Our Money in the UK is Linked to the UK doing a Deal with Iceland!?

  • grandian
  • 11/10/08 31/05/09
  • unspecified
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Posted: Tue, 28/10/2008 - 09:42

The key to us getting at least a substantial proportion of our money back is in the hands of negotiations between PwC on our side and E&Y London, who are charged by the UK Government and bound by the "closed" court order. I too am very nervous of this situation.

Digressing a little, it is clear to me following comments by Alastair Darling that the UK Government are treating IOM as non-UK, in fact exactly the same as it is viewing Iceland. They see IOM as outside their jusridiction. They seized the UK assets on behalf of UK depositors. Unless they change this stance (which politicions are adverse to do as it would indicate that the "terrorist" action of Iceland was a mistake) i fear we are losing a spirited fight. If they give us our money back then theoretically they should also remit UK held funds back to Iceland. Clearly ths is not going to happen as they will go to ING on behalf of UK savers.

Considering the above, the key is still in the UK doing a deal with Iceland. That is our way out, perhaps the only one.

Bad news indeed.

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IOM postion different from Iceland

  • Alastair
  • 10/10/08 30/09/09
  • a depositor
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  • Tue, 28/10/2008 - 10:56

Not sure I follow this at all. Our 550 is a liability on the KSF UK balance sheet, we have I assume at very least a unsecured creditor position with regard to this, and if the HMG have any involvement in those funds being placed there in the first place vai the FSC/FSA then I would argue a preferencial position versus any claim by HMG.
What liabilities does KSF UK have to Iceland? The other assets seized by HMG would I expect large off-set against liabilites to UK customers.

Also I would expect any negotiations of significance are happening at governmental level. The 2 administrators will just be trying to apply the rules so as not to be sued by us. If they get it wrong and E&Y treatment of the funds in flight is a possible example, they both have very deep pockets and they shouldn't forget Arthur Andersens.


IOM postion different from Iceland

  • grandian
  • 11/10/08 31/05/09
  • unspecified
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  • Tue, 28/10/2008 - 12:13

My point is this. UK Plc seized / froze the assets in KS&F UK essentially to stop Kaupthing Iceland taking the funds to sort out it's own liquidity problems. Vis a vis to safeguard UK deposiors money. One would presume that KSF UK did not hold in it's own treasury enough to cover UK depositors funds (excluding IOM money) when frozen. Otherwise why is the UK Plc negotiating the lending to Kaupthing / Iceland of funds to help it settle it's liabilities (presumably those in the UK). It therefore follows that the £550M could be used to fill the gap in the KSF UK coffers. Since KSF IOM is not related directly to KSF UK and UK Plc is distancing itself from covering IOM losses (I believe Gordon Brown of Alastair Darling have stated that the KSF IOM issue is the responsibility of Iceland, not the UK), then with this stance the only solution is for the UK to do a deal with Iceland over IOM depositors money.


Role of the FSA

  • Alastair
  • 10/10/08 30/09/09
  • a depositor
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  • Tue, 28/10/2008 - 12:30

If the money was placed there under instruction or even guidance of the FSA then I don't think the UK Gov't can distance itself for our tranche of money in KSF UK.

Also the KSF IOM money in KSF UK can only be used by the UK Gov't to plug the gap if they take preference in administration over us, I've not seen any suggestion of this. There may be a dilution of our position but not fully subsumed.


Administrator Comments and Poor Judjement

  • grandian
  • 11/10/08 31/05/09
  • unspecified
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  • Tue, 28/10/2008 - 13:54

Yes, KandaA, I agree. What worries me is the public comments of the provisional administrator at PwC where he says that E&Y London made it clear to him that due to the court order their FIRST priority is dealing with the transfer to ING. Does that mean let's sort this ING stuff out and when this is done consider the IOM issue. This is of course conjecture as there are rules and regulations here, it's just the whole cloak and daggers in securing the court order from public scrutiny (no doubt under the provention of terrorism act!!) that worries me. If the UK can give the finger to Iceland, why not IOM too.

It is clear that UK Plc has made some poor judgement calls in this whole debacle. Gordy wants to be a hero (and he's doing ok on the world stage leading bank bail out policy). Last thing he wants is to admit to the world he was wrong and lose his popularity gains. Iceland is high profile right now.

It takes time for due process as we are experiencing. We really have until 27th November for something political to move. After that, KSF IOM is liquidated, we get a pittance and the only recourse is the courts, which takes forever and all will be forgotten.

I do hope that i am wrong.