Kaupthing Singer and Friedlander: Isle of Man

Treasury written question – answered on 26th February 2009.

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Photo of Andrew Slaughter Andrew Slaughter Labour, Ealing, Acton and Shepherd's Bush

To ask the Chancellor of the Exchequer what progress has been made in the Government's discussions with the Icelandic government on the status of British depositors with Kaupthing, Singer and Friedlander (Isle of Man).

Photo of Ian Pearson Ian Pearson Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform, Economic Secretary (Economic and Business), HM Treasury

Kaupthing Singer and Friedlander Isle of Man is a subsidiary of the Icelandic parent company, Kaupthing. Arrangements for depositors in banks in the Isle of Man are a matter for the Government of the Isle of Man. Deposits with Kaupthing, Singer and Friedlander Isle of Man, will be subject to the Isle of Man Deposit Compensation Scheme.

In line with usual constitutional arrangements, the Government will represent the Crown Dependencies in its negotiations with the Icelandic authorities. The focus of the negotiations is to ensure the fair and equitable treatment of creditors.

The IMF Stand-By Arrangement to Iceland, agreed on 19 November, includes Iceland's commitment to

"ensuring the fair and equitable treatment of depositors and creditors of the intervened banks".

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James Blake
Posted on 5 Mar 2009 4:11 am (Report this annotation)

It is now five months since the Treasury threw a large grenade into a group of over 5000 British Citizens.

Mr Pearson, most of these people had to use offshore banks as they could not get onshore ones with a UK address. This is the key point. The UK Government force people to use offshore banks if they do not have a UK address because of 2007 money laundering legislation. I am stunned that a UK Government can stand by and watch thousands of innocent British Citizens losing their lives due to something they themselves did. It just beggars belief.

James Blake
Posted on 31 Mar 2009 12:03 am (Report this annotation)

Now we hear that the Government have instructed the Liquidators to pay back 100% its friends, Dave Whelan and Stockcube Plc. The lies this Government is spinning (and opposition parties are letting them spin!) are just incredible.

This Government forced non-domiciled British Citizens to use offshore banks with defective 2007 money laundering legislation. Then it advised a triple A rated IoM bank (via the IoM Financial Requlators) to put most of its assets in a known-dodgy UK bank which it then forced into liquidation. Finally, it completely ignores the cries of anguish from ordinary British Citizens who have lost everything so that it can pay off its mates. Its appauling and made even more so by the opposition parties who are sitting back doing nothing in the hope that they can make political points if/when the media realise the extend of this catastrophy. The UK Parliament, as a whole, is indeed steeped in shame. And still the suffering continues.

Debbie Bradley
Posted on 31 Mar 2009 5:39 am (Report this annotation)

I received an email from a family friend concerning the Kaupthing Singer and Friedlander collapse on the Isle Of Man asking for help. He requested that i wrote to my MP asking for the government to release the 500 million pounds it is holding. In the email he described what had happened and he had had to open an Isle Of Man account because he could not open one in the UK.

A little sceptical at first i looked into the issue and frankly i am horrified at how the government has treated the people affected. It appears that the government did cause the Isle of Man bank to collapse when it forced the UK sister bank into liquidation. The government could have immediately paid back the 500 million to the isle of man, as it has done for other depositors in the UK bank it forced to close, but for some reason it hasn't.

I read some of the stories on the web site that has been setup for those affected (www.ksfiomdepositors.org) and some of them are terrible. Most of the people affected appear to be retired and were living off the interest from their savings in the bank. Some have now lost their homes and are in ill health, seems many are in despair and at least one man is living rough in Australia after losing everything.

There is no doubt that the government caused their bank to collapse. If these people really could not open a UK bank account because of laws the government made in 2007 then the government has a duty of care which it has failed.

I am now writing a letter to my MP about this but wanted to comment on here first after finding the site in a google search.

Derek James
Posted on 3 Apr 2009 2:21 am (Report this annotation)

This from the office of Kitty Ussher MP. Spot the references to the lies Ian Pearson told Parliament (Note also the hollow statement that the Uk Government is continuing to work for us; i dont think so!):-

You have raised a number of issues that the Minister has already made a statement on. Firstly there is no legal reason why non-domiciled people could not open bank accounts in the UK. As commercial organisations many commercial banks decided on a commercial basis not to offer the service as the norm but it was, and remains, legally possible. The UK Government is not responsible for those commercial decisions. Many banks would try and move people towards their off shore divisions if they were non-domiciled but that is a matter between the customer and the bank. The British Bankers Association is always willing to deal with banks on behalf of a customer who is non-domiciled but requires a UK Bank account and has a good reason for doing so.

Secondly the UK FSA acted in the best interests of the UK Financial system and for customers given protection under UK FSA guidelines. The UK FSA can not be held responsible for the poor commercial decisions made by the bank or the financial trouble that led to its collapse beyond its own remit. As I have previously said the UK government is continuing to work with other interested parties to try and secure the best possible deal for UK citizens that may have been affected by this very sad occurrence.

Ian Davison
Posted on 27 Jul 2009 3:45 pm (Report this annotation)

Once again Mr Pearson, no doubt trying to protect his job & very nice pension arrangements, replies with the standard HMG drivel. It is time for them to take responsibility for their actions - they caused the demise of KSF IOM.

Exactly what have they done to pressure the Icelandic Government regarding the parental guarantee (that the IOM accepted as valid).