Steve Thomas (expat) Says KSF depositors left out in cold at meeting

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2008-12-17 (All day)

KSF depositors left out in cold at meeting

SPEAKING OUT: KSF (IoM) action group spokesman Stephen Thomas

16 December 2008
DEPOSITORS of collapsed Kaupthing Singer & Friedlander (Isle of Man) may be the second biggest creditor of its sister bank in the UK, owed as much as £600 million.
But the block vote of the UK Treasury has ensured that they will not get representation on the creditors' committee.

The Island bank collapsed, owing £821 million to more than 8,000 customers, when KSF's London operation was placed into administration by the UK government.

A creditors' meeting of KSF (UK) was held on December 1 when administrators Ernst & Young confirmed that submitted and estimate future claims totalled £4.722bn.

The largest claim is from the UK Treasury's Financial Services Compensation Scheme, estimated at £3.5bn, while KSF (IoM) claimed £600m, the pension fund trustees £60m, the charities £47m, and local authorities 'tens of millions'.

But despite being the second largest creditor, the provisional liquidator of KSF (IoM) failed to secure representation on the creditors' committee after being outvoted.

The five places went instead to the FSCS and four other groups back by the UK Treasury – Transport for London, the trustees of the KSF Ltd Pension Fund, Peterborough City Council and an action group named Save Our Savings, led by Cats Protection and Naomi House Children's Hospice, which are owed £47m they had collectively invested in the bank.

Around half of the money tied up in the bank, some £2.6bn, was held in 170,000 online Kaupthing Edge accounts. UK Treasury rescued these accounts by transferring them to Dutch bank ING Direct, which took over the liability of those deposits while the FSCS, triggered when the bank went into administration, became KSF's largest creditor.

KSF (IoM) action group spokesman Stephen Thomas said: 'At the KSF (UK) liquidator hearing in London, KSF (IoM) was revealed as the second largest creditor with approximately £600m owing – yet failed to get representation on the KSF (UK) creditors' committee.'

John Spellman, of Isle of Man Finance, said: 'This doesn't materially affect anything as the rights of all depositors will be maintained on a pari passu basis, ie equally and without preference. But it would have been nice to have a place on the creditors' committee for information and to be able to drive through the process.'

Mr Thomas believes the order used to transfer accounts to ING prevents KSF (IoM) assets being returned without UK Treasury approval.

He is urging fellow depositors to write to their MP urging them to look at the matter again, given the 'pain and suffering inflicted on 8,000 British citizens by the wrongful seizure of their savings through this order'.

'The resolution of this crisis is of paramount importance to 8,000-plus honest and hard-working British savers who are not to be penalised so severely by the home government in the UK. The sensible solution is for the British Government to authorise the return of our money ( c£557 to c£600m) to the rightful control of the joint provisional liquidators for KSF (IoM).'

Mr Thomas said he welcomed the UK review of the Crown Dependencies which he said would allow the Manx Government to demonstrate its strong record of compliance with the highest global standards. But he added the review should not be 'an excuse for the British to keep c£557m to c£600m that belongs to its own citizens'.