Responsible Governance?

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
  • Offline
Posted: Wed, 25/03/2009 - 18:49

IoM lawyer, Jonathan Smalley has expressed his opinion in the Isle of Man news that an inquiry into the background of KSFIoM's failure is essential.

My comment to the Manx Herald:

Surely no depositor or Manx person could disagree with Jonathan's claim that an inquiry into the shameful KSFIoM fiasco is essential. Most depositors would not find fault with Angry Manxman's comments either. We are agreed that blame and culpability lies somewhere within the close confines of the FSC, the bank, and the Government. No one believes a word spoken by anyone in either the UK or IoM Government as they have lost the credibility to convey the truth.

Nonetheless, the facts remain unchanged: Ten thousand ordinary British retail savers entrusted their monies to an IoM based bank operating under the IoM's own regulator, the FSC. The FSC working with the bank's directors, elected to move the monies of these thousands of savers to an Icelandic bank located in London UK. The retail deposits belonging to these people were placed in that bank without any priority 'ring fencing', which effectively meant that ten thousand retail depositors life savings were 'downgraded' to wholesale deposits. This was done, according to the UK Treasury, on a commercial basis - i.e., by so placing the money without protection, the KSFIoM directors could gain a 'little' more profit on this deposit.

Not only was this done at a time when Icelandic banking institutions were under increased scrutiny, but the FSC and others have claimed that it was (is) common practise to 'upstream' monies to a parent company in this manner. Well, excuse me, but KSF UK was not a parent to the KSFIoM bank, and besides, given that it is common practise to exceed a 30 mph limit, no one could claim that because every one else exceeds the limit, they could be excused for knocking down a child whilst speeding along at 40 mph. Just because it may have been 'common practise' doesn't make it justifiable. You get away with these things until you get caught, and then you pay the consequences.

The Isle of Man FSC is trying very hard to play down it's responsibility in this financial fiasco, and the bank's directors have gone into hiding with nary a word. All are hoping that Bell and Co can carry off the con of the decade by deceiving the Deemster and kidding the victims that IoMG is doing its utmost with an SoA which is the 'best solution' for the depositors. The best solution for depositors and Manx people alike, is the return of that massive asset - representing ten thousand people's life savings - to the Isle of Man. It is a gross miscarriage of justice to allow ten thousand ordinary decent savers to suffer the loss of their life savings because of the colossal ineptitude of a few. The UK Government has done nothing but sit barefaced before the TSC meetings upholding its pompous position in which it is more than happy to let the depositors sink beneath the Irish Sea for all it cares. The FSC made an enormous and unforgivable error of judgment; they claim that moving the asset from Iceland to the UK was to protect it from Icelandic influence. No sane, diligent and responsible regulator would move the monies from one Icelandic bank to another under such a claim. It belies itself to say so; it is a contradictory statement; a preposterous inexactitude.

The Governments of the UK and the Isle of Man need to accept their joint responsibility in this affair; they are, between them, the only Governance the people of the British Isles have. The UK Government must understand its constitutional position; it is the final arbiter in the good governance of the whole of the British Isles and Islands. If one of its Crown Dependencies brings great disrepute upon itself of such financial magnitude it cannot bear alone, then it behoves the mainland Government to take every action necessary to bring unity and accord between the British peoples, not let them ferment amongst themselves for want of leadership and direction.

The UK Government instigated this scandal, it represented no opposition to the extreme foolhardiness of placing more than 50% of KSFIoM's assets in the UK bank, and offered the FSC no indication of the action it was intending to take. British regulators working to a different agenda, what sort of cooperation is that? Is this an example of compliance in spirit and deed with the Memorandum of Understanding? Of course not. What really goes on in the minds of those working in the Ministry of Justice? Ten thousand ordinary British people have been ignored and denigrated without cause. Perhaps depositors represent the legal facade of the IoM, perhaps there is other business going on there, but KSFIoM savers are taking the rap every which way, and that is not right; it's not clever; and it's not fair.


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