms of specific actions/misconduct against the FSA. Please substantiate any allegations with evidence you feel supports your claims.
In the circumstances, your email has been forwarded to the FSA Customer Contact Centre (e-mail: http://www.moneymadeclear.fsa.gov.uk/contactus.aspx, Tel: 0845 606 1234 or +44 20 7066 1000 from outside of the UK, Website: www.moneymadeclear.fsa.gov.uk) for their consideration.

Yours sincerely
Husayn Rahman
RDC/Complaints Team
Corporate Services
Financial Services Authority


FSA Complaints

  • Codpeace
  • 23/10/08 30/11/12
  • unspecified
  • Offline
  • Thu, 19/02/2009 - 21:48

I receceived exactly the same response today from the FSA.......


FSA Complaints

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
  • Offline
  • Fri, 20/02/2009 - 15:12

OK, the stage is set, now we just wait for Lord Turner to make a botch of it on the 25th and then write with these details to the FSA.


FSA Complaints

  • Codpeace
  • 23/10/08 30/11/12
  • unspecified
  • Offline
  • Fri, 20/02/2009 - 15:18

Agreed - will be watching closely on the 25th.......