Nonsense reporting in "Director of Finance Online"

  • sami
  • 10/10/08 31/05/09
  • a depositor
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Posted: Fri, 28/11/2008 - 16:39

It was the title of this article "Isle of Man depositors still whingeing" that caught my attention, but on reading it I noticed it was inaccurate in claiming "if the risk didn't exist [offshore] then all UK depositors would surely seek to invest offshore."

It's a ridiculous claim in my view, as it implies there is a compelling reason to deposit offshore. It might even make uninformed readers think that offshore savers do not pay any tax.

*"The group asks the question as to why the IOM Government doesn't ask the UK Government to lend it £550m on similar terms in order for the IOM government to settle with depositors.

The answer is simple - the IOM government doesn't need bailing out like the Government of Iceland did, and the IOM has made it clear that it is not obliged to cover the deposits of those who invest in the banks that reside there.

This will surely serve as a reminder to savers that risk still exists offshore. If the risk didn't exist then all UK depositors would surely seek to invest offshore.*"

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I wrote a scathing reply.

  • KA
  • 14/10/08 29/06/09
  • a depositor
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  • Sat, 29/11/2008 - 09:07

I wrote a scathing reply. Tabloid reporting cannot be allowed to misrepresent our case.

I have also written

  • jenren
  • 10/10/08 31/05/09
  • unspecified
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  • Sat, 29/11/2008 - 00:51

Came across his article and was stunned.

I have written a heartfelt sob story. Maybe he has a heart... maybe not.

Mix of sob stories and hard facts may hit him. Or maybe he is just a total banker and does not care in the slightest.

I too dropped the author a line

  • Emabroad
  • 10/10/08 30/08/09
  • a depositor
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  • Sat, 29/11/2008 - 00:40

I too dropped the author, Editor Gary Howes a line first thing this morning, while I was still spitting! . . .

Dear Mr. Howes

Your article today on yesterday's hearing in the Isle of Man omits one or two salient points.

You imply that the majority of savers in KSF IOM and for that matter Landsbanki, Guernsey had an alternative available to them other than banking onshore. As such you are helping to perpetuate HM Government's much publicised smoke and mirrors approach to justify their failure to perform their constitutional obligations in respect of UK Government representation of Crown Dependencies overseas, albeit possibly unwittingly.

Despite the required official requests from both the Isle of Man and Guernsey being made, negotiations between the UK and the Iceland governments (and later the EU and IMF) revolved around the reimbursement of UK onshore IceSavers. In the press-fest accompanying these deliberations, the silence surrounding the case of those savers in the Crown Dependencies was deafening.

I am enclosing a report on recent research which conclusively rebuts the various misleading and mendacious statements issued by senior members of the UK Government, who consistently portray these small depositors as 'Tax-dodgers' and 'fat cats'. The research shows the reality of the situation - and reveals the smear campaign for what it is.

Thank you for taking the time to read this and I do hope you will read the report and inform your readers of its contents and thereby the truth as to why our depositors are obliged to bank offshore - and pay their taxes!!

NB: The .pdf of the report is posted on a blog entitled 'Summary of On/Offshore Banking & Taxation Research', at

A very prompt reply arrived within half an hour:

Hi Emma
Thanks for sending the information through. It will serve as a useful reference point for further articles.

Gary Howes

Director of Finance reply

  • srcoates
  • 10/10/08 31/05/09
  • a depositor
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  • Fri, 28/11/2008 - 19:27

For any editorial enquiries relating to the Director of Finance website please contact:
Gary Howes, Online Content Editor, gary(?)atalink [dot] co [dot] uk

My reply to the article in Director of Finance On-line;---

Dear Mr Howes,

I am contacting you to correct some erroneous impressions you have about investors in the failed bank Kaupthing Isle of Man. If I give you a thumbnail sketch of our problem you may reconsider the headline ‘Isle of Man Depositors still whinging’ Friday 28th Nov 2008.

Prior to the Icelandic bank crisis in early October the FSA and the Isle of Man regulators, the FSC, had contact with one another with the result that approximately £550million was brought back from the parent bank in Iceland and deposited in the UK—this information is a matter of record in the IOM parliament.

At the start of the week 6th Oct. both Gordon Brown & Alistair Darling announced the seizure (not freezing) of Icelandic assets in the UK to support their moves against Icelandic banks, following the apparent refusal of Iceland to honour their guarantees to savers. This claim, by HMG, was later shown to be false following the release of transcripts of the conversation the Chancellor referred to.

At this point it was only Landsbanki Bank that was in trouble however a run started on the Kaupting bank that put it in default of it’s UK banking licence resulting in the FSA putting in the administrators, with the subsequent result of £550million of the overall £821million deposits in Kaupthing IOM becoming involved in the administration of Kaupthing UK, this in turn put Kaupthing IOM in default, also into administration. Ironically several days later the Chancellor clarified his actions were against Landsbanki only!

The significance of this lack of clarity, is that Iceland would possibly have been able to regroup behind their one remaining bank, Kaupthing, lessening the ensuing problems.

The question has to be asked ‘given that the FSA were concerned enough to speak with the FSC IOM, why Kaupthing IOM with it’s depositor profile of at least 90% UK citizens for whom Brown & Darling were loudly trumpeting their protection of (who with the European Savings Directive being adhered to in the IOM, were paying tax on their earnings to the exchequer in the country of the source of their funds) were not forewarned of the FSA’s actions, thereby creating a chance of protecting this group of UK Citizen Savers?

You can see from this tale, as a group (KSFIOM Depositors action Group ) we are not asking for a bail-out only for the return of the £550million which represents approximately 2/3rd of individuals deposits. Indeed in the Treasury Select Committee hearing on 3rd November the Chancellor quite clearly said it is not HMG’s money---however presently we believe that it was part of the funds transferred to ING when the deal to take over the ‘Edge Deposits’ was transacted.

Individually there are many stories of great hardship and significant funds lost but the group, large and small depositors (who would benefit from immediate liquidation and subsequent compensation payout), are sticking together for the benefit of all depositors getting a solution. I would urge you to visit our website for further information.

I do hope now you view us in a different light.

Director of Finance Reply--correction

  • srcoates
  • 10/10/08 31/05/09
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  • Sat, 29/11/2008 - 15:49

Following Diver's post 'WHAT HAPPENED WITH ING - THE FACTS' I sent the following to Gary Howes at 'Director of Finance Online--having picked him up on his ill rescearched article--my reply should have been factually correct!

Dear Mr Howes,

With regard to this section of paragraph 7 in my original e-mail;

“Indeed in the Treasury Select Committee hearing on 3rd November the Chancellor quite clearly said it is not HMG’s money---however presently we believe that it was part of the funds transferred to ING when the deal to take over the ‘Edge Deposits’ was transacted.”

I have to appologise as my reporting was also ill informed—my colleagues in the KSFIOM Depositors Action Group have corrected me in that our funds were not part of a transfer to ING, but remain ensnared in the administration of Kaupthing UK. However their return to KSF IOM is prohibited, without the express permision of HMG, within the terms of the Court Order putting Kaupthing UK into administration.

Reply using facts

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
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  • Fri, 28/11/2008 - 23:09

Writing reply email as we speak, also putting facts forward that should have been properly investigated and reported in the first place.

Excellent reply to Finance Director, let's send more

  • sami
  • 10/10/08 31/05/09
  • a depositor
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  • Fri, 28/11/2008 - 19:34

Very good reply. I hope we all complain about that article, in particular the title with the word "whingeing".

The title is something to be expected from an uneducated moron rather than a finance writer, and shows that the author had not taken enough trouble to understand the truth behind the situation.

Quite clearly, it also ignores the point that saving offshore still involves paying tax in UK if you are UK resident.