Information from winding-up petition

  • cold-dose
  • 11/10/08 31/05/09
  • unspecified
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Posted: Mon, 20/10/2008 - 19:44

From the court documents:

KSF(IOM) had paid up share capital of £5m.

Shares were held by Kaupthing Holdings (Isle of Man) Ltd. This company was itself wholly owned by Kaupthing hf. (the Icelandic parent).

KSF(IOM) has four directors: Andrew Davies, Aidan Doherty, John Cashen, and Donald Gelling.

On 8th October the FSA determined that KSF UK no longer met the 'threshold conditions' and would be unable to meet its obligations to its depositors. This was deemed to be an act of default according to the terms of the UK depositors guarantee scheme.

To provide continuity of business and preserve financial stability, Kaupthing Edge UK was transferred to ING.

The remainder of KSF UK was placed into administration under Part II of the Insolvency Act 1986. E&Y were appointed as administrators.

KSF(IOM) had deposits of £516m in KSF UK, which remain in the part of the business in administration.

KSF(IOM) had £164m on deposit with Kaupthing hf. in Iceland.

Kaupthing hf. provided a guarantee to KSF(IOM) on 17 September 2007.

KSF(IOM) has c. 7000 depositors with a total of c. £850m on deposit.

On hearing of the administration of KSF UK, KSF(IOM) contacted the UK administrator, who said she was unable to say when or if the money held by KSF UK would be available to KSF(IOM).

KSF(IOM) then contacted the FSC.

KSF(IOM) then urgently contacted Kaupthing hf. in Iceland, seeking to withdraw the funds it held on deposit there. This was refused. Following further discussions with the FSC, KSF(IOM) requested fulfilment of the parental guarantee to an amount of £300m no later than close of business on 10 October, or they would be unable to fund withdrawals.

£300m was the estimated amount required to meet eight days' worth of withdrawals, which had been running at between £30m and £40m a day in the period before this point.

Kaupthing hf. replied that due to the financial and economic situation in Iceland it was unable to provide any funds.

The directors believed that the level of withdrawals would continue to increase quickly. Without immediate access to funds it would have been unable to fund any further withdrawals. Given the lack of access to liquid funds from either the UK or Iceland the directors felt that the bank would be unable to pay its debts in the immediate future (i.e. insolvent). They voted on a resolution resolving this at 9:43pm.

Immediately that the result of this vote was communicated to the FSC the banking licence of KSF(IOM) was suspended (but not withdrawn).

KSF(IOM) and the FSC jointly petitioned for winding-up the following morning.

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Re: Info on winding up petition

  • Ally
  • 13/10/08 31/05/09
  • unspecified
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  • Mon, 20/10/2008 - 21:13

Cold-Dose

I seem to remember, I think it was at the meeting held in the Gaitey theatre on 8th October that the share capital was £40 million. But as you say the documents clearly state 5 million shares issued at £1 each.

Have I made up of the £40 million share capital or has it really been mentioned previously?


£40m share capital?

  • cold-dose
  • 11/10/08 31/05/09
  • unspecified
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  • Mon, 20/10/2008 - 22:26

Not sure where the £40m has come from - I've not see any mention of the share capital elsewhere, to be honest.

Total authorised is £10m, of which £5m was issued.