• Anonymous
  • unspecified
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Posted: Fri, 31/07/2009 - 15:11

Don't know how to scan the letter in so will type it out:

Dear Mr & Mrs XXX
Thank you for your letter of 14 July 2009

Your enquiry

You held an account with Derbyshire Building Society (Isle of Man) which sold its business to KSFIOM. Because this firm is now in liquidation, you have concerns about when and how much money you will receive. You believe that if your money was still with the Derbyshire, then your compensation would be handled the same way as Bradford & Bingley. Therefore, you have asked the FSA, as the financial regulator, to take action on this matter.

Offshore accounts and the IOM

Firstly, I would like to thank you for preparing and sending us your concerns. It is clear why this situation must be frustrating and upsetting for you. However, I regret that we are unable to assist you in this matter. I have explained our reasons for this below.

The IOM is an offshore territory and is not part of either the UK or the European Economic Area. It is autonomous with regard to financial services and has its own regulator - the Isle of Man Financial Services Commission and makes its own decisions with regard to compensation arrangements. Therefore, you may wish to direct your concerns to the FSC at the following: The Financial Services Commisssion, PO Box 58, Bucks Road, Douglas, IOM, IM99 1DT

I can confirm that as the FSA does not have jurisdiction over Derbyshire Building Society's offshore accounts, we did not have any objection to the sale of the business. As regulatory responsibility falls to the FSC, you may wish to contact it directly to raise your concerns with it.

I appreciate that this is not the answer you was (sic) looking for but hope my explanation is helpful.

Your sincerely,
S Dhunday (Mrs)
Customer Contact Centre
Financil services Authority

I still cannot understand how both the FSA and Derbyshire UK can wash their hands over this. Derbyshire UK guaranteed the deposits of those who placed their money in Derbyshire Offshore. Derbyshire in UK must therefore have been involved in the wording in the brochure sent out to depositors. It follows that Derbyshire Offshore could NOT have sold out to KSFIOM without the approval of Derbyshire UK. I think there is a coverup here and I hope DST and the junior consul are looking into this.

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The DAG-ST have asked Edwin

  • nivit
  • 19/10/08 31/05/09
  • a depositor
  • Offline
  • Sat, 01/08/2009 - 12:46

The DAG-ST have asked Edwin Coe to obtain counsel's advice on this matter and there will be an update shortly.

Derbyshire's culpability

  • Valentine
  • 18/10/08 31/05/14
  • a depositor
  • Offline
  • Sat, 01/08/2009 - 03:19

At the time I was first notified of the takeover, I received a letter from Derbyshire enclosed with the brochure from Kaupthing. This letter was signed by both Fiona Passey, a Derbyshire director and by Aiden Docherty.

Among other things this letter stated:

"the reference to the Derbyshire Building Society having given an irrevocable and binding undertaking to ensure that, while Derbyshire Offshore remains its subsidiary , it will at all times be able to discharage its financial obligations as they fall due will no longer apply but will be replaced by reference to Kaupthing Bank hf having given an irrevocable and binding undertaking to ensure that, while Kaupthing Singer and Friedlander (Isle of Man) Limited remains its subsidiary, it will at all times be able to discharge its financial obligations as they fall due."

This to my mind not only makes Derbyshire culpable for and partly resposible for this whole mess but also makes them complicit in the distribution of that brochure which I believe was deliberately designed to mislead Derbyshire customers about Kaupthing.

Playing devils advocate, it

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
  • Offline
  • Sat, 01/08/2009 - 09:09

Playing devils advocate, it is entirely possible (probable even) that Kaupthing h.f. had agreed to the transfer of assets from Reykjavik to London and that arrangements were in place for London to fund KSFIoM as necessary to cover its debts as they fell due. Given that HMG conspired to retain all Icelandic assets by using a power within the Anti Terrorism Crime and Security Act 2001 and by such shocking tactics inspired and instigated a run on Icelandic banks thereby providing grounds for the FSA to place Kaupthing and Heritable banks under adminstration. Under such extenuating circumstances, Kaupthing h.f. were quite literally unable to instruct London to perform this obligation. The money was available (it still is, but will now be shared so as to include UK creditors instead of its former sole intended purpose of being returned to the IoM) and Kaupthing could therefore claim quite reasonably that London would have funded KSFIoM had Darling, Turner and Bach not conspired to enact this jingoistic plan to bring Iceland to its knees.

This view rather negates many of the arguments made against the Derbyshire BS and even counters the remarks made by Mr Shearer. We were either depositors in a well-funded bank with top ratings and adequate liquidity, or we were misguided fools who left our money in a bank run by managers unfit for purpose and dumped into this unfortunate situation by misleading information handed out by the Derbyshire. Which is it to be? Do we say that Kaupthing had the money and would have funded KSFIoM had Darling not concocted and enacted his evil plan, or do we believe we were led up the garden path by the Derbyshire and Kaupthing conspiring their own plan to retain former Derbyshire customers in a dodgy deal? As the saying goes: you cannot have your cake and eat it - which as a group we have a tendency towards.

Active DAG membership will reduce - leaving far fewer of us - but those of us left (~700) will still be owed the greatest sum of money. The IoMG will try and make hay from this situation claiming that the vast majority of creditors have been recompensed 100%. We need to actively counter this claim with the fact that the remaining ~25% of former depositors held some ~70% of the total assets - and want it back. Two thousand eight hundred creditors will receive just 14.5% of their total asset with the first dividend pay out, anyone with £350,000 at stake will receive just ~£50K and this drip feed will continue for years ahead whilst E&Y take £700 per hour per administrator from the UK asset and P&W take £500 per hour per administrator from the IoM asset. DST will need to publicise counter-claims to every angle of IoMG spin.

My own view is that no bank can sustain a prolonged run on its liquidity, and Darling and Co knew that only too well. Iceland had approached the UK and Holland for assistance some months before this blew up and were shown the door. This prompted HMT/FSA to monitor the goings on in the Icelandic financial world and plan containment action if the worst happened. The arrangement with the Dutch bank ING would likely have been considered at this stage - ready to be enacted as and when the flag went up. This was prompted by Darling's call to Arni Mathiesen on Oct 7th 2008. Darling 'lead' the conversation and thereby got the 'understanding' out of it that he wanted - enough to start the ball rolling and bring the Anti Terrorism Act into play.

When the UK Chancellor and it's Prime Minister start publicly denouncing a country's financial ability you can be sure that people listen - and act. Whether the run on Kaupthing UK was significant is debatable (given that it went under adminstration within ~2 hours of IceSave assets being frozen) but in the fiscal fog it didn't really matter, the bank was put into administration and a comprehensive Transfer Order was magicked out of thin air to control the movement of assets from KSF UK. However, 170,000 Edge deposits were moved to ING at a cost of £2.6 billion on Darling's orders. The TSC may claim that the control of strategic events is 'muddy', but I disagree, strategic events are lead by strategy makers, not middle management. The men at the top were Darling, Turner, Bach and possibly Straw - all overseen by Brown. If the retention of IoMG assets was an unforseen and unintended consequence of the UK's preventative action, then Darling could readily have amended the Transfer Order to allow the return of those sums not involved in the UK jurisdiction's activities, but he chose not to. To my mind this single decision by Darling to refuse to return the asset implicates his intention to gain and hold those monies from inception. The transfer of KSFIoM assets from Reykjavik to London was likely inspired by the FSA (as stated in the IoMG's written evidence) and the intention was to appropriate this money from the outset.

From the foregoing I believe that KSF UK was a going concern brought down deliberately by HMT; independent sources have claimed that the bank had some £1.3 billion in surplus assets after all creditors have been accounted for. These are 'book' figures of course, but would have stayed book figures had it not been for HMG's intervention. Administering any bank causes a dramatic drop in asset values and KSF UK would be no different - especially given the current economic climate. For these reasons I believe that pursuing the Derbyshire angle could be counter-productive; that it lends credence to Darling's actions and supports HMG's action in bringing our Northern neighbour to economic debilitation. I actually subscribe to the notion that this was Brown's attempt at a "Falklands moment" - the UK has much experience in dabbing down small islands...

It looks like there will some seven hundred DAG members left with money owing; the army gets smaller but the force needn't diminish. Commando units achieve fantastic goals with small dedicated units and it would likley serve our purpose if we dedicated ourselves to one target and focused our full attention on the one rather than on the many. We need to determine which one will be the most likely to succumb to our efforts.


  • Anonymous
  • Offline
  • Sat, 01/08/2009 - 11:42

Icecrusher, in (another) of your (brilliant) exposures of facts it is obvious you know a lot more about all the possible intricacies than I do. Even so, a lot of what you have just written (in the first part) is, as you yourself say, conjecture and the picture you therefore build up, might not be accurate. (There has to be a public enquiry which hopefully will expose ALL the facts). Even so, the argument you present regarding the shennanigans and evil intentions at HMT et al does not, to my mind, negate the Derbyshire issue. I see the two as unrelated. My premise (in my earlier posting) is simply that the Derbyshire (UK) had a hand in our demise and a concommitant of that is that so did the FSA because it was Derbyshire UK that sold their subsidiary in IOM(they admit that in their brochure) to KSFIOM and the FSA must have been involved. We may have been a well-funded bank and we may also have been run by fools. Both together. That is probably the case. What I was trying to pursue was the deceit and lies that Derbyshire UK presented to us. That misrepresentation CAN be proved and we may get something out of that and that is why I wish to go for the jugular, Derbyshire's jugular. We were always pawns in this game, collateral damage if you wish. Many (some more than others) have had a hand in this plague upon us and because of that our strategy (and mission) would be best served were we to pursue all targets, not just one, as you advocate. The most likely to succumb to our efforts? That might never happen, but an agreement might be brokered somehow where ALL of them share the finacial burden and recompense us.

I don't disagree with your

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Sat, 01/08/2009 - 12:17

I don't disagree with your sentiment in any way, and it is true that we have been 'shafted' by all and sundry in this shameful exercise of stuffing your fellow man. I have yet to see a flying pig though, depite the plague of swine flu. The notion of an outbreak of communal altruistic magnamanity from this disparate gang of takers is not foremost in my cynical mind. It occurs to me that it may prove difficult to level accusations of misrepresentation at the Derbyshire whilst simulataneously claiming that we were depositors in a well run, liquid, and highly rated bank. Unlike some, my desire to see our money returned exceeds my desire to be 'right' and I would rather be wrong and win, than be right and lose. An unchallenged lie can quickly assume the truth; let's remember that can work for us too, and we need everything working for us to win when dealing with the callous cads of the Crown.

Derbyshire complicity

  • Anonymous
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  • Sat, 01/08/2009 - 07:10

Totally agree! We have been misled and misinformed by Derbyshire, KSFIOM, FSC but also by the FSA, and I would like to focus on this for a moment. Why? Well, in the brochure that KSFIOM sent out there is a 'Question and Answer' page at the back. One of the questions is "Why did Derbyshire Building Society decide to sell its offshore business." This CONFIRMS that Derbyshire in the UK was IRREVOCABLY involved in the selling of Derbyshire, does it not? It is not a question of Derbyshire Offshore selling itself but of Derbyshire UK selling its Offshore subsidiary. And if that is the case then the FSA, as the overseer of such transactions, must not only have been involved but ultimately have given the go-ahead to the sale of our savings to another bank which it knew was floundering. That makes them 100% implicated, does it not, or am I missing something? I understand DST have legal minds working on this. Surely this simple question in that brochure clearly shows that the FSA are NOT teliing the truth when they say in their letter to me that " I can confirm that as the FSA does not have jurisdiction over Derbyshire's Building Society's offshore accounts, we did not have any objection to the sale of the business." Can DST please confirm to me that this very important point is being acted upon by our legal representation. Thank you.