Meeting with Mark Hoban/Legal

  • Diver
  • 11/10/08 31/05/09
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Posted: Thu, 27/11/2008 - 18:43

I had a meeting with Mark Hoban (shadow financial secretary) today and thought I should share the outcome of the meeting as well as my subsequent thoughts – this won’t be easy reading for some of you.

You should know that Mr Hoban had a meeting with Alan Bell this morning so he is completely up to date with the IoM position.

The single thing that I took away from this meeting is that Mr Hoban doesn’t believe the UK government has a legal or moral obligation to treat KSFIOM or its depositors any differently to any other unsecured creditor of KSFUK. I can't put it any more plainly than that. I put all our arguments to him, and from every possible angle but that was still very much his opinion.

He has asked for an independent inquiry into the FSA’s role in our plight as he believes there needs to be more clarity on what went on between the FSC and FSA. We both however agree that there was almost certainly nothing put in writing and anything that was said would be deniable.

He also believes that the speed of the administration in London needs to be looked at as the recovery of funds from KSKUK is critical to any restructuring plan for KSFIOM.

My opinion as a result of this meeting is a simple one. If HM opposition don’t believe the government has any obligation to us then we really don’t have a hope in hell of bringing any pressure on the UK treasury to treat us any differently to other unsecured creditors. I’m not commenting here on whether this is right or wrong…simply stating my own personal opinion.

The fact of the matter is that we have been deserted by the UK and there isn’t that much we can do about it. The sooner we come to terms with that and re-focus our efforts the better (again, this is just my opinion).

There is every possibility that the IoM treasury will petition for the removal of PWC as PL, once it has put in place its own ‘restructuring team’. If this is going to happen we need to be in a position where we are able to make the IoM treasury accountable to us in ways that it hasn’t been up until now and that is where I believe our efforts are best focused.

To ensure we keep all options open, however, I will continue with my meetings with UK MPs – the next one being with the shadow justice minister.

I still believe we need to have representation in the UK, if for no other reason than to keep a watch on EY and Alix Partners here in London. There may still be a possibility of looking into the UK government’s actions to date (from a legal stand point) but we will wait to get Edwin Coe’s opinion on that before we proceed. I will not use the legal funding for endeavours that have little hope of producing any meaningful results – we’ve lost enough money as it is.

I spoke with David Greene (of Edwin & Co) this morning and he is currently liaising with our legal rep. in the IOM. Once they have exchanged information I will speak with both of them to get an understanding of what they feel the best course of action is. Once this is clear in my own mind I will report back here.

FYI - So far I have not received any objections to seeking legal representation in the UK.

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Contact with the FSCS

  • srcoates
  • 10/10/08 31/05/09
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  • Fri, 28/11/2008 - 20:07

Last week on 19th Nov. I had a phone call from the FSCS regarding an e-mail I had sent.

When we finished discussing the answers to my original queries I asked him how the situation was unfolding with the Kaupthing UK administation, after a little chit-chat I then went on to ask what the outlook was for unsecured creditors of the bank and if they were all to be treated even-handedly. He replied yes they would be. I then established that KSF IOM was an unsecured creditor--he said he believed so.

My final question was; In view the reported satisfaction of London Transport with the outcome of their meeting with Kaupthing UK administrators, is it then likely that KSF IOM and it's depositors will be as satisfied?----I deduced from the hesitation and intake of breath before his answer of 'You will have to speak with the Treasury for an answer to that', there may well be a little political chicanery and compensation to some organisations in this administration.

On the 21st of Nov. I had an appointment with my MP, Mark Prisk. He has written a letter to the Chancellor on Mon 24th regarding the even-handedness of treatment of all unsecured creditors Kaupthing UK, and promises that if he does not receive a reply before Business Questions in Parlaiment on 4th Dec. he will ask the question again there. He also said he would speak with Mark Hoban.

Am I being paranoid?


I have thought for some time

  • expatfrance1
  • 15/10/08 31/05/09
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  • Sat, 29/11/2008 - 07:48

I have thought for some time that the local authorities who have stated that they will not loose any money could have been told by the Treasury that if there are not enough assets within Kaupthing to ensure all their money is returned, they will recieve some form of top-up from the Treasury.


Just because you're paranoid it doesn't mean they're not out ..

  • Alastair
  • 10/10/08 30/09/09
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  • Sat, 29/11/2008 - 00:21

..to get you.

Yes this is what I've been thinking. If Transport for London think they will be ok but the FSC doesn't then assuming we are unsecured creditors we are not being treated equally. This has to be a question for E&Y on Monday.


FSCS response re KSFIOM

  • mikeinfrance
  • 12/10/08 28/09/09
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  • Fri, 28/11/2008 - 21:33

srcoats..I was struck by your comments regarding the FSCS guy's response to your KSFIOM question...
I'm beginning to think that there's even more of a mystery surrounding the £557M than we think..Why do E &Y still not know the actual status of this money (according to their recent report) and why is there a paragraph (27) in the transfer order which effectively forbids KSFUK moving any funds to KSFIOM without the treasury's authorisation, and why does Alan Bell think that it's highly unlikely that this money will be recoverable.........

On another related subject does anyone have any knowledge of when the UK govt/treasury first contactd ING regarding the Edge transfers, or how could we find out? It has always seemed to me that this must have been planned before they took action against Landsbankii, knowing full well what was going to happen to KSFUK. If I remember correctly the KSFUK transfer order was presented to parliament the same day that KSFUK went into administration.


FSCS response re KSFIOM

  • Ally
  • 13/10/08 31/05/09
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  • Fri, 28/11/2008 - 22:31

Mike

You are right the the transfer order was made at 12:05pm on the 8th October coming in to effect at 12:15 and wasn't presented to parliament at 16:00.

Haven't seen anything yet to say when discussions commenced with ING. But as you say they can't have phoned up ING the night before and asked them if they fancied taking on 170,000 accounts


Landsbanki, KSFUK, ING

  • mikeinfrance
  • 12/10/08 28/09/09
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  • Sat, 29/11/2008 - 04:20

Ally...This was the order of events on 8th Oct. ( 2hrs 5 min between freezing Landsbanki assets and transferring Kaupthing UK Edge accounts to ING. Who can say that this wasn't all planned beforehand ?

Landsbanki freezing order
Made at 10.00 a.m. on 8th October 2008
Laid before Parliament at 12.00 noon. on 8th October 2008
Coming into force at 10.10 a.m. on 8th October 2008

KSFUK transfer order (Kaupthing Edge accounts to ING)
Made at 12.05 p.m. on 8th October 2008
Laid before Parliament at 4.00 p.m. on 8th October 2008
Coming into force at 12.15 p.m. on 8th October 2008

The KSF transfer order included this which effectively froze our £557M:

Moratorium on payment to related companies
27.—(1) Kaupthing shall not make any payment, dispose of any property or modify or release any right or liability to or for the benefit of a related party without the prior consent of the Treasury, and any such purported payment, disposal, modification or release shall be void.


Freedom of Information Act?

  • jmf
  • 16/10/08 31/10/09
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  • Fri, 28/11/2008 - 13:56

Diver,

Thank you and the other team members for all your efforts. We are deeply indebted.

You mentioned in your post still needing representation in the UK and pursuing the roles of the FSC and the FSA in our plight, as well as the unlocking of information in sealed papers. Codpiece has written in similar vein about a request for legal discovery about the actions of the FSA. Is the Freedom of Information Act relevant? I have no idea but I copy to you below part of an email from a relative in Australia who is keen to help.

"You may wish to check if the KSF IOM depositors group intends sending a Freedom of Information request to the various regulators about what each of the English regulators (HM Treasury, FSA and FSC) were told and when.

The Freedom of Information Act in Australia allows for limited disclosure of government documents. The key with FOI requests is you need to ask appropriate questions (because you can only be provided information that directly relates to the question asked) and you need to know what the information is going to be used for. FOI requests are not costless (there is a marginal amount to register and some additional search costs allowance), but it does represent a useful way of getting information about what the government knew"


Moral Obligation

  • nivit
  • 19/10/08 31/05/09
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  • Fri, 28/11/2008 - 10:26

Re-reading Hansard, the closure debate of the 6th November I get the impression that several of the speakers thought HM gov. do have a moral and possibly legal responsibility to-wards us. Particularly those of us who found ourselves unwilling depositors in KSF.

"Sir John Butterfill (Bournemouth, West) (Con): Part of this is affecting some of my constituents. Many British citizens working abroad who had sold their homes were not allowed to open bank accounts in the United Kingdom and had to have offshore accounts. My constituents also had accounts in Guernsey and the Isle of Man, but they put their money into subsidiaries of building societies: in the case of the Isle of Man, Derbyshire building society, which had a subsidiary there; and in the case of Guernsey, Portman building society, which has its head office in my constituency. They thought that in doing so they were extremely prudent, because building societies are regulated by the Building Societies Commission, which in turn reports to the Treasury. Even if a building society has overseas subsidiaries, the whole of its activity must be approved by the commission. When Derbyshire was sold to Kaupthing in the Isle of Man and Portman was sold to Landsbanki in Guernsey, there was a duty on the part of the commission and, by extension, to the Treasury, to ensure that their deposits were properly safeguarded, but it appears that that did not happen. I think that there is a case against the commission and the Treasury on this point."

and even the other side thought the building societies had a responsibility :

"Mr. Mark Todd (South Derbyshire) (Lab): My hon. Friend has been generous in giving way. I have a constituent who invested in Derbyshire Offshore, which was sold to Kaupthing Singer & Friedlander, and another constituent who contacted me had the prescience to query the equivalence of the guarantee given. A building society guarantee—bearing in mind that there have been no failures of British building societies ever—was regarded as robust. A guarantee offered by an Icelandic bank was certainly not equivalent, and he detected that. Could he get access to his account and trade it in? No, not without the penalties that were levied. In some cases, the societies that sold on their accounts bear some responsibility.

Mary Creagh: Indeed they do."

If this is indeed the case then HM gov cannot escape their moral and legal responsibility as it is they through the treasury/FSA who are regulators of the Building Societies. Has this point ever been put to the legal rep?


UK Position on KSFIOM no surprise - adjournment is intelligent

  • BustedFlat
  • 20/10/08 31/05/09
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  • Fri, 28/11/2008 - 09:55

Diver - amazing efforts as ever. I agree some UK legal prescence is relevant and would contribute if necessary.

I don't see that the UK's position here is surprising. If you recall both Iceland and IOM have mooted the possibility of litigation against the UK previously but the UK has them both over-a-barrel : IOM needs to maintain its relationship with the UK due to dependencies and Iceland is bust and has had to simmer-down in order to get the IMF funding (where the UK has a loudish voice) without which they'd be heading back to the stone age rapidly. I don't think either will now want to launch aggressive legal action against the UK hand which in some ways feeds (and beats). That doesn't mean we should hold-off from legal representation though because, once enough information is gathered, it still might reveal a chink in the UK's stand-offish armor which we can push even if IOM/Iceland don't.

It looks to me like the only strong shot here is in the IOM governments' will to introduce a solution:

  1. They clearly can't just pull out £800m to cover depositors because they haven't got it.

  2. Therefore, to return any sizeable quantity of funds to depositors they've either got to borrow now or string-out the 'payback' until they can organise funds. That's what the thrust of their investigation and request for adjournment is all about.

On the basis of the above I have to support the adjournment although it's hugely depressing to face more time without a penny from anywhere. Additionally Simpson mentions there are still 38 KSFIOM employees on-board. That could be good if the restructure happens since they'll have the people to run it with straight away .. but the staff are getting paid for sure out of the assets and from income from loan book, as is PwC (who don't mention their fees of course).


Mark Hoban - I'm not so sure about him, Diver

  • romasanta
  • 16/10/08 02/10/10
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  • Fri, 28/11/2008 - 00:21

I didn't like what he said, so I did a little checking and I wasn't favourably impressed - see my blog entry:
http://chat.ksfiomdepositors.org/blog-entry/mark-hoban-im-not-so-sure-ab...


Our comments to the press

  • Diver
  • 11/10/08 31/05/09
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  • Thu, 27/11/2008 - 22:14

Ongoing Limbo Looms for British Depositors

At the hearing in the Isle of Man today it was agreed to defer any decision regarding the fate of KSFIOM for a further 60 days, leaving those with funds deposited in this once sound bank no wiser as to what has happened to their money, what they are likely to get back, or when that is likely to happen.

Since the British Government found it possible to lend money to Iceland, on condition outstanding debts were repaid to British depositors in the UK mainland, why doesn't the IOM Government ask the UK Government to lend it £550m on similar terms? That way depositors can be speedily repaid. The IOM Government can pay interest out of what would have been used to fund the compensation scheme. Between the two authorities and their respective regulators they can sort out the mess that they created in the first place - finding the best way to return the KSFIOM funds embroiled in Gordon Brown's ill-advised actions regarding KSF London.

The end result being that British savers get their money back and the two governments sort out the issues that clearly exist between the two regarding the IOM's status as an independent financial centre, without using devastated savers as pawns in this painful power game.


Why doesn't the IOM Government ask the UK Government to lend

  • SusanfromBC
  • 10/10/08 31/05/09
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  • Fri, 28/11/2008 - 17:44

it £550m on similar terms? Yes Diver, an excellent question and a viable solution -one that I also think must be asked on our behalf.

Once again a profound thank you for all of your efforts.

BTW I finally was able to send you some money via Paypal


Press Comments

  • frozenrover
  • 11/10/08 31/05/09
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  • Thu, 27/11/2008 - 22:31

Completely agree Diver.

Could our IOM team canvass the thoughts of Alan Bell on this point ?


Diver, that's pretty much

  • skintagainnow
  • 10/10/08 31/05/09
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  • Thu, 27/11/2008 - 20:39

Diver, that's pretty much what my thoughts and posting the other day were on the ioM deposit. Agree not good reading but that's the way the cards fall and we have to find ways to work around this, the sealed papers I'm guessing at being the key to unlocking most of the information and possibly whatever if anything the FSC have on the talks with FSA.


Thank you for passing on this

  • ianw
  • 14/10/08 n/a (free)
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  • Thu, 27/11/2008 - 19:50

Thank you for passing on this report of your meeting with Mark Hoban. I fully agree with your sentiments. I have a meeting with Sir John Butterfill (he spoke at Mary Creagh's Adjournment debate) at his surgery on Friday 5th December and I will certainly raise this issue with him. It is disgraceful that KSF UK is using these assets to preferentially fully compenate their investors when the legal obligation is only £50k. My understanding is that as a direct result, we the IOM investors are directly funding this obligation by HMG that was in excess of legal obligations. This is completely unfair. As a minimum, the £550mio must be returned in full.

Suggest we all urgently lobby our MPs on this issue. Hoban's stance is unacceptable


This is NOT the case and I

  • frog
  • 10/10/08 13/09/09
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  • Fri, 28/11/2008 - 01:31

This is NOT the case and I wish it could be well understood and not repeated often because it undermines our overall understanding, and therefore our potential to move forward with a common understanding and direction.

The UK Government DID NOT use KSFUK's money to preferentially bail out the UK retail depositors of KSFUK. What happened was the FSCS was advaned a loan to pay ING the amount owed those depositors and the account information was transferred. ING paid out the depositors using that money. What has now happened is that instead of a large amount of UK retail depositors being unsecured creditors of KSFUK, there is just one; replacing them - the FSCS.


misunderstandings

  • mikeinfrance
  • 12/10/08 28/09/09
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  • Fri, 28/11/2008 - 16:06

Frog I think it's quite right to keep pointing out these inaccuracies and misunderstandings which continue to be perpetuated on the site. If people talk to their MPs but give them inaccurate information then it doesn't help our cause much.I wonder what happened to the Position Statement which so many people spent so much effort in compiling ? It seems to have disappeared into the depths of this site Shouldn't it be posted perhaps on the home page of the other site and/or this site where it can be easily seen and referred to by anyone ?


Position Statement

  • Tricky Dicky
  • 24/10/08 30/05/09
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  • Fri, 28/11/2008 - 16:19

A new Position Paper/Statement is now being drafted, there is however this item which I think answers this on the .org web site http://www.ksfiomdepositors.org/public-page/questions-answers


HMG as Godzilla in ING-KFS Cash Crunch: Ask Iceland Why.

  • VikingRaider
  • 10/10/08 31/05/09
  • unspecified
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  • Fri, 28/11/2008 - 02:21

Frog is probably right, but HMG is not too unhappy that an extra £600m of our money is oiling the wheels of M1, allowing LIBOR to fall and thus taking pressure of the UK banking sector. Cynical, perhaps -- nobody should expect a Scrooge-like conversion in Downing Street -- but Iceland might be able to tell us a little more yet as to why HMG is acting like Godzilla. Mr. Oddson, the governor of the Icelandic Central Bank has hinted as much and appears to want Reykjavik to be more candid --there is, apparently, more to the story than Iceland has revealed thus far.


Good Work Diver

  • Codpeace
  • 23/10/08 30/11/12
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  • Thu, 27/11/2008 - 19:49

Not what we wanted to hear I'm sure but realistic. How much better you would be than Mr. Simpson (is his first name Homer?) - Supply of information is key and whatever Homer was doing his reports lacked information.

As the FSC will be the the ones who lost in the FSA/FSC discussions - then maybe there is a chance that a scrap of proof will come from FSC. I am sure any written document at FSA will have been through the shredders both electronic and paper varieties but just maybe someone at the FSC might have had the sense to preserve something?? Is there any chance that a request for legal discovery could come up with something that will show the FSA contrived the transfer in some way. Even the bank employees or Docherty may have some information??
The return of the GBP550M is our best chance of success and I do not think we should give up the legal case for this and we must also continue to keep the publicity campaign in full tilt to show that HMG is dumping us in the cold. The whole secrecy bit needs to be thrown at the purveyors of "open government' If we can discover some evidence of wrong or inept doing then we will have a fighting chance.

Keep up the good work and we all need to keep the pressure on the politicians - we will only go away once we get 100%!!!


I'm with you Diver... BUT....

  • Lucky Jim
  • 13/10/08 31/05/09
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  • Thu, 27/11/2008 - 19:27

...on the one hand HMGovernment is 'doing it by the book' in making it clear that the problem is one that can only be resolved between the indepedent IOM authorities and the Iceland Government, whilst on the other hand HMG has had a specific role to represent the IOM in discussions with Iceland. So HMG can't throw up its hands and say: "it's got absolutely nothing to do with us"

I would have thought that one of the central issues in HMG's discussions on behalf of the IOM would have been that of Iceland accepting responsibility for securing the depositors' money, & that being a prerequisite of any IMF loan to Iceland. It certainly was such in relation to the Iceland banks in the UK, so why not the same in respect of KSFIOM which is part of the United Kingdom, despite having its own 'home affairs' administration & judiciary?

I feel that this angle should be raised with the Treasury - and the Treasury Select Committee - to ascertain whether Iceland infact was asked to extend the same undertaking to depositors in KSFIOM as well as KSFUK & Icesave, as a prerequisite of HMG endorsing the IFM's conditional loan to Iceland. If it didn't then why not? If it did but Iceland was 'let off the hook' as far as KSFIOM was concerned then that raises the big question - WHY ? Surely, what is 'sauce for the goose is sauce for the gander' !


Iceland responsibility for securing the depositors' money

  • iainb
  • 11/10/08 01/02/10
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  • Fri, 28/11/2008 - 07:31

I'm glad this theme has re-emerged

it has been discussed in posts recently and trailed in the media but until now i have not seen an authoritative response

as part of the IMF loan conditions it seem that Iceland has expressed an intention to repay depositors in branches of its banks in most countries..including Uk

but no mention specifically of IOM..

two recent bits of information are:

Mike simpson’s statement of 27 Nov
'The Isle of Man Treasury informed the court that high level discussions were still taking place between the UK Treasury (which had confirmed that it would represent the interests of the Isle of Man) and the Icelandic Government which now owns Kaupthing Bank h.f. but that to date there had been no tangible outcome to these discussions.'

Mike simpson’s affidavit
'In respect of amounts owed by the Company’s parent company Kaupthing h.f.,
discussions have been held with the parent company and last week I attended a meeting
in Iceland with Gudni Adelsteinsson who was representing Kaupthing h.f. and the
Resolution Committee. It became clear at that meeting that the likelihood of the Group
being able to honour the parental guarantee is very low. However I have put them on
notice of my intention to claim under the guarantee and will submit a claim at the
appropriate time.'

this does not sound hugely encouraging which is worrying because my MP and financial adviser friends all felt that IMF influence on Iceland and the honouring of the parental guarantee offered the best solution

where does that leave us?

What is the cause of the mess we find ourselves in..for therein lies the solution

Let us try and agree a scientific cause for this..as opposed to a legal cause which inevitably brings with it the issue of liability and blame

The final cause for our predicament is the banks inability to access its substantial deposit of 550 GBP with KSFUK

If the bank had access to that sum then it could continue in business (is that right?)

Our immediate actions should therefore be aimed at regaining access to that sum

From his affidavit Mike Simpson say’s he has been trying to do this but it sounds difficult and it will take a long time

so a loan will be required to temporarily fill the gap

Where will this come from?

Where have all the loans to banks in recent weeks come from...governments that can afford to give loans to banks..and have done so on many occasions...IOM and/or Uk govt are obvious possibilities

is this where we should focus in the coming weeks?


Good point

  • uptight61
  • 14/10/08 n/a (free)
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  • Thu, 27/11/2008 - 19:34

Good point, Jim. This issue was also brought up on another depositor website. It needs explanation for it appears as if we have been betrayed by OUR government. To me this was the "easy" way for us to get all our money back.


Public opinion

  • romasanta
  • 16/10/08 02/10/10
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  • Thu, 27/11/2008 - 19:01

Diver, Its just as well that you wrote this - it is, as you say, not easy reading.
I assume that you refer to legal action when you say "........ we really don’t have a hope in hell of bringing any pressure on the UK treasury...".
Then we must give more attention to swaying public opinion to overwhelm the UK government to do something for us.


read my MP's reply

  • humphrey
  • 10/10/08 01/03/11
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  • Thu, 27/11/2008 - 19:24

My MP David Jones' comments agree with Diver, we must lobby opposition MP's to raise this in the House of Commons.


MPs comments

  • mikeinfrance
  • 12/10/08 28/09/09
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  • Thu, 27/11/2008 - 20:32

humphrey I found your MPs comments encouraging..copied from your post:

"It appears that the Government is attempting to wash its hands of the KSF Isle of Man issue.
This afternoon before receiving the letter, I had a conversation with a colleague who has constituents similarly affected. We agreed that if we received an unsypathetic response from the Treasury, we would have to raise this as a political issue in the House."

This also from The Rt. Hon Douglas Hogg QC MP (courtesy of FalconVets post ):

"I have always accepted - and I think it is an important principle of practice and law - that if the British Government was in some way at fault then the British Government should pay compensation to the extent of the loss caused by their fault. That is a principle that has, for example, been adopted in the case of the Barlow Clowes failure and it is going to be a principle invoked in respect of the Equitable Life losers.
There is a further consideration which is one which you address in your emails; the question being raised is that in effect the British Government has seized assets which are properly the property of the Isle of Man branch of the bank. If that is right and that money which was the property of the Isle of Man branch has been wrongfully siezed, then it should be returned. I understand that there are applications by the Administrator of the Bank to achieve that result."

I also think that pressuring the treasury select committee to hold an inquiry into the whole affair of the £557M would be a good complement to any legal approach. John Mc Faddon certainly seemed to be on our side during the recent Q&A session and do I recall that he called for an inquiry regarding the timeline of freezing of assets etc using anti-terrorism legislation, although I've heard nothing further on that.


I Agree Diver

  • poppytwo
  • 06/11/08 31/05/09
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  • Thu, 27/11/2008 - 19:44

It is time for the IOM Govt to accept responsibility for the situation instead of sitting back watching everyone else run around in circles. KSFIOM was an Isle of Man Bank and the IOM Govt are responsible for it.


Bond companies and IFA's too

  • humphrey
  • 10/10/08 01/03/11
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  • Thu, 27/11/2008 - 19:55

need to accept responsibility for placing people's money in what has proved to be a very unsafe place.


Representation in UK and Potential Legal Action against KSFUK

  • timeout
  • 22/10/08 22/06/09
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  • Thu, 27/11/2008 - 20:50

Diver,
I agree with you that it is vital to have legal representation in the UK.

Further I believe it is worth considering legal action against KSFUK and/or the Treasury on the following grounds: In the event that the KSFIOM deposit of some £550m is treated as any other unsecured creditor, this creditor should take action to ensure that only upto a maximum of £50,000 per depositor is used from this credit as per the UK legal limits. Any further compensation for UK depositors should be funded by the UK Treasury and not the unsecured creditors of KSFUK.

Secondlty, the KSFIOM can also attempt to net off any other balances against the £550m to reduce the amount ultimately receiveable. The UK Government have tried to mandate that no netting off will take place without their approval and this may require a legal challenge from our legal representative in UK courts.


Timeouts comments re: £50,000 per depositor

  • podather
  • 10/10/08 31/05/09
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  • Thu, 27/11/2008 - 23:23

I have no idea whether this is the case but if the Financial Services Compensation Scheme has a legal limit of £50,000 per depositor and you're suggesting we insist that this is the maximum payout from the administrators in KSF UK back to the Treasury for each depositor whose position it took when it transferred there balances to ING, then is KSF IOM as a depositor in KSF UK only legally entitled to £50,000 of its £550 million back also ?
I agree that if the Treasury replaced 200,000+ depositors as a creditor of KSF UK and gave ING £2.5 billion to cover the deposits of those 200,000+ depositors and made a decision to cover 100% of these deposits out of kindness then it should only be entitled to claim a maximum of £50,000 per depositor irrespective of the value of the deposit it agreed to cover in full.
But then maybe we will be Hoisted by our own petard if that is the case


Is KSFIOM Depositor or Creditor in KSFUK

  • timeout
  • 22/10/08 22/06/09
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  • Thu, 27/11/2008 - 23:36

Podfather,
Your question is a good one. I am highlighting the fact that the UK cannot have it both ways and suggest on the one hand that KSFIOM is a depositor and on the other the money is just part of the unsecured creditors claims.

If it is a Depositor, than these are retail deposits on trust from a Financial Institution rather than a corporate, like the Charities. In that case, UK Citizens should be treated like all other Citizens otherwise we could have a claim under DISCRIMINATION laws against KSFUK.

If KSFIOM is an unsecured creditor than as a creditor it should insist that the UK Government cannot change the law and expect a creditor to incur any more than £50000 per depositor becuase at the time of the money being put it that was the law and expectation.

Either way we need to consider an action in the courts in UK to ensure that the actions of the UK Government and double standards come under public scrutiny and open the wider debate as to what really happened in the collapse of KSF UK and IOM. The Governement only listens when the wider UK VOTING public starts getting visibility of their actions without red herrings about Tax Havens being thrown about.


Again, more confusion!The

  • frog
  • 10/10/08 13/09/09
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  • Fri, 28/11/2008 - 01:44

Again, more confusion!

The upstreaming of the £550M from KSFIOM to KSFUK is not a retail depositor transaction in much the same way that my council tax payment sent to the council and then put into KSFUK with many others is not a retail deposit. KSFIOM is an unsecured creditor of KSFUK.

The £50,000 compensation limit provided through the FSCS doesn't apply here.


KSFIOM is a Creditor

  • timeout
  • 22/10/08 22/06/09
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  • Fri, 28/11/2008 - 08:41

Frog,

I agree that KSFIOM is a creditor to KSFUK.

We still need the LP to confirm whether at the time of the transaction there was anything put in place to make it a secured creditor (despite the fact that all comments suggest it is an unsecured creditor - we need positive affirmation).

Since KSFIOM is an unsecured creditor, it should take legal action to ensure that the UK Government does not use moneis that would under normal UK Laws be available to creditors in a winding up order. Any extra costs due to the amendment of the rules for the sake of KSFUK retail depositors should be borne by UK Government.

Moreover, the IOM Government, being a depositor in KSFIOM is now also an unsecured creditor in KSFUK. Hence, if I was the IOM Government I would also be interested in taking action against KSFUK via KSFIOM LP. If we can get Mr Alan Bell to see the importance of this for once we may be able to get IOM Government to work with us and not just be the opposite side to us on this. It is easier to fund this sort of legal battle with another government on our side rather than do it alone.


timeout, I am very interested

  • IceCrusher
  • 14/10/08 25/10/11
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  • Fri, 28/11/2008 - 10:35

timeout,
I am very interested in the perspective you have shown throughout this series of posts. How do you think the UK bank being under Administration differs from a normal liquidation? HMG chose to underwrite the Edge Depositors' full amount of their accounts by funding the FSC to see it done. This I see as an interim step pending winding up, but it could conceivably run like this for months. How does the Icelandic guarantee work for these deposits if they have not been liquidated, but effectively moved elsewhere - I mean they have not been triggered by liquidation, so both the Icelandic guarantee and FSCS are still in abeyance aren't they?

If I've missed it elsewhere then I apologise, but I cannot recall seeing a full explanation of this set of circumstances, which seem quite odd to me. The Govt basically took over the bank and forced the movement of 170,0000 depositors elsewhere, they didn't liquidate the bank to repay depositors, they replaced them with a single creditor. If you go to the ING sites you can (could) see the welcome signs out for KSF customers.

I think you are advocating the repayment of this single creditor (as a replacement for retail depositors, is this a retail or priority creditor?) up to the legally required compensatory limit of £50,000 instead of any 'overpaid' amount given by HMT. Should this figure not be reduced by up to the maximum of ~£16,000 from the Icelandics? The remaining £34,000 per deposit (max) would then come from FSCS funding. Looking at these combinations of numbers, then if every other entity pays what it should, the underwriting of the Edge deposits by HMT would be minimal will it not? If that is the case, the impact on the IoM asset from HMT would be even smaller, though I am perplexed to know why those who did not benefit from the HMT bail-out should contribute to the kitty for pay-back. I have other points, but perhaps you would kindly elaborate on the above?
Ice


Return of funds being held by HMG

  • Expat13
  • 19/10/08 31/05/09
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  • Sat, 29/11/2008 - 04:54

If we can get nowhere with HMG legally or otherwise could we not bring the issue to the International Court of the Hague?