HMT will NOT repay KSF IOM's £532m deposit in KSF UK

  • Sheffield25
  • 17/10/08 31/05/09
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Posted: Mon, 16/02/2009 - 12:17

All,

Thought you'd all appreciate sight of this letter, which I recently received from my Euro MP, John Bowis, detailing the Financial Services Secretary's (Paul Myners MP) reply to him in regard of my lost savings in KSFIOM and the £532m deposit which KSFIOM are trying to re-claim from KSF UK.

In spite of the fact that the FSA suggested that KSF IOM transfer their cash to KSF UK, for safe keeping, Mr Myners clearly states that, HM Treasury have no intention of allowing the £532m which KSF IOM had on deposit with KSF UK to be repaid and thus, KSF IOM will have to stand in line along with the other creditors!

Essentially KSF IOM will only be repaid once HM Treasury & the FSCS have been repaid the £3.5bn which they are owed by KSF UK for guaranteeing private depositors!

Not completely unsurprising, given how much contempt the UK Govt have shown for KSF IOM depositors, but very upsetting all the same.

Sheffield25

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Surprise, surprise . . .

  • drglowry
  • 14/10/08 31/05/09
  • unspecified
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  • Tue, 17/02/2009 - 10:17

What thief gives the money back?


We have moved on aways since

  • IceCrusher
  • 14/10/08 25/10/11
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  • Mon, 16/02/2009 - 15:08

We have moved on aways since this was last discussed and no one believes we will get 'our' money back from KSFUK in its entirety, not in the short term and goodness knows how much it will be whittled down by over the long term. That is why the focus is now on getting IoMG to take a loan from the UK Treasury to take the place of KSFIoM as creditor with the UK bank.


Not entirley accurate. The

  • thesunnysouth
  • 10/10/08 31/05/09
  • unspecified
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  • Mon, 16/02/2009 - 13:54

Not entirley accurate. The FSCS (HMG) are not ahead of KSF IoM but rank alongside. They will get their money back at the same rate as we and other creditors will, not ahead of us.


HMG will get money back at same rate as we

  • margaretta
  • 22/11/08 31/05/09
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  • Mon, 16/02/2009 - 16:17

Are you sure this is entirley accurate? If the Kaupthing Edge depositors were in the same boat as us they would have got back 50k. As it is they got back 100%. Will HMG be claiming 50k per depositor or the full 100% they forked out? I know which option my money would be on if I had any.

The only upside I can see is that if the latter is the case then a claim against preferential treatment of UK depositors could not possibly fail in any British court.

The only potential problem might be that British courts are entirley independant of the HM Government and under no influence whatsoever from Gordon Brown and the fragrant Lady Mandelson in much the same way that the FSA and the BOE are independant and HMG's offical inflation figures reflect reality.

Let's face it, after the IOM's performance at the TSC we're screwed and neither HMG nor IOM could give a toss and no court in UK or IOM will make them. Neither will the TSC (being as it is entirley independant and not set up and chaired by HMG for the sole purpose of making lots of pointless noise and claiming enormous expenses).

Anyone an expert on the European courts, human rights etc? It's about the only light I can see at the end of this **** hole.


London Transport v KSFIOM

  • merlina
  • 26/01/09 01/06/09
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  • Tue, 17/02/2009 - 06:51

If London Transport are creditors of KSFUK and expect 100% return surely we are in the same boat and can expect the same return.
Perhaps yet another reason for refusing Tony Brown's SOA - signing away any future return.


Merlina, As far as I am aware

  • expatfrance1
  • 15/10/08 31/05/09
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  • Tue, 17/02/2009 - 07:26

Merlina,

As far as I am aware accepting the SoA does not waiver your right to future distributions from assets as they are realised.

Just another piece of misinformation that is making the choice between a DCS and SoA more difficult.


margaretta; yr. question

  • mikeinfrance
  • 12/10/08 28/09/09
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  • Mon, 16/02/2009 - 20:54

margaretta...perhaps this extract from "The Kaupthing Singer & Friedlander Limited Transfer of
Certain Rights and Liabilities Order 2008" answers your first question:

Liability of Kaupthing to the FSCS and the Treasury
16.—(1) Kaupthing is liable to the FSCS in respect of an amount equal to the amount which
would have been provable in the administration of Kaupthing in respect of the transferred
liabilities had this Order not been made and had Kaupthing been placed in administration
immediately before the effective time."

I take this to mean that the FSCS will claim up to £50K per depositor and the UK tax payer funds the rest, to give all KSF UK Edge depositors 100%.


HMT will NOT repay KSF IOM's £532m deposit in KSF UK

  • margaretta
  • 22/11/08 31/05/09
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  • Tue, 17/02/2009 - 11:55

Thanks. If things were as they should be then I'm sure you would be correct.

However we have just seen an entirely solvent (?) IOM bank brought down purposefully (no need for question mark) by a UK Government whose response was to instantly recompense depositors in it's apparently insolvent (?) UK sister bank and then refer to the IOM as a tax haven in the Irish Sea.

This done under the guise of anti terror legislation with the relevant papers sealed and following FSA suggestions (?) guidance (?) friendly advice (?) for the FSC to direct (?) voice the suggestion (?) that the solvent (?) IOM bank deposit the vast majority of it's cash in the UK sister bank with no strings attached. Whereupon the FSA purposefully (no need for question mark) prevent the FSC from being on the committee of creditors of the UK sister bank despite being one of it's biggest creditors.

If anyone believes anything from here on in is going to follow the rules then I can only imagine it's because they know who is writing the rules.

Personally I am hoping the Judge will be the one from the Menezes case. I could do with a laugh.


Brown has only done what maddoff did...

  • chipmunk
  • 13/10/08 31/05/09
  • unspecified
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  • Tue, 17/02/2009 - 12:32

Brown froze that money knowing exactly what he was doing and used it to pay off other depositors within the UK....exactly what Maddoff has done and he's going to Jail
Only difference was that maddoff kept the fraud up for years stealing from Peter to pay Paul...Brown is the major creditor with Kaupthing UK and will get that money back into his Coffers....We fell off the end !


HMT will not repay....

  • Anonymous
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  • Mon, 16/02/2009 - 13:42

Surely HM Treasury is an unsecured creditor of KSFUK, the same as KSFIOM?


Secured or unsecured or exceptional?

  • follow_the_tao
  • 11/10/08 31/05/09
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  • Mon, 16/02/2009 - 15:49

Unsecured is what I'd hope and what I'm on balance thinking. But I'm left with a nagging doubt. That is because of what the 3.5bn represents.

The 3.5bn was lent to KSFUK to enable virtually all the depositor liabilities to be moved to ING with a corresponding amount in cash. It thus represents first call liability, the depositors.
This isn't necessarily significant, it depends on the what comes out of the liquidation.

Isn't it interesting that ING has been having real problems. Would have been funny (not really) if it had gone bust.


change

  • bellyup
  • 10/10/08 09/01/10
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  • Mon, 16/02/2009 - 12:31

Now things are coming to light with the doings of the FSA things might change


ON reflection, I think it was

  • steveservaes
  • 13/10/08 31/05/09
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  • Mon, 16/02/2009 - 14:01

ON reflection, I think it was a bit of a shame people were talking about the money being sent to UK "for safekeeping" or similar. That has just confused the issue. Clearly everyone in IOM knew - or should have- that our money was being invested in KSFUK on the usual terms and if there is an administration we are unsecured creditors like everyone else. The only real issue to argue about has been this 6 month ING period.
I can see no basis whatsoever within the administration of KSFUK how we could be given our money back in priority to the other unsecured creditors. Whether UK FSA might have any liability remains to be seen. However at the end of the day it seems that KSFIOM took a very bad investment decision and we are paying for it. Has anyone asked Homer how much directors' error insurance KSFIOM have?


Directors Liability Insurance

  • Done like a Kipper
  • 10/10/08 n/a (free)
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  • Tue, 17/02/2009 - 05:30

I have already tackled the FSC on this issue and the answer I have in writing is that the KSFIOM Directors do not have any liability insurance as it was not an FSC stipulation when issuing the banking licence!


I am lost for

  • SgKZ
  • 10/10/08 31/05/09
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  • Tue, 17/02/2009 - 12:27

I am lost for words.........

Oh well, if Aiden Doherty sold his property recently, someone better start trying to track what he does with the proceeds as that might be the only money available to recompense people for the apparent wilful incompetence or negligence.


Liability Insurance

  • Tricky Dicky
  • 24/10/08 30/05/09
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  • Tue, 17/02/2009 - 08:03

Hi Done like a Kipper,
Can I suggest you send a copy of this letter, unless you already have done so, to the London Team, so that they can forward to Edwin & Coe, for legal advice, it may be important it may not


WWe seem to have forgotten about the IMF choke-off. And now....

  • follow_the_tao
  • 11/10/08 31/05/09
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  • Tue, 17/02/2009 - 03:43

might be the time to examine it in more detail.

Remember that we were expecting HMG to represent the IoM in, in the same spirit as it was representing itself, in putting conditions on the IMF bailout of Iceland. The Euro zone countries, especially Germany & ... were believed to be doing the same. Iceland had committed itself to guarantee the first 15/20K GBP/Eur and the IMF settlement was believed to be dependent on Iceland agreeing to honour their committment.
Out anger was that the the unconditional guarantee accepted by the IoM was being left in the dirt.

So what happened?

Not much has been heard has it? Jesus it's quiet around here!


I think the most outrageous

  • vikingvictim
  • 11/10/08 31/05/09
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  • Mon, 16/02/2009 - 19:43

I think the most outrageous aspect of this business is that they didn't appear to know upon what basis they had desposited our money in KSFUK. That is just incompetent.
At the TSC hearing last week the IOM delegation promised to provide the correspondence between FSC/FSA about the deposit. Maybe we'll find out through that avenue what was going on. It seems likely to me that someone at either FSA or FSC has some answers to provide.


FSA/FSC - correspondence...

  • IceCrusher
  • 14/10/08 25/10/11
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  • Tue, 17/02/2009 - 12:50

I believe the FSA is back before the TSC meeting on the 25th - maybe more will be revealed then!


A likely story

  • steveservaes
  • 13/10/08 31/05/09
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  • Tue, 17/02/2009 - 09:22

I can't believe IOM FSC didn't know the basis on which it was deposited. They would know perfectly well that it was an unsecured deposit. I think they are just playing for a sympathy vote on this to cover up the cock-up.


a likely story indeed...

  • IceCrusher
  • 14/10/08 25/10/11
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  • Tue, 17/02/2009 - 13:00

Had it been a secured deposit, the amount of interest payable would have been noticeably less. HMT pointed out that it was the directors of the bank that made the 'commercial decision' to deposit those assets in the UK sister bank - so I agree with steveservaes that at least the bank management knew perfectly well that the asset was unsecured. This is just another IoMG 'story'.


FSC/ FSA Correspondence

  • icdbrazil
  • 10/10/08 30/11/09
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  • Mon, 16/02/2009 - 20:57

If they have already promised to provide it, can our IOM lawyer formally request them for it asap?

Answer probably no as not in their interest, but worth a try.


FSC/ FSA Correspondence

  • vikingvictim
  • 11/10/08 31/05/09
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  • Mon, 16/02/2009 - 21:20

No idea how that works.Maybe it goes on the record automatically.
However, I would imagine that something should appear on the subject in the TSC report.

IOM certainly seemed to think the deposit was protected somehow. So either they were mislead by FSA or just didn't know what they were doing. At the TSC meeting they certainly seemed to suggest that they believed they had been mislead. This implies that they didn't intend to simply make an unsecured deposit.

Either way, someone got it wrong, and someone has some questions to answer. Assuming that the right to ask those questions isn't removed by a SoA.....


Treasury Minister, Allan Bell

  • homeless
  • 18/10/08 01/01/16
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  • Tue, 17/02/2009 - 05:25

Vikingvictim on the 18 November 2008 Michael Cannan MHK questioned Allan Bell re his duty to protect depositors' money - in response Mr Bell claimed that they THOUGHT the deposits had been protected (that was the INTENTION) and he THOUGHT they were RINGFENCED (but of course we now know that they weren't).

At the Treasury Committee Meeting on the 3 February 2009, Mr Aspden. Chief Exec of the FSC, claimed to have file notes of each meeting with the FSA between March and May 2008, together with a letter, "setting out our understanding of what we had been told". He has promised to let Mr Todd have copies of this information. Mr Todd said that in response to questions from MP's in the UK the FSA have thus far not been prepared to disclose any advice they gave.

Mr Bell and the IOM government have got to explain this, it is crucial to our case, and at a time of financial crisis relying on, "thoughts, intentions and a belief that they would have the protection that we understood we would have in relation to that transaction (transfer of monies to the UK)", is foolhardy, irresponsible and a gross dereliction of duty.


FSC/FSA Correspondence

  • dclf1947
  • 10/10/08 31/08/09
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  • Tue, 17/02/2009 - 02:04

Vikingvictim I believe that you are correct. I believe the IOM got it wrong and that is why at the TSC meeting Mr. Brown was very reluctant to answer any questions and just stated that the IOM is handling the problem. I think that some time prior to the meeting he may have been told facts that if made public would make the IOM look very bad. I think questions will need to be asked sooner or later.