hanging by the word 'chose'

  • Anonymous
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Posted: Mon, 03/11/2008 - 18:55

Did I hear correctly? When Alistair Darling was asked why the 60% assets were requested to be transferred to the UK, he replied that KSFIOM 'CHOSE' to put them there!

Has that question, can it or will it now be put to the CEO of KSFIOM?

I emailed the Treasury for further elaboration of the word 'chose' in this context, but this now deflects responsibility fr the pivotal away from HMG.

How can this question now be put to KSFIOM's former CEO?

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hanging by the word " chose" / regulators position

  • Anonymous
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  • Tue, 04/11/2008 - 08:05

there seems to be some confusion with regard to the FSA / FSC about the transfer of the funds to KSF IOM. i have a fair amount of experience of offshore regulatory matters and would suggest the following :-

the FSA cannot demand that funds are transferred to the UK from another jurisdiction. If the UK bank needed further capital support then that sjopuld have been requested by the UK board from their parent company in Iceland.

furthermore, the FSC would not have forced the KSFIOM board to transfer the funds to the UK branch. In fact it should have been quite the opposite !!

HOWEVER, it is the BOARD of DIRECTORS of KSFIOM who ultimately made the decision to transfer the funds to KSF UK. BUT as this was such a large amount that breaches ALL COUNTER-PARTY exposures the Board would have to have been granted a special dispensation by the FSC in IOM to allow them to transfer the funds to the UK.

firstly, the Board of KSF IOM have a DUTY of CARE to their depositors ( that is some joke ! )and in this regard must ensure that they allocate their funds across various institutions ( hence the counter-party exposure limits ) so as to protect their depositors.

my opinion is that the BOARD of KSFIOM bowed to pressure from the UK / Iceland and agreed to send the funds to the UK thereby BREACHING THEIR DUTY OF CARE TO THE DEPOSITORS.

Furthermore, the FSC in IOM ALLOWED this to happen by giving their permission... ( specificallly allowing them to breach the counter-party exposure limits). this in my opinion, with the FSC knowing the various financial crisis that were occurring was negligent / reckless; bowing to the pressure from the KSFIOM board rather than acting as a proper " regulator" and protecting the interests of the depositors.

the next step will be to understand the actual communications between the Board and the FSC ... but i regard all the members of both parties as negligent. i believe that all members of the board can be held personally negligent and thus, if we do not get 100 % of our money back from UK / IOM government, then each of these board members can expect a law suit against them individually and collectively. there will of course be D&O insurance cover for the KSF IOM board and the FSC but we will blow through that.

not much consolation, but they will be as broke as we are by the time we have finished with them.

i wrote an email some two weeks ago " FSC and IOM government feeling uncomfortable ? " - nothing much has changed other than the lawsuits against them are getting closer.

role of FSC in transfer of KSFIOM funds to KSFUK

  • Anonymous
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  • Tue, 04/11/2008 - 09:20

I sent e-mails to FSC on 22 and 23 Oct about this
I received replies from Andrew Kermode on both occasions
see below

22 Oct
iainb to FSC (John Aspden)

I have read that KSFIOM had placed a very substantial part of its assets with the UK branch of KSF
I have also read that its difficulties are in a large part due to the UK “freezing” these assets
Is it normal for an IOM bank to transfer such large sums of depositors cash to a different country?
It would seem quite a risky thing to do unless cast iron guarantees were in place..and as we know sometimes these “guarantees” are not what they seem
Are there any controls over this?
Your views would be appreciated


The Commission has rules and guidance for large exposures, including those for inter-bank and inter-group. These rules are consistent with other similar jurisdictions and international standards.
Andrew Kermode
Senior Manager - Supervision

23 Oct
iainb to FSC (Michael Weldon)

On another point….I have read that approx GBP500m was sent from KSFIOM to KSFUK
If true, why would that have been done? Is it normal for banks to send such huge sums to other independent banks in separate countries?
What guarantees would be in place?
Did the FSC know about it? Can it be returned? If it were returned could KSFIOM resume trading?

For banking groups it is not unusual for assets to be placed with other credit institutions in the group in accordance with regulations and guidance. KSFIOM is not alone in this. The matter of the return of the funds fro the UK to KSFIOM is for the “liquidator provisionally” to address.

Andrew Kermode
Senior Manager - Supervision

You mean Aiden Doherty?

  • Anonymous
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  • Mon, 03/11/2008 - 19:04

How indeed?
Where is Mr Doherty?

Aiden Doherty's choice?

  • Anonymous
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  • Mon, 03/11/2008 - 19:21

If the following link is correct, then maybe Alan Bell would be able to pursue the question of the 'choice':

The Association of Licensed Banks

is an IoM association...

Amongst its most senior members...

it boasts one Aidan Doherty of Singer and Friedlander (IOM) Limited as its Deputy President.http://www.alb.org.im

Responsability of Descision.and or choice.

  • Anonymous
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  • Mon, 03/11/2008 - 23:21

As commented yesterday,and following todays confirmation from the Treasury Select Committee enquiry,that HMG are completely blameless, in causing we depositors to be denied access to our monies ,and that they only acted in good faith,in protecting UK residents monies,didnt really tell us any more than what we already knew,with one exception,that of a categorical denial,that the FSA did NOT tell or instruct the IOM-FSC,to transfer KSF-IOM assetts, to KSF-UK.Clearly as commented yesterday,institutions do not simply just do that,We know need clear ,catergorical,stand alone statements from the IOM-FSC,and the M.D.-KSF-IOM,to concur,or contest the UK-FSA,and the chancellors denial statement.I also beleive we should expedite the same statements from the authorities in Guernsey,and Jersey.Should the three islands choose not to make public those statements,then they will have ultimatly commenced construction of their financial coffins, and their proportionate livelyhoods.It was also mentioned at the close of the enquiry,by the chairman,that there would be a follow up to the questions raised today,at the next meeting.I would respectfully request our team leaders in IOM,to progress this action,thro a written request,and or affadavit on these institutions a.s.a.p.

Treasury Select Committee

  • Anonymous
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  • Tue, 04/11/2008 - 08:22

I thought that we may have had a good day yesterday. The IOM Team posted the minutes of their meeting with IOM Treasury Minister and that looked quite positive. Oh dear good old Alastair Darling brought us down to earth with a thump!

All of which makes me think. How many winners have resulted from the Icelandic Banking crisis. The answer is simple - one - Gordon Brown and no one else. Move back prior to the Landbanski issue and we had the stock market in free fall - Labour MP's had young Milliband lined up for Brown's job once they could find a way of getting rid of him and Labour were miles behind the Tories in all Polls. Brown had a problem with image and on and on the problems went.

Out of nowhere came Brown's big speach whereby he was prepared to throw billions at the UK banks to keep them afloat if need be. He stressed the importance to the UK of seeing out the current banking crisis. Just for good measure the Treasury (the same day) closed down KSF (UK) Ltd on the basis that it was in default of FSC Regulations. Wow what a transformation - our PM became an overnight hero.

I thought at first that they had simply overlooked the IOM bank. i.e they had not thought that far ahead. I've changed my mind after listening to last night's debacle. I think the bold gang knew exactly what would happen. I think they knew that liquidation of KSF(IOM) Ltd was a direct and inevitable consequence of their actions. The good news for them was - it's not their problem and secondly they can use the fact that IOM is an offshore banking centre to their advantage. When the fat hits the fire their get out of jail card is to talk about shutting down offshore banking centres and have their collegues referring to offshore banking being used by drugs dealers and money launderers. What a wonderful bit of PR work ! Suddenly we are the bad guys as we're all tarnished with the same brush. All of a sudden the public sympathy is with Darling.

What I've realised is that we are swimming in a pond full of political sharks who are quite happy to use us for their own political gain. I fear that we need to go on the offensive pretty quickly otherwise Brown & Darling will end up getting away with it. When I say getting away with it I also fear that means getting away with our money. We could end up with less than Landbanski Guernsey.

I fear that they will need to keep the hard man act up for a little longer so prepare for further insults coming the Isle of Man's way. 6th November is the Glenrothes By Election. That's the constituency next door to Brown's and the word on the street suggests an SNP gain. It's probaby best if Gordon continues to sort Iceland and these tax havens out. Why get bogged down with an election defeat when there may be further battles to be won on the banking front. With due respect he's up against Iceland and the Isle of Man. Hardly world super power's !!!

Mrs Not To Happy, may I say

  • Anonymous
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  • Tue, 04/11/2008 - 08:47

Mrs Not To Happy, may I say you seem to think like me and one or two others! Yes the Brown political bounce is the only winner, we are pawns in a greater geo-political game, but in the end there are lots of little chinks of light and that is what you follow. What goes on in public, the good news threads from Downing St, wrist smacking Ross and Brand, (how very popularist), congratulating Lewis hamilton (how popularist) are all the little signals you need to tell you they want to bury our news and at the last say, hey we had to sort out those ghastly Icelanders for the greater good! By the way I am 50/50 on whether they new KSF would go, sometimes I wonder if we give them to much credit. However in my years overseas I do know that the Brits have a reputaion for ruthlessness, and as I have said before are you really sure they did not have cause to act?
From the beginning there has been a scene behind the news and that is where we are heading for a resolution. It is now and always has been about playing our lines through those little chinks, one of the reasons I am opposed to any litigation, aside from perhaps being prepared for the 27th, is that it does us no good at all, it delays a solution.
These are of course only my views, each to their own!

expat - good and bad I guess

  • Anonymous
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  • Tue, 04/11/2008 - 09:11

I agree, there was an orchestrated smoke screen with that 'offshore' nonsense. An claiming its all about offshore money being hidden away will get votes; but there was a sign that there could be a difficult but possible way forward so I don't think the door has been closed.

I agree that getting prepared for the 27th is key, but if there is going to be substation representation this would need to have a start now (i.e. I am representing xxx depositors with £xx,xxx,xxx of deposits) so that the instructions can be put together.

I think, as you that its way too premature for a nuclear litigation option, but I think that bond holders incorrectly advised by their IFAs are an exception to this rule. If the worst happens and a DCS default is called then I think that this class of depositer stands to lose the most, but paradoxically they may have recourse to their IFA and their PII scheme if inappropriate advice has been given.

Do you think their would be any mileage in this group teaming up with other UK res affected people (i.e. the charities; and the other institutional counterparties) The CoE made the point that it was a offshore bank that was nothing to do with him that was affected but if the matter of Uk charities losing out and other UK instiutions was raised maybe he might be more willing to seek that difficult solution...

manx-person good morning, as

  • Anonymous
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  • Tue, 04/11/2008 - 09:30

manx-person good morning, as I understand it there will be a lot of very big institutions with their legal teams ready to fight the liquidation on the 27th, it may well be that statements from iom that may even change things. Last time i was aware of many legal teams not havimg to speak, but were there and ready if needed anfd that included IoM Trerasury. I leave it to better judges as to what to do, as one member knows I am not in favour of wasteing peoples time and money when we need to get our money and others can fight the court bit. But thats just my opinion.

expat - good morning also ;-)

  • Anonymous
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  • Tue, 04/11/2008 - 09:35

I agreee; the best result would be the return to solvency prior to the 27th, or perhaps a 3rd novel funding solution that may be found prior to this date.

I don't know what you mean about the Treasury not having to speak, they did and they were the main proponents of the adjournment.

I too am aware of other Institutional representation, but as to whether they will fight, we shall have to wait and see what happens.

Sorry yes I was thinking

  • Anonymous
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  • Tue, 04/11/2008 - 09:38

Sorry yes I was thinking about another outfit! Will they fight? They have large bionds in this man!! They really don't need a winding up! Maybe chat it over, I am open to suggestions on this, but I don't want aready broke people forking out more if we can avoid it. I mean the only winners are the lawyers aren't they!!

further to the question of 'choice'

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  • Tue, 04/11/2008 - 03:45

I agree with jamjar (quoted from his comment above):

'We know need clear ,catergorical,stand alone statements from the IOM-FSC,and the M.D.-KSF-IOM,to concur,or contest the UK-FSA,and the chancellors denial statement.... It was also mentioned at the close of the enquiry, by the chairman,that there would be a follow up to the questions raised today,at the next meeting.I would respectfully request our team leaders in IOM,to progress this action,thro a written request,and or affadavit on these institutions a.s.a.p.'

Added to this, could the IOM team perhaps ask Alan Bell to start to enquire for us to what extent it was simply a 'choice' of KSFIOM bosses to transfer the assets to KSF UK. (Aren't there connections between the IOM Treasury and Aiden Doherty, KSFIOM's former boss?)

Darling's inane terminology does suggest a cover-up, but trying to expose this is now, as I see it, the only way forward with the issue of culpability of the British Government.

Guys the FSC is independant

  • Anonymous
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  • Tue, 04/11/2008 - 08:51

Guys the FSC is independant from Alan Bells jurisdiction, they do not need and probably do not tell him anything. The witch hunt on that will come later, for now I concentrate on getting our money the quickest way I can see. Cover up? Maye, maybe. Incompetance Maybe? A number of small at the time choices that look major now? Maybe? There are a lot of ways to look at this and believe me I havespent a lot of time lookng. But get the moeny fisrt in my view.
Ohh so yes I have asked the question.

As it happens a very

  • Anonymous
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  • Tue, 04/11/2008 - 09:06

As it happens a very searching set of questions was handed over to Alan on thw eekend, we do not need afidavits unless you want to dealy getting your money!

further to the question of 'choice'

  • Anonymous
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  • Tue, 04/11/2008 - 06:15

completely agree - this is the crux of how/why the gbp 550m ended up with KSF UK and is crucial to our strategy.

'formal' questions to the the FSC and KSF IOM sent on bahalf of the ksfiomdepositors group from the central teams would be better than everyone firing offindividual emails (as i was about to try and do)...