Derbyshire partly accountable?
Am I understanding this correctly: The Derbyshire was fully aware that Kaupthing was having problems, but they still transferred accounts? If this is the case, then surely the Derbyshire should be held accountable as well and the decent thing for them to do would be to make amends and give some of their profits away to those who are going to loose out, i.e., me.
Mike Steel
(2 votes)
Derbyshire
Before I lost a shed load of money with the outfit foisted onto us by the Derbyshire, the Treasury Select Committee was never on my radar, but boy, isn't it powerful.? After the gobsmacking revelations made this week about Kaupthing by Tony Shearer, we need the people from the Derbyshire who did the due diligence and made that fateful decision to dump us, to sit squirming in their seats whilst facing the questions which, for justices's sake, now have to be asked. I would pay to be there to see that!
Derbyshire
Agreed we have been badly let down by the Derbyshire, as we now know, it was widely known in banking circles that Iceland was heading for trouble. It was known by the Derbyshire, the IOM, the FSA, the FSC, Singer & Friedlander, and yet it was "sold" to us on the understanding that, we could have peace of mind, that we had the protection afforded by the DCS and 100% parental guarantee from Kaupthing hf. In addition to which it had very high credit ratings and was under the jurisdiction of the, "Best International Financial Centre" ie IOM. Yet here we are and even the TSC admit they are being "stonewalled" and receiving no response to their questions. Maybe we should ask them the direct question - how do we get the answers we need to help resolve this ?
I agree.
Now I am aware of other banker's thoughts on Kaupthing I have no doubt that we have been let down by the Derbyshire. If they are professional people they must have been aware of the risks that others in their profession were seeing (this also goes for the FSA and FSC). They gave no thought to the depositors at all so long as they could get a good deal for themselves and offload their IOM concern to return to their core business. This must be pursued.
How to pursu???
I totally agree with your post. My question is how we pursue and state our case clearly. Any ideas?
derbyshire
guys - we need to persue this for 2 reasons....
1) to nail the DBS for what was quite clearly a 'sell out' literally to KSF - they must have known that things were dodgy...and if they claim they didn't, then they were not fit to be making million pound banking decisions
2) if we can get the derbyshire to take responsibility for its ex-depositors, then there should be more money in the KSF debacle to eventually pay out those savers.
i have a foot in both camps.....derbyshire and singer/friedlander
who is our derbyshire group leader and what is our plan of action....
Derbyshire - Group Leader
hi worried jules .... just checked on the group lists and "nivit" is the group leader leader listed there. We have to rally the troops and get this rolling. We have the facts and information to present to what was the Derbyshire which is now I believe Nationwide. Strike while the iron is hot!
I have tried to motivate this
I have tried to motivate this group several times to no avail. As far as the London team is concerned we are peripheral to their main action (this is not a criticism of the them but rather of us for not getting off our butts). this was plainly demonstrated by the last minute appeal for Derbyshire info less than 24 hours before Diver appeared before the TSC. After to-days events we have time to organise but to do so we must be willing to be in personal contact to set up our team, anybody who is interested by this idea please email me with a land line number and I will contact you.
Nivit - Derbyshire
Nivit,
I've emailed you offering to help with getting some more energy into the group pursuing The Derbyshire/Nationwide. Please get back to me.
IceCrusher letters to/from Nationwide
IceCrusher has posted letters and emails sent to Nationwide and the replies from Nationwide,
they make interesting reading.
(this is the link to "BBC radio interview derbyshire building society depositor" thread)
http://chat.ksfiomdepositors.org/forum-topic/bbc-radio-interview-derbysh...
Derbyshire Offshore
Responding to Mike Steel
Derbyshire Offshore and the IoM FSC must have known that the Icelandic banks were in trouble because the Daily Telegraph reported in March 2006 that there were indications that Iceland was heading for a meltdown due to unsustained borrowing and soaring indebtedness. As a result Fitch downgraded Iceland's rating from stable to negative.
This took place almost two years before Derbyshire Offshore transferred its depositors assets to KSF IoM. In March and April 2008 Iceland asked the UK for financial help, but was turned down by both Gordon Brown and the Governor of the Bank of England. Since the Cheshire Building Society in Guernsey was taken over by Iceland's Landsbanki I suspect the offers made by the two Icelandic banks to Derbyshire Offshore and Cheshire Guernsey may have been too lucrative to turn down. As I see it we were thrown to the wolves by the Derbyshire Building Society.
Reply from Derbyshire
The letter was photographed by a friend and emailed to me. Some is illegible:
Dear Dr ....
Thankyou for your letter of Nov 9 to Alan Wood who has asked that I reply...
Let me start by saying how saddened I am that you have been caught up in the problems affecting the Icelandic banks. Everyone has been surprised by the well publicised events in Iceland and the difficulties being caused to many UK depositors. Patently (?) it was not possible to predict how events were to unfold.
Derbyshire BS made a considered decision in good faith to sell Derbyshire Offshore to Kaupthing. Kaupthing Bank hf was a regulated institution with a strong independent credit rating, stronger than that enjoyed by the Derbyshire.
The transaction at the time benefited customers in view of the guarantee being offered by Kaupthing Bank hf, its long term commitment to the business and the fact that it had agreed to make the changes to account terms and conditions. This ... transaction was approved by the regulators in the IOM and Iceland.
On completion of the transaction, the parental guarantee previously provided to Derbyshire offshore customers by DBS was replaced by a guarantee from Kaupthing Bank hf. The FSC in the IOM confirmed that, from its perspective, it considered the Derbsyhire's guarantee to be 'discharged and terminated' following completion of the sale.
Clearly, any difficulty caused by the current status of the Icelandic banks is deeply regrettable. The latest position, as I understand it, is that KSF IOM Ltd has applied for the company to be wound up and a provisional liquidator has been appointed. The hearing of that petition, however, has been adjourned to 27 Nov. If you have not already done so, I would strongly recommend that you contact him to register your interest and obtain more detailed information, ... Michael Simpson of PW.. address.
I believe that there is up to date information available on the Commission's website....including statements from both the Icelandic and British Govts about Kaupthing Bank hf's ability to honour its guarantee. There are also details of the Depositors Compensation Scheme on the website if an event of default is declared.
It is not yet possible to know for certain how Kaupthing's difficulties will ultimately affect you. That said, we have been in touch with the relevant authorities, whom we know to be actively engaged, and will continue with these lines of communication.
Yours sincerely, Graham Picken, Chief Executive
FSC high standards at work again!
The IOM FSC would have needed to approve this transaction - clearly given all of the media about the Icelandic Banks their approval is at best unwise and more likely a dereliction of their regulatory role - I am not a lawyer so maybe someone else might comment about the FSC role in this particular transfer of business to KSF from Derbyshire. As stated above "The FSC in the IOM confirmed that, from its perspective, it considered the Derbsyhire's guarantee to be 'discharged and terminated' following completion of the sale".
For the record I am not ex Derbyshire so have nothing to gain from this particular strand - I am ex Singer and Friedlander.
Everywhere we look we see the FSC failings (among many other guilty parties).
Fixed rate bond - me too
My position is identical to deevee. I have attempted to inform Nationwide directors of the situation.
Derbyshire partly accountable?
Couldn't agree more. Derbyshire sold us down the river and proudly state in their 2007 Annual Report about how they made GBP7m from the sale to KPHIoM.
Derbyshire's accountability (and the FSC)
I was a customer of Derbyshire, with a one-year bond due to mature in 2009. I believe they are culpable, given the widespread news (in the financial world), of Kaupthing's situation. But the Isle of Man FSC sanctioned it, therefore adding credibility to Kaupthing. They could have insisted that clients were allowed to withdraw their deposits, as part of the agreement with Kaupthing, if they did not wish to have them transferred. But they chose not too. They had the opportunity to protect depositors and act on their behalf.
Good heavens, one only has to read reports on Icelandic banking dating back one and two years, showing Kaupthing's precarious position. It is a crazy situation that many of us are in - we have various examples of culpability from all angles; the Icelandic banking system; Derbyshire; our IFAs in some cases; the FSC; the British Government.
All these entities with a "hand" in what happened to us, and yet our deposits are still not forthcoming.
Your one year Bond
Did you know you were effectively opening an account with Kaupthing or did the Derbyshire fail to mention that?
No, "Kaupthing is a North European Bank"
The answer to that is no. When the mention of the name Kaupthing started to appear, I genuinely thought it was entirely a Derbyshire Building Society name change. My IFA set up the account for me. Then when the account was up and running I looked at the web site and it said...
"Kaupthing is a North European Bank, operating in all the nordic countries".
So that just made me think it was a European bank. I therefore didn't bother any further about where it was in Europe, because I felt it had European credibility.
But it wasn't European!
kaupthing is a northern european bank
Quite. When I first read that glossy brochure I too thought that it was a European bank, in fact the name sounded German to me. The word Iceland appears buried in the middle of all the 14 countries Kaupthing operated in, mentioned after the Faroe Islands for goodness sake!. I wonder if any of the Derbyshire hierarchy kept any of their personal savings in Kaupthing after the takeover. That would be an interesting one to find out. Seriously though, I feel the facts were not properly disclosed to us at the sensitive time around October, November 2007 and that has been the core of my complaint. I am still awaiting replies from all the relevant bodies
Derbyshire
The takeover of Derbyshire accounts by KSF was sanctioned by the FSC. The
FSC accepted the Kaupthing guarantee - without security. The FSC's issuing
of a licence and allowing the transfer of accounts said clearly to me that
the FSC, whose mission is to protect depositors, endorsed KSF. Why move
your money when the FCS is backing a new bank?
Is the FSC not culpable for their decision given that there was evidence that
KSF may have future problems and the KSF ratings started to fall in early
2008? Most of all it was they that accepted the unsecured parental guarantee
on our behalf.
Derbyshire
Hang on. To be fair to the Derbyshire, they sold out to KSF, yes, but that was nearly a year ago. If you, I or anyone else was really worried that much about KSF, we've had plenty of time to pull our money out.
Probably like quite a few, I felt quite reassured by the "parental guarantee," and besides up until recently, who ever heard of a bank going bust? Shares go up and down, so do property prices, but a bank, surely, was about as "safe" an investment you could make...
Or such was the conventional logic up until about a week ago. Yes, I should have tracked the situation closer, and discovered that the whole Iceland thing was a huge bubble. My fault. But when the whole Iceland thing started to blow up at the end of Sept, the press was still saying that KSF was "OK" so no need to worry. The speed and ferocity of the economic crisis has shellshocked everyone and let's hope and pray we all come out of this in one piece with 100% of our money back. Fingers and everything else crossed....
What are regulators for?
I have the rather naieve view that this is to a substantial degree the task of the regulator.
If I am not mistaken they are professionals in this field, being paid not badly for their work, having access to, and the right of access to the sort of information that when we ask for it we get a puzzled stare (wall of silence).
I may be wrong, but if so can you suggest what the regulator is tasked with?
As far as I can see, the two regulatory bodies, IoM and UK, were aware of and involved in discussions of how to handle the risk they saw in this situation, and the result is we're currently f**ked. Just how is this competent regulation?
We have the lifeguard on the beach and he didn't spot the tsunami.
I have a view that the simple overview is normally the most honest, and the most useful. I think that is why the IoMG is basically saying absolutely nothing. They are pleading the fifth amendment. And that is why their performance at the TSC was such a confusion. They wouldn't even have been talking if the 'more powerful than them' Justice TSC hadn't requested their presence.
The Insurance companies are playing the same game and putting as much pressure on the IoMG as their lawyers think is possible ( I can only assume), but they're not liable. It's your problem. It's the same with the lot of them.
It appears to be time to litigate.
Derbyshire
But.........How many people had Fixed Rate Bonds ?
".... emergency withdrawals may be allowed at our discretion."
Anyway ........ "All of our Manx Bonds offer: A guaranteed return"
Fixed term Bond
I'm trying to find out how many of us had fixed term investments with the Derbyshire that had not matured before the collapse of Kaupthing were you in that situation?
4 year Fixed Rate Bond with Derbyshire
Yes, I have my funds in the longest Manx bond offered by the Derbyshire...fixed rate over four years, as it is pension money and therefore, by definition, long term. Is there anyone else in this situation?.....I am trying to get the FSC to adjudicate on a policy decision that pension monies are indeed individual savings, and the compensation scheme should not penalise them just because deposits of this type have to be opened by Trustees, by law.
The loss of the ultimate UK parental guarantee by the Derbyshire BS when KSF took the accounts over should have been checked out by the FSC regulators, and at least depositors should have been advised, and allowed to withdraw their money if they wished.
Fixed Term Bond
Nivit, I have three, were due to mature end December, January and February. What's your purpose in trying to identfy how many folks had them?
Thanks.
Fixed term bond
The reason I am trying to collect this info is that I believe people who took out fixed term bonds believing they were with the Derbyshire and then found themselves unwilling depositors in KSF and unable to withdraw their money before term are in a unique moral and possibly legal situation. For that reason I want to find out how many of us there are with the view to coordinating our efforts. When you took out your bonds were you aware that the Derbyshire IoM was being purchased by KSF?
Fixed term bond
We deposited into a 1 year bond with Derby BS in early November 2007 which was due to mature at the end of November 2008 . Letters from both DBS and KSFIOM dated 20th November 2007 advised the sale agreement to KSF ; this was less than two weeks after the account was set up ! Obviously they knew of the sale transfer yet gave no prior warning or option to disengage before they had secured our monies .
Literature enclosed with the letter stated in the question and answers section ref Q11 ' If I wish to close my existing accounts as a result of the sale of Derbyshire Offshore , can I do so without giving notice and without penalty ? Answer NO '.
Derbyshire sold us on , sold us out and should answer with recompense for their actions . A barrage of complaints to DBS and their takeover suitors - is it Nationwide ? - may be enough to oblige them to seek a resolution . Nationwide will not want to inherit this mess .
Role of Derbyshire
Lostinspace -
Partly agree. Some of us, as we've seen from this site, were holding term products and didn't have the opportunity to transfer cash out. Others like me - naively in retrospect - assumed that the Derbyshire would not pass our precious assets on to anything other than a watertight company.
I think we-re being too English here. Aside from questional legal liability issues, there are moral & reputational issues here for the DBS and I for one want some answers but they are being very cagey. Emails and calls have gone unanswered. Please see DBS contact details halfway down under the Contacts threads.
Reponse from Derbyshire
Dear Ms Smith,
Thank you for your email.
I naturally regret that as a customer of our former subsidiary you have been caught up in the well publicised problems being experienced by Icelandic banks. We shall do all that we can to encourage the relevant authorities to find a solution.
Meanwhile, lest you may not know, further information is available from the Isle of Man’s Financial Supervision Commission’s website www.fsc.gov.im or by telephone +44(0)624 689300.
Graham Picken
Graham [dot] Picken(?)TheDerbyshire [dot] co [dot] uk
Derbyshire Building Society, Duffield Hall, Duffield, Derby DE56 1AG.
Authorised and regulated by the Financial Services Authority
Misfeasance -- DBS to Nationwide?
Fellow codgers may recall from earier discussions that DBS has transferred its depleted assets to Nationwide (also with an IoM branch) but we really need someone with knowledge of IoM law to ascertain (a) if there is a case for misfeasance or breach of contract as would probably occur within United Kingdom jurisdictions, and (b) on what grounds would an IoM ruling be upheld by the law courtsi n the United Kingdom. A local learned view would be illuminating. An interesting first step that would cost nothing would be for a UK resident and small depositor to start the ball rolling with a complaint to the UK Financial Services Authority (which is involved through its regulation of mortgages through Derbyshire Offshore) and another UK resident small depositor to launch a case in the small claims court against Nationwide. Watch the sparks fly if that takes off!