CLAUSE 8.2.2 of SOA - EDWIN COE COMMENT PLEASE

  • hopeful
  • 11/10/08 31/05/09
  • a depositor
  • Offline
Posted: Mon, 06/04/2009 - 08:39

Clause 8.2.2 (page 21 of 74) of Gough’s Affidavit dated 3/4/09 proposes that under the SOA depositors will give up their right to commence proceedings against KSFIOM in the event that 100% recovery of assets is not achieved.

Despite the latest news that the TSC is recommending HMG and IOMG to work together to find a solution to our plight, it is vital that depositors keep all avenues open in the event that no favourable agreement is reached and that we have to litigate as a last resort against those responsible for the bank’s collapse in order to achieve full recovery.

The two prime targets on the IOM are the FSC and KSFIOM. The FSC were under no illusion, following advice from the FSA, that the proposed transfer of £557m to KSFUK would not be protected. I cannot imagine that IOMG will be persuaded to amend Clause 8.2.2, and therefore in the event that the SOA proceeds with the current wording, the directors of the bank will be let off the hook in one foul swoop. If we are then left with just the FSC I feel that our legal position will be compromised. If the directors of the bank remain not liable for their actions in this fiasco and given the incestuous relationship between the directors of the FSC and KSFIOM, the FSC will be given the opportunity to side step the main issue and argue that KSFIOM went ahead with the transfer of the £557m despite of their warning that the funds would not be protected. In these circumstances the FSC would apportion as much blame as possible towards KSFIOM and our case could be severely weakened.

So the bottom line is we vote for the SOA, which all parties (including the Provisional Liquidator) are currently recommending. However this will mean we have to accept the consequences that we could be left with a much weaker case against the parties that have been negligent should the politicians fail to come up with a solution to secure 100% of our savings. Come the end of May if Clause 8.2.2 remains in its present form I know which way I will be voting.

I expect that the DAG strategy team will take this matter up with Edwin Coe and seek their views on this critical issue.

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This is important

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
  • Offline
  • Mon, 06/04/2009 - 13:25

This is important thank you for pointing it out.