Manx govt funding to speed up compensation for KSF IoM depositors
Hannah Stodell - 16-Jul-2009
The Isle of Man parliament has approved a £193m government funding package which will accelerate full repayment for more than three-quarters of depositors with Kaupthing Singer & Friedlander IoM.
The new funding package will enable full DCS entitlement to be paid out to claimants by early September, bringing a 100 per cent return of deposits to more than three-quarters of KSF IOM depositors.
The money from Manx government reserves will expedite payments of up to £50,000 per individual depositor under the island’s depositors’ compensation scheme.
The funding comprises £73m in direct support from government under the DCS regulations and an interest-free loan of £120m. This comprises £21m in advance of levies due from banks, and £99m against future dividends payable by the liquidator.
The move follows the rejection of the Manx Treasury’s proposed scheme of arrangement as an alternative to liquidation, in May. The bank was subsequently placed into liquidation and the DCS activated.
Treasury Minister Allan Bell MHK told Tynwald this week that £85m had already been paid out to depositors under the government’s early payments scheme with advance payments of up to £10,000 per depositor.
The current depositors compensation scheme is subject to a ‘sunset clause’ which means that its provisions are due to expire on October 23 this year.
Bell has assured that the level of compensation for individual depositors will be maintained at £50,000, at least, in the new amended scheme that will replace the existing legislation. He has stated that if the new scheme is not in place for October 23 the current arrangements will be extended.