Kaupthing Singer and Friedlander

Treasury written question – answered on 30th June 2009.

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Photo of Mark Williams Mark Williams Shadow Minister (Innovation, Universities and Skills), Shadow Minister (Wales)

To ask the Chancellor of the Exchequer if he will establish an inquiry into the events leading to and following the failure of Kaupthing Singer and Friedlander (Isle of Man); and if he will make a statement.

Photo of Sarah McCarthy-Fry Sarah McCarthy-Fry Parliamentary Secretary, HM Treasury

Kaupthing Singer and Friedlander Isle of Man (KSF IOM) is not a subsidiary of KSF in the UK, but of the Icelandic parent company. Oversight of KSF IOM is the responsibility of the Isle of Man's Financial Supervision Commission and therefore the question of a review would be primarily a matter for the Isle of Man Government.

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Annotations

Angela Rigaut
Posted on 1 Jul 2009 11:31 am (Report this annotation)

As with previous Treasury responses to questions about KSFIOM, this reply avoids the real issue. Yes, the oversight of KSFIOM is the responsibiklity of the IOM FSC. BUT - and this is a very big but - the events leading to its failure undoubtedly began in the UK when KSFUK was put into administration with no warning to the FSC and apparently with no consideration of the effect this would have on its sister bank in the IOM and its hapless depositors. So an inquiry in the UK seems totally justified.

k siddall
Posted on 1 Jul 2009 12:10 pm (Report this annotation)

The Treasury is well aware that KSFIOM had moved 5OO+ million pounds of the banks assets to KSFUK.
Why did it not warn the IOM Regulator?
This is peoples hard earned life savings and money in charities.
The TSC meeting acknowledged that contrary to Alastair Darling appalling remarks re Islands in the Irish Sea the majority of depositors were British people ordinary savers who have no other resources to fall back on and are and have been for the last 8 months in dreadful situations.

The silence from the government is devastating .

Ian Davison
Posted on 1 Jul 2009 8:53 pm (Report this annotation)

The response is simply dismissive and ignores the fact that the demise of KSF IOM was triggered by HMG actions. The TSC concluded that there were regulatory failures by both the FSA and the FSC, and recommended that HMG work together with the IOM Government to resolve the issue. Mr Williams´ request for an inquiry is certainly appropriate in the circumstances and given the background surely this should be undertaken by HMG.

Michael Howarth
Posted on 1 Jul 2009 11:24 pm (Report this annotation)

Sarah McCarthy-Fry completely avoids the question... the "events leading to and following the failure of Kaupthing Singer and Friedlander (Isle of Man)" MOSTLY TOOK PLACE IN THE UK ! One could, and indeed should, go back as far as Tony Shearer the former MD of Singer & Friedlander advising the FSA that Kaupthing was not fit to take over Singer & Friedlander; the FSA ignored that advice and allowed Kaupthing to take over S&F...and look what happened !!..Further from March 2008 the FSA and IOM FSC together conspired to move £550M of KSFIOM deposits to KSFUK. Next Alistair Darling said that Iceland was refusing to honour its guarantees..no records can be found of any such statement..The following day KSFUK was put into administration using anti-terrorist legislation and SEALED COURT ORDERS and KSFUK Edge accounts were moved to ING a Dutch bank.KSFUK liquidators were given instructions that no funds could be moved from KSFUK back to KSFIOM thus freezing £550M of KSFIOM deposits and CAUSING the demise of KSFIOM...And Sarah Mccarthy-Fry thinks that this whole chain of events is somehow a matter for the IOM Government.....Words fail me.......! An independent inquiry into this whole debacle is long, long overdue, and I'm sure that some 10,000 KSFIOM depositors,who have been denied access to their own money for almost 9 months now, many in dire straits, would undoubtedly agree.

mike nolan
Posted on 1 Jul 2009 11:28 pm (Report this annotation)

Maybe Sarah could help unlocking or making visible to the UK public the signed petition (by 1167 people) to see the sealed court papers when HMT brought down KSF in October 2008.

http://petitions.number10.gov.uk/SealedUKsecrets/

This E-Petition had over 1167 signatures and closed on 16th April 2009, but as yet I have not heard any feedback or next steps from No.10


Quote from No.10 - E Petition team 2nd June 2009
=====================================================
Responses are provided by Government departments and depending on the issue, this can sometimes take time.

We are currently awaiting an official response on this matter and will publish this response as soon as we receive it. Should you wish to discuss this further, please contact the Prime Minister's Direct Communications Unit via the Downing Street switchboard on 0207 930 4433.

Lou Huckvale
Posted on 2 Jul 2009 7:01 am (Report this annotation)

It seems that the urge to 'type the trite' came to Ms McCarthy-Fry before she gave herself time to properly understand the question. The Treasury is so keen to distance itself from its role in instigating this sorry debacle that it rolls out this worn quip on every occasion that a concientious person seeks a comprehensive answer to this very serious situation.

The main thrust of Mark William's question relates to the events leading to the failure of KSFIoM. The bank did not fail of its own accord, its demise was a direct consequence of action brought about by Her Majesty's Government - primarily instigated by the Chancellor himself.

The Chancellor took the precaution of fully protecting UK Edge customers in the process of bringing down the Kaupthing UK branch of the bank, otherwise he would have had 170,000 UK savers rioting in the streets for the actions he took against Kaupthing UK. Had these savers been offered only basic compensation there would have been hell to pay for, but given their relieved position, Darling has not been subject to a barrage of questions from this sector. Conversley, it was quite 'OK' for Alistair Darling to callously disregard the consequential impact upon 11,000 savers in the IoM branch of the bank whose money had been placed in the UK bank for 'safe-keeping'. The Chancellor maintained this stance even after the event was brought to his attention. The asset was kept safe, not for the depositors, but for dividing up between all the unsecured creditors of the UK bank - the biggest creditor of which is the UK Treasury itself. This affair was clearly pre-orchestrated, how else would a foreign bank (ING) take on 170,000 private retail accounts valued at some £2.6 billion at two hours notice? 11,000 ordinary British savers have had their life-savings taken from them and demand to know why. We need to know the events LEADING up to this dreadful appropriation of assets from a fellow British jurisdiction. No more cover-ups, no more spin, and no more trite comments in reply please.

Nicholas Thompson
Posted on 2 Jul 2009 7:36 am (Report this annotation)

When will anybody in Westminster actually take responsibility? This modern culture of spin and no responsibility is at the core of public anger, whether it be KSF IOM, MPs expenses its all the same. The KSF UK action by the treasury triggered the collapse of KSFIOM, this is an undeniable fact. The same undeniable fact will be that all labour tenants in the treasury will be looking for a job in approximately 9 months time, and from those of us who have experienced your ineptitude I hope you have time to reflect, a very, very, long time to relect!

Nick Campling
Posted on 2 Jul 2009 7:50 am (Report this annotation)

As others have pointed out. This avoids the question!
It is absolutely established that the Treasury prepared for this event by setting up trust accounts at the Bank of England 2 weeks before and by preparing the deal with ING. In the case of Bradford and Bingley, the FSA shared information with the IoM FSC according to the Memorandum of Understanding between the two parties. In the case of KSF, they chose to withhold information. Result: misery for thousands of savers, mostly British. A Public Inquiry is essential.

john field
Posted on 2 Jul 2009 10:03 am (Report this annotation)

McCarthy-Fry's response, as with almost all replies to questions concerning the demise of KSF(IofMan)and the UK Treasury's involvement with it's demise, is unsatisfactory in that it does not answer the question! The UK Government, in the form of the Treasury and the Chancellor of the Exchequer, were the reason why KSF (IofM) went out of business - by freezing 550m of KSF(iof Man's) assets in the UK, the UK Government made sure that this institution could no longer continue as a deposit taker (no liquidity!). An impartial public inquiry needs to take place to find out why this happened and how mistakes made can be rectified.

Julienne Arden-Rose
Posted on 2 Jul 2009 10:30 am (Report this annotation)

Many others above have pointed out that the question has NOT been answered. The treasury MUST have something to hide by continuing to trot out the same old record of "it is the responsibility of the Isle of man Government." When will they face up to their responsibility that it was the Treasury and the Chancellor that caused the demise of KSF (IOM) they did so by actions that we can only guess at right now - therefore we NEED a public inquiry to get the answers that thousands of depositors are searching for.
What we do know is the Chancellor froze the assets of KSF UK where KSF IOM had placed a massive deposit of £550m. Why did this happen?- as yet we don't know - we NEED an inquiry - why has no other MP taken up this question? - I wrote to mine who has not done me the courtesy of a reply!! Who is hiding what. There are thousands of us out there in the world now whose lives have been ruined by the act of the Chancellor on October 7th 2009 - we need answers.

Roger Clarke
Posted on 2 Jul 2009 10:32 am (Report this annotation)

The main thrust of Mark William's question relates to the events leading to the failure of KSFIoM. The bank did not fail of its own accord, its demise was a direct consequence of action brought about by Her Majesty's Government - primarily instigated by the Chancellor himself.

The Chancellor took the precaution of fully protecting UK Edge customers in the process of bringing down the Kaupthing UK branch of the bank, otherwise he would have had 170,000 UK savers rioting in the streets for the actions he took against Kaupthing UK. Had these savers been offered only basic compensation there would have been hell to pay, but given their relieved position, Darling has not been subject to a barrage of questions from this sector.

Conversley, it was quite 'OK' for Alistair Darling to callously disregard the consequential impact upon 11,000 savers in the IoM branch of the bank whose money had been placed in the UK bank for 'safe-keeping'. The Chancellor maintained this stance even after the event was brought to his attention. The asset was kept safe, not for the depositors, but for dividing up between all the unsecured creditors of the UK bank - the biggest creditor of which is the UK Treasury itself.

This affair was clearly pre-orchestrated, how else would a foreign bank (ING) take on 170,000 private retail accounts valued at some £2.6 billion at two hours notice? 11,000 ordinary British savers have had their life-savings taken from them and demand to know why. We need to know the events LEADING up to this dreadful appropriation of assets from a fellow British jurisdiction. No more cover-ups, no more spin, and no more trite comments in reply please.

Fully endorse the comments in this annotation

steve servaes
Posted on 2 Jul 2009 12:14 pm (Report this annotation)

It is abundantly clear that (and I am assuming this was to forestall any action by the Icelandic government to counter-act Mr Darling's Landesbanki actions - ie freezing Icelandic assets) Mr Darling, well in advance of 8 October 2008, had put in place a plan to (i) transfer UK savers to ING (ii) capture all KSFUK monies in a pot to compensate himself for (i); (iii) set aside all usual FSA/FSC reporting requirements so that the pot held the money of innocent KSFIOM savers, whose money would otherwise been repatriated to IOM and safety. Instead, it is seized to repay the public purse. HMG then control the KSFUK administration by ousting KSFIOM from its expected seat on the creditors committee - putting in Cats Homes with a ha'penny at stake. We demand a public enquiry now - or else it seems the principle is to be accepted that HMG can just seize individual property at will, however Mr Darling likes to dress it up. Next time - focus the question on KSFUK : will the HMG now unseal the order for its administration; explain why it was necessary to take the steps that were taken; explain when the policy was put in place; explain when it was decided to set aside FSC/FSA reporting practices; explain why HMG ousted KSFIOM (secnd biggest creditor) from KSFUK creditors committee. Ms. Fry - do you value fairness, transparency and justice - as Gordon requires - or are these nothing to you, unless for your personal benefit?

Neil Redpath
Posted on 2 Jul 2009 12:34 pm (Report this annotation)

How much longer are we going to be just brushed off like a spec of dirt by the treasury and my government? Sarah McCarthy-Fry is trotting out the same old generic claptrap told for the last 8-9 months to depositors who still do not have THEIR OWN money available to them. Details of what happened are sufficiently given above in other comments. It is time for MPs to act and put this right for the people. Alistair Darling does have responsibility for this situation. The MoJ hearings at the various treasury select committees have suggested resolution but appear to lack the teeth or motivation to carry it through. It's time for a public enquiry in to this and it's time NOW!

Lou Huckvale
Posted on 2 Jul 2009 1:04 pm (Report this annotation)

Why did Her Majesty's Government (together with the Dutch) turn down an Icelandic request for financial assistance long before this sorry shambles started, but were extraordinarily keen to use a power within the Anti Terrorism Crime and Security Act against our Northern neighbour? So keen in fact, that they enacted the power without even telling Parliament beforehand...

What was intended by acting in such an uncivilised, uncouth and patronising manner? Was there some jingoistic hope that the British public would take up the patriotic banner and fall in behind HMG's chest-beating approach to democracy? Or would it stir them into pulling all their assets from Icelandic institutions as quickly as possible?

Gordon Brown and Alistair Darling were extremely vocal in their public denouncements of Iceland, but not nearly so loud or public in retracting those statements - a simple letter sent instead far too late to 'reassure' Iceland that only Landsbanki had been frozen - not all Icelandic assets as so many continued to believe.

The FSA were unable to place Landsbanki under administration as it did not fall within their remit (being regulated as it was by the Icelandic FME)so Darling's plan used instead the 2001 Act to freeze assets in that bank. Within a couple of hours he also had Kaupthing and Heritabl under FSA administration with sealed Court Orders readily drawn up. The most amazing movement of 170,000 retail deposits magically transmuted into ING accounts complete with on-line access all enacted within hours and supported by £2.6 billion from the Chancellor's Treasury. Mr Darling and Lord Turner must have worked very hard together to achieve this act of sorcery. When do the 11,000 duped depositors in KSFIoM get to know how the trick was done?

steve servaes
Posted on 2 Jul 2009 2:09 pm (Report this annotation)

From figures announced in the IOM today, it might only need input of about 80 million from the UK government to right the awful wrong it did to IOM depositors, which could be loaned to the IOM Govt, or directly invested, to put KSFIOM back in business. The IOM Government seems to be prepared to shoulder most of the loss. The Select Committee recommended the two governments work together to solve the problem. Will Labour honour that recommendation? They have had the benefit of the action they took - now, after all the pain and misery this caused the innocent, surely it is time for them to shoulder this burden??

adrienne liebenberg
Posted on 2 Jul 2009 2:29 pm

This annotation has been removed

ivan pring
Posted on 2 Jul 2009 4:03 pm (Report this annotation)

Ms Fry is but a mouthpiece for part of our government that is not prepared to face the truth about the harm her organisation and her masters have done. She, like Alistair Darling and Adair Turner, has personal responsibility, because she chooses to put her name to an answer that is a travesty of the truth, for having destroyed the finances and lives of thousands of their fellow citizens.But how does one force civil servants and politicians to face up to and accept their personal responsibilities?
As the months go by there is a steadily increasing sense of anger and frustration mounting.Should we not expect our government and its officials to tell the truth? And to right the wrongs they do? Their constant dissimulation is what destroys patriotism and democracy in the end.By her words Ms Fry demeans not only herself but also the country she is paid to serve.
I hope she can live with that thought.
Ivan Pring

adrienne liebenberg
Posted on 2 Jul 2009 4:14 pm

This annotation has been removed

adrienne liebenberg
Posted on 2 Jul 2009 4:15 pm (Report this annotation)

What a disgraceful answer when so many lives around the world have been shattered by the British government, without so much as a glance backward. Like the good old colonial days isnt it. My family is NOT British, but the British government took it upon themselves to collapse our bank in the Isle of Man, which was supposedly safer than other banks (in Africa), and ruin the lives of citizens from all over the world. Our lifesavings are now gone and our family struggling to keep afloat. And the British government dusts its hands and says it has nothing to do with this debacle!
1. with no option to open an account in england, for years we were banking with a reputable british branded building society in the isle of man which was the safest place we could think of keeping our money. Derbyshire was then sold to a disreputable icelandic bank a year ago with approval from the FSC. At the point of sale, all we were told is that our building society had been sold to a 'northern european bank'. A little misleading perhaps? Similarly, DESPITE being advised against it, the UK FSA allowed the Singer Friedlander sale to kaupthing to happen. Nothing to do with the UK of course!!!
2. I have to repeat Michaeals comments above .. from March 2008 - the FSA and IOM FSC together conspired to move £550M of KSFIOM deposits to KSFUK. Next Alistair Darling said that Iceland was refusing to honour its guarantees..no records can be found of any such statement..The following day KSFUK was put into administration using anti-terrorist legislation and SEALED COURT ORDERS and KSFUK Edge accounts were moved to ING a Dutch bank.KSFUK liquidators were given instructions that no funds could be moved from KSFUK back to KSFIOM thus freezing £550M of KSFIOM deposits and CAUSING the demise of KSFIOM. Again, nought to do with the UK?...
3. The FSA had a responsibility towards the isle of Man FSC to advise them ahead of any bank collapse, which indeed they did for bradford, but, oops somehow forgot when Icelandic banks went into administration in the UK, miraculously with hundreds of milliions of our retail deposits neatly caught up to be fed to the british retail depositors, and we can now stand in line for half our money. Nothing to do with the UK of course.
4. When the TSC duly held an inquiry into this mess, they advised that the British government and the IOM government should work together to resolve the situation for us. Exactly what has been done to date on this advice by the UK govmt? Nothing for the UK to do here
5. The IOM is a crown dependency and as such relies on the UK to deal with foreign issues. Well the UK collapsed the Icelandic banks all over the world, and now has to act on behalf of the IOM to work with Iceland to secure our parent guarantee which we had in place. Again, OBVIOUSLY nothing to do with the UK.

...And Sarah Mccarthy-Fry thinks that this whole chain of events is somehow a matter for the IOM Government.

Sandra Emery
Posted on 2 Jul 2009 5:55 pm (Report this annotation)

NOBODY who saw the response/reaction by Mr Spellman of the FSC (IOM) when interviewed by the TSC in respect of communication (or rather lack of) between the FSA and FSC, would be in any doubt whatsoever as to who he thought was to blame for this disaster which had deprived thousands of innocent depositors of their savings. When will HMG own up to it, get together with the IOM (as suggested by the TSC) and DO SOMETHING ABOUT IT. This may be a political situation between governments, but in the meantime we are having to live in the real world, with real problems to surmount, through not fault of our own. The silence from HMG is deafening and speaks for itself.

Ian Chapman
Posted on 2 Jul 2009 6:14 pm (Report this annotation)

Ms McCarthy Fry simply skimps over the fact that the failure of KSFIOM was initiated by the actions of the UK government - indeed by her own boss (believe it or not). How could IOMG have prevented such actions? The political trick of pointing the finger at others to hide one's own failures has become tiresome - who does she think she is kidding?

Susan Morley
Posted on 2 Jul 2009 7:15 pm (Report this annotation)

Susan Morley

The collapse of KSFIOM has affected so many lives across the world. so many of the depositors have written and pleaded with so many politicians for something to be done to help the situation which was triggered by HMG, the IOMG has drawn out the situation for over 8 months and refuses ( or appears to )to deal with HMG, the IOM courts let the costs of the Scheme of Arragnement escalate. All because the FSC allowed money to be transferred into the UK and the UK government froze the funds. The poor ill informed respose of this MP shows that noone wants to see the matter resolved satisfactorily as they may 'loose face'
Why can the governments continue with their blame cultures and let this situation continue when innocent savers have lost access to their hard earned savings?
Perhaps the treasury of both governments should get together in order to resolve the matter quickly and then look to see where the blame lays - when their funds are being used they may make some headway!

L Jim
Posted on 2 Jul 2009 7:31 pm (Report this annotation)

Sarah McCarthy-Fry says: "Oversight of KSF IOM is the responsibility of the Isle of Man's Financial Supervision Commission and therefore the question of a review would be primarily a matter for the Isle of Man Government."

Sarah dodged the issue reading from the standard script issued by the MoJ & Treasury. HMG can not dodge the KSFIOM debacle by making such a trite statement.

The g20 made it abundantly clear that regulatory failure within and between regulators was a major contributory factor in the international financial crisis. The Prime Minister underscored this saying that the global dimension of regulation was such that internationally regulators should be working to the same rule book & that information on crucial issues should be shared freely between them.

It was the failure of the FSA to follow the Memorandum of Understanding between the FSA & FSC that compounded the failure of the directors & FSC to safeguard over 50% of KSFIOM assets transferred unsecured to KFSUK, knowing as they did that if the Icelandic parent bank failed it would take its sister banks with it.

Sam Halewood
Posted on 2 Jul 2009 8:21 pm (Report this annotation)

Gordon Brown said that every jurisdiction should vouchsave depositor's money, well Sarah McCarthy-Fry, this jurisdiction is right on your doorstep, in fact, as a UK Crown Dependency HMG has ultimate control of it.

Even the TSC, after great cost to the UK tax payer in its investigation into the banking crisis recommended IOM and HMG should work together to find a solution to this problem.

There is only one reason why the Treasury keeps dodging this question and only a public inquiry will find the truth behind this whole debacle.

Glen Smith
Posted on 3 Jul 2009 12:37 am (Report this annotation)

Why does the Treasury, made up of people answerable to the people who elected them, refuse to accurately answer the question posed to them about the KSFIOM debacle? To pinpoint blame on another institution, because it is involved in an incident, does not exclude them from their partial responsibility. There is no doubt that the IOM FSC made an oversight, moving depositors' funds to KSFUK but the Treasury and government, in the UK, put into effect the events which caused KSFUK to be put into administration without considering the consequences to its subsidiary bank, in the IOM. This HAS affected UK resident, tax-paying residents and British citizens and as such, should be given the deserved consideration of an inquiry, in the UK, into this matter. If the government wants unified decisions and jurisdictions between countries' treasuries, then start by unifying within its own boundaries which includes the IOM!

Nigel Smith
Posted on 3 Jul 2009 12:38 am (Report this annotation)

As the UK Government is meant to represent the IOM Government in external affairs, rather than passing the buck like Sarah McCarthy-Fry does, she should actually do something for which she is being paid for.

Trite answers will only offend those who have been seriously financially compromised by the actions of this Government - and just saying it isn't their problem offends the large amount of UK Citizens caught up in this action.

For once, take responsibility for your own actions as a government and sort this out - it isn't difficult to do.

Clifford Kay
Posted on 3 Jul 2009 1:26 am (Report this annotation)

Sarah, presumably you are an altruistic person, you became an MP to help people and make a 'difference' and it must be hurtful in this present cynical climate around the 'expenses scandal'to be seen as unhelpful and uncaring. The TSC asked that the respective IOM and HM Governments work together to help us innocent savers, yet no-one is talking, only blaming..the 'It's his fault..'no-win tendency.

Meanwhile British citizens, honest, hard-working British citizens, many in their retirement are bewildered and terrified of the future.

Sarah, do you believe that 'Right' is being done here?..could more be done and can you make the 'difference' you set out to do?

Angela Rigaut
Posted on 3 Jul 2009 3:17 am (Report this annotation)

Mark Williams is to be congratulated for asking this question. He and the thousands of KSFIOM depositors deprived of access to their hard-earned saving for the last 9 months as a direct result of actions of the British government deserve better than to be fobbed off with the same old dissimulating Treasury spin. I trust he will not give up so easily; the depositors certainly won't.

As all the comments above and those that will surely follow bear witness, the depositors know a great deal and suspect a great deal more of the events in the UK leading to and following the collapse of their bank on that fateful day last October. Have no doubt, Sarah: they will not go away. Sustained by their growing and justifiable anger at the callous indifference shown towards them by your Government, they will pursue this issue relentlessly until they are heard, listened to and answered.

Only a fully independent Public Inquiry will allow the real truth behind this debacle to be brought to light. I submit to you that, whatever the contributory and subsidiary role of the Isle of Man, such an Inquiry is primarily a matter for the United Kingdom. I hope you have the courage and the personal integrity to recognise this, and to stand up and be counted in the name of common decency and justice.

Louisa Kay
Posted on 3 Jul 2009 5:33 am (Report this annotation)

As one of the thousands of honest, hard-working citizens affected by this shameful chain of events, and as a retiree with (now) no home and no money, and facing, yes, a very frightening and uncertain future, I fully endorse the points, arguments and comments made by those above. The response by Sarah McCarthy-Fry to Mark Williams is not an answer to the question. It is wholly unsatisfactory. The immediate return of all (100%) of our funds and an immediate independent public enquiry would seem to be the very least that is required.

Kevin Gallagher
Posted on 3 Jul 2009 6:53 am (Report this annotation)

As a charity worker in Taiwan but a UK citizen, I now have most of my life savings, (for future retirement) frozen somewhere by HMG. Being non-resident I am locked out of opening UK accounts but as a conservative saver I choose the Derbyshire building society (IOM) believing in the safety of traditional and well known Building Society. After the Derbyshire IOM sold out to Kaupthing IOM, I decided to leave my funds there, trusting in the regulatory bodies and affirming statements regarding the sale. The rest is history.

Now 9 months later I am sick of the hand washing statements of Ms. McCarthy-Fry and others. HMG tells us its a matter for the IOMG. Then IOMG tell us it was HMG that froze the funds that were deposited (incompetently) in the UK. And the innocent depositors get bounced between the two seeing their funds diminishing by the day as liquidators, layers and even IOMG take their cuts.

There was hope in the latest TSC meeting with a sympathetic John McFall asking the two sides, HMG and IOMG, to work together to solve this problem. I would like to know what action has been taken to date by the two governments in this regard, the same governments that I and 10,000 others trusted with their savings and who never believed would treat us so cynically, especially when one realises the problem is due to their own incompetence.

So Ms. McCarthy-Fry, I ask you, in light of the TSC recommendations, to think again and try to empathise and do something to rectify the injustice inflicted on 10,000 innocent depositors rather than just a glib "nothing to do with me" statement.

Susan Shore
Posted on 3 Jul 2009 9:07 am (Report this annotation)

Ms McCarthy-Fry might want to review Kaupthing IOM situation in detail before posing such trite remarks. Over the past 9 months, depositors in this failed bank have become accustomed to the Treasury, FSC, PM etc etc either ignoring the situation completely, or simply passing the blame onto the nearest scapegoat. The lives of my retired parents are now in total shambles. They have worked for over 50 yrs, filled up the Treasury's coffers with hundreds and thousands of GBP in tax contribution, only to have their entire life savings taken away from them by the reckless, and extremely calculated actions of the UK Treasury headed by none other than Mr Darling. It is an absolute disgrace that one's own government will neither admit nor rectify its errors. Kaupthing Isle of Man was not a distressed bank, it was simply rendered insolvent by the actions of the FSC and Mr Darling.

Lou Huckvale
Posted on 3 Jul 2009 9:11 am (Report this annotation)

Dear Mr Williams,

Just to say a warm thank you for posing the question to the UK Treasury regarding the events leading up to the demise of Kaupthing Singer and Friedlander Isle of Man. (KSFIoM). I am one of the 11,400 depositors caught up in this shameful episode having opened an account with the Derbyshire Building Society (DBS) some sixteen years ago when I first went to work overseas. In that time I have had three life endowment policies mature and these sums were paid into the DBS adding to 16 years of careful saving. My deposit stands at £395,000 + and at 58 years I cannot earn this back - I shouldn't have to and neither should any other saver who has been ruined in this way.

The reply given by Sarah McCarthy-Fry did not answer your question in any meaningful way, she just trotted out the same stale statement that the Treasury has concocted for public consumption; it doesn't provide an explicit explanation, but merely brings the exchange to a full stop by pointing the finger of blame elsewhere.

When will this Government own their responsibility in this sad and sorry saga? The Treasury would have been fully entitled to have kept the £550 million IoM asset for general distribution in the UK administration if it had underwritten the IoM savers monies 100% - but it did no such thing and morally relinquished its right to hold that money under the Transfer Order from that moment. It was told that the asset represented the savings of 10,000 plus retail depositors, but it could not have cared less. It has shown itself to be spiteful and vindictive without giving just cause save only to wrongfully accuse people of being tax dodgers. This alone is a despicable slur upon ordinary working people who have tried so hard to take care of their future only to have it taken away from them in such an underhanded, uncaring and cavalier fashion.

This UK Government has misappropriated monies belonging to its own citizens and other British subjects; people it is sworn to protect and defend, yet it is failing us miserably with its weak and pathetic attempts to distance itself from the calamitous effect of its ill-considered actions upon a sector of Great Britain.

You will see from the 'annotations' given in reply to Ms McCarthy's 'answer' on the "They Work for You" website that much interest has already been generated by your question and that the depositors will continue to fight for their property at every opportunity.

Thank you again for your time and consideration.

Ann Barraclough
Posted on 3 Jul 2009 10:30 am (Report this annotation)

The British government has not acted with honour in respect to the collapse of KSFIOM. It is time it recognised its obligations. The actions of the British government played a pivotal role in bringing down the bank where many BRITISH CITIZENS had deposited their life savings. Shame on them.

Lou Huckvale
Posted on 3 Jul 2009 12:16 pm (Report this annotation)

Which is more reprehensible: to participate in 'flipping' and thereby making false claims on the public purse (whilst deriding others as 'tax dodgers') or to deposit monies in the Isle of Man without obligation to pay tax on the interest as a non-resident? Clue: "Believe it or not" one is lawful tax avoidance and the other is obtaining money under false pretences.

D H
Posted on 3 Jul 2009 12:43 pm (Report this annotation)

This response avoids the issue - what a disgrace! When is this government going to do the honourable thing? I can’t add more fact to the many responses already sent below, but would like to remind you of the human element. Many thousands of ordinary honest people have been robbed of their life savings, many of them elderly and without time for a long battle to get it back; my own family’s life is now very fragile, my young children robbed of our life savings, the security we saved so hard to provide for them. We have always worked, always paid our taxes, never claimed benefits, always been self-sufficient, never intended relying on the state; thought our money was sensibly saved in the Derbyshire IoM for an eventual return to the UK. Look what good that did us - all lost to a bunch of thieves. Rest assured we will not let this drop, we will not go away, and (as with the MP’s expenses scandal) this will not stay buried.

Angela Rigaut
Posted on 3 Jul 2009 6:08 pm (Report this annotation)

Wise words from a politician of a past era:

"It is not what a lawyer tells me I MAY do;
but what humanity, reason and justice tell me I OUGHT to do."
Edmund Burke (1729-1797)

How about it Mr Brown? Is the British sense of justice dead and buried?

Susan Griffiths
Posted on 4 Jul 2009 8:18 am (Report this annotation)

HMG is the thief here - holding on to 500m of KSF IOM money. Whilst most of the MP's are busy returning stolen money from the taxpayers, they should return KSF IOM money.

Tony Cavanna
Posted on 6 Jul 2009 11:04 am (Report this annotation)

The Isle of Man might be the regulating authority but they did not seize 500m pounds of savers' money on the 8th of October. Her Majesty's Government did using using the justification "The Icelandic government believe it or not, have told me yesterday they have no intention of honouring their obligations here." uttered by Alistair Darling, contrary evidence supplied by his own department, HM Treasury. With one fell swoop he deprives thousands of savers with Kaupthing IOM and Landsbanki Gurnsey of their property. Mr Darling further shows his utter contempt for those he has wronged by leaving it to his disgraceful lackeys to attempt to fob us off.

The man ultimately in charge, Gordon Brown has uttered many pieties about looking after savers but all we've had is really just empty words.

The politicians involved seem to have learned nothing from the expenses scandal. The disgraceful truth will eventually find its way to the public domain.

lesley steer
Posted on 6 Jul 2009 2:12 pm (Report this annotation)

This is such a typically disapointing and trite answer that shows an absence of understanding of the circumstances surrounding the collapse of KSF IOM. This was a solvent back until the UK authorities acted against KSF UK thus freezing 500M pounds of KSF IOM depositors money and bringing the bank to its knees. It is disingenuous to suggest that the UK authorities have no part to play here: they could put this right by agreeing to restore these funds to their rightful owners. At the very least, the UK Treasury has a moral obligation to acknowledge the impact of its actionson 11,000 innocent depositors.

Reg Wilson
Posted on 6 Jul 2009 7:00 pm (Report this annotation)

I had all my savings and the proceeds of the sale of my home deposited in KSF (IoM). From a close examination of events and actions that have taken place since September / October 2008, I have no doubt the British government is culpable in the bank's demise.
I no longer have a home nor sufficient money to live on and have to rely on friends and family for accommodation.
I no longer have any respect for the UK government.
I used to be proud being British and being associated with what was known as the common decency of the British government and its people. Now I feel ashamed and belittled by my own. Shame on you.

John Gray
Posted on 6 Jul 2009 8:20 pm (Report this annotation)

I do not wish to repeat any of the detailed comments made by the other subscribers on this site in response to the pathetic explanation given by Sarah McCarthy-Fry to this dreadful regulatory banking failure but instead I would just like to add the following. No one can deny that the UK government’s actions on 8th October 2008 triggered the collapse of KSFIOM. The Prime Minister along with the Chancellor of the Exchequer seem to be proud of the fact that following the collapse of the Icelandic banks, British citizens savings in Icelandic banks have been fully protected by the UK government. This is far from the truth as there are thousands of British citizens that have lost their life savings in the KSFIOM debacle. I have always believed that I have been fortunate to have lived in a country where justice prevails. This is a sorry state of affairs and should the UK government continue to sidestep this political issue and blame it all on the Isle of Man and refuse to hold a Public Inquiry then I might as well accept that justice is just a game in the UK.

george ARISTIDOU
Posted on 6 Jul 2009 11:05 pm (Report this annotation)

The british Government has a legal and moral obligation to protect me as Britsh born national against foriegn Governments,and constitutionally act for the Isle of Man in Foriegn affairs.Deposits were 100% guaranteed by Kaupthing Iceland,now nationalised so now the sole responsibility of Icelandic Government to uphold.IMF loan to Iceland was conditional upon all personal deposits held in Icelandic banks being repaid in full.My Government must therefore act on my behalf (I am personal depositor in KSF IOM) and enforce the IMF terms of the loan to Iceland and ensure Iceland upholds the 100% guarantee.Negotiatons with Icland and UK concluded 5th June ,there has still been no indication that these included depositors with KSF IOM.MY government is duty bound to protect me.

george ARISTIDOU
Posted on 6 Jul 2009 11:35 pm (Report this annotation)

After recent fiasco over MP's expenses,the concensus of all politicians is that they must listen to the people.We have SHOUTED about our unfair treatment as savers with KSF IOM,and that we are among a hanful of British savers who have lost our savings and NO ONE CARES !The Government is not listening nor interested in resolving our plight and seeking a political solution on our behalf with Iceland and IOM governments that will return 100% of our hard earnt money.We are victims of a world wide banking crisis of epic proportions,this is not our fault but the total failure of governments and regulators to have allowed this,so governments must resolve this for all,that includes the minority groups such as depositors with KSF IOM.
I have voted all my life and held faith in our Parliament, but unless the government now listens and urgently finds a political solution which returns all personal depositors money in KSF IOM in full,I like many will never vote again as it is a waste of time.
If parliament wants individuals to take part in the democratic system,that system must be seen to work for the individual.

Harry Griffiths
Posted on 7 Jul 2009 3:43 am (Report this annotation)

Why do Departments and Ministers continue to insult the intelligence of the community by trotting out pat answers that fail to reflect the whole question?
A significant element in the precipitation of the ksfiom debacle was the action of HM Treasury in October 08. Among the aspects deserving of closer scrutiny are 1)the timing of enacting powers within anti-terrorism legislation (and indeed whether such was proper use of that legislation), 2)sealed orders, details of which have still not been revealed, causing informed comment at the time that such action was unprecedented.
Since then Mr Darling appears to have exhibited 'creative recall' when reporting a conversation with his Icelandic counterpart and we have seen a large depositor receive his funds in full through the action of his MP with the rationale that it would protect jobs.
In short there are far too many irregularities about this whole sorry affair for a neutral observer to remain unconcerned. Imagine then the feelings of some 10,000 depositors (not investors) to see their savings and lives treated in the most cavalier of manners.
I'm sure Ms McCarthy-Fry will have made many a rousing speech when electioneering and listed the many things she would put right if elected. This is her chance. A full public inquiry should air all the issues and show that, while there may be a number of contributing factors, HM Treasury was not without fault.
The Government is surely sunk anyway come the next election. Pushing for an inquiry may at least gain some individual integrity going forward.
Thank you in anticipation of genuine consideration.

David Harvey
Posted on 7 Jul 2009 9:36 am (Report this annotation)

This response is again passing the buck. The Uk Government due to their actions caused the demise of KSFIOM and in doing so decimated my SIPP pension fund, as a UK resident and Taxpayer i was directed to the IOM branch of this bank because of the UK pension rules requiring money deposits to be via trust accounts managed by an actuary company, I tried to invest with the UK arm of the bank but they did not deal with such accounts and was directed to KSF IOM,therefore i consider the UK government should have stepped in and taken some responsibility whether indirectly for the their hand in this sorry saga, which has affected many peoples lives.

Paul Lucas
Posted on 7 Jul 2009 1:30 pm (Report this annotation)

Typical response since day 1. In complete denial and happy to have contributed to rob 10,000 British citizens of their life savings. A significant proportion of them are expatriates who had no choice but banking offshore. Get your acts together, Labour, election day is fast approaching and those 10,000 voters will then recap on what you did for us before making their choice.

steve servaes
Posted on 7 Jul 2009 4:58 pm (Report this annotation)

Dear Madam (if you read this)
If the Courts decide - after Friday's judicial review - that Mr Darling's actions were not lawful, are you going to stand up and fight for a sincere apology and repatriation of the British savers' savings taken by Mr Darling to pay himself back for what he had to pay out to his UK voters? Just think - if you do, some of us might vote for you one day. You can ride the gravy train some more with the rest of the gang.

Simon Speers
Posted on 7 Jul 2009 6:36 pm (Report this annotation)

No this does not answer the question - It seems to me that the UK Government deliberately waited until over £800m of funds were transfered (and very strangely NOT ring fenced as would be the norm in these circumstances) into KSF UK - before they froze the assets of KSF UK. This therefore in effect robbing from Peter (KSF IoM - many of whoes depositors were British citizens working abroad) to Pay Paul (KSF UK retail depositors) & then hide behind the fact that the IoM is an independent financial authority - DESPITE it being a Crown dependency where the financial interests of the IoM are to be defended internationally by the UK government.

Simply - the UK government can hide behind their underhand manouvers that have stolen millions from many of their own citizens AND County Councils / Charities - to help them bail out a failing UK banking system that was supposed to be regulated by the UK's Financils Services Authority (FSA).

It simply does not make sense - the UK government is totally responsible for the collapse of KSF IoM by freezing the transfered funds of KSF IoM depositors almost as soon as the money arrived into the KSF bank in London. All of the information behind their underhand manouvers is clouded in secrecy by 'sealed orders' that no one outside of the inner circle of Government can get too. It is never right.

Why is the Serious Fraud Squad not looking into this?

Colin May
Posted on 8 Jul 2009 4:14 am (Report this annotation)

Clearly that "answer" is ducking the question and an abrogation by HMG of any moral imperative to take responsibility for its action. That KSF IOM, one of the world's most liquid banks, was compromised, in a seemingly reckless fashion, by HMG's actions in the UK has been illustrated fully in the above posts and is clearly a matter for public scrutiny.

I would also add the issue of HMG's seeming lack of concern over the jobs it's actions have compromised in a Crown Dependency. These jobs could have been safeguarded had HMG made some effort to save KSF IOM as a going concern as opposed to concentrating entirely on bolstering the business of ING in The Netherlands.

Questions should also be asked as to why the Chancellor and the Prime Minister were so reluctant to admit that their actions might have had some negative consequences, (as one would expect of precipitive measures however well-meaning), that needed to be addressed promptly out of fairness and humanity. Instead, they seem to prefer innuendo about savers and tax havens that slanders and discredits the victims of those unintended consequences.

Furthermore, there are many aspects of the handling of KSF UK itself that demand investigation, including, but not limited to:

1) HMG garnering widesweeping general powers through poorly debated legislation in response to the issue of Northern Rock when surely an emergency debate should best be limited to powers specific to the immediate problem.

2) Misuse of anti-terrorism legislation that was enacted reluctantly and soley as a protection from unusual dangers completely unrelated to banking.

3) The total abandonment, through the above, of the long standing principle that the primary objective in an insolvency should be to preserve the company as a going concern, which, amongst other benefits, preserves value and jobs.

4) The dismemberment of a company that was not yet insolvent and the consquent insolvency of other companies, such as KSF IOM.

5) The liklihood of KSF UK actually becoming insolvent.

6) The use and content of sealed papers and any consequences for the transparency and fairness of the liquidation of KSF UK.

7) The prevention of KSF IOM, KSF UK's largest creditor after the Treasury, sitting on the Creditors Committee.

steve servaes
Posted on 8 Jul 2009 5:34 pm (Report this annotation)

I was interested to see in a communication from Ministry of Justice, that the Treasury are going to write to Iceland asking for assurances that the administrations of the defunct Icelandic banks be done transparently and fairly. Is the UK government going to carry on this double-standard indefinitely? When will we have the inquiry? When will we have justice from this government?

Keith Munro
Posted on 9 Jul 2009 10:26 pm (Report this annotation)

This most certainly does not answer the question and is a flagrant avoidance of the real issue. While it is indeed the FSC which oversaw KSFIOM, it was actions in the UK that triggered the failure.

I would ask why the Treasury allowed KSFIOM to transfer over £500M of depositors' savings to KSFUK without the normal channels of communication operating between the UK and IoM as happened with Bradford and Bingley? Also why were the court papers relating to this sorry affair sealed?

The Treasury Select Committee, a credible body of men and women, concluded that the UK Government should work with the IoM to resolve the situation. Simply passing the buck back to the IoM does not help savers regain their money, the IoM regain their reputation and the UK regain their honour. Does Sarah McCarthy-Fry believe the TSC are misguided?

The UK Government should hang its head in shame over this. Triggering it is one thing but not helping to sort its own mess out is deplorable.

Chris Dicker
Posted on 13 Jul 2009 10:22 am (Report this annotation)

Clearly not answering the question or even understanding the question and using the stock answer and hoping it will go away. SORRY NO CHANCE OF THAT. Where is the much needed inquiry?

Angela Rigaut
Posted on 13 Jul 2009 3:44 pm (Report this annotation)

It seems that depositors are not alone in believing that HMG bear a large part of responsibility for their plight. Here is an extract from an editorial published on 9 July in "Shelter Offshore" - a magazine for expatriate professionals:

"There's no point in beating about the bush - the Isle of Man failed KSFIOM investors and depositors spectacularly, and their failure to resolve the situation quickly has indeed damaged the Isle of Man's (IOM) reputation as a safe offshore jurisdiction.

But who did the damage? In our opinion the UK government and FSA are every bit, if not more, to blame than the IOM government - and this brings me to the point where I can't personally blame a jurisdiction when the blame actually lies in the hands of governments and banks globally: and in this particular case, especially in the hands of the UK government.

Many people living in the Isle of Man make their livings from the growth in the island's offshore financial services industry, they aren't criminals - just regular people seeking an income and a livelihood, and the vast majority of savers and investors do have safe and well managed funds. The collapse of KSFIOM seems largely to have been triggered by a run on the bank, the cause of that run seems to be none other than the UK's Chancellor of the Exchequer Alistair Darling, later aided by Prime Minister Gordon Brown."

Prof. Brian W Darvell
Posted on 14 Jul 2009 9:56 am (Report this annotation)

On 08-09-26 at 18:10 I was told by
Jayne Leece
Assistant Manager - Banking Department, Treasury
Kaupthing Singer & Friedlander (Isle of Man) Limited

"Not only are all deposits held with Kaupthing Singer & Friedlander in the Isle of Man covered by the Depositors Compensation Scheme contained in the Isle of Man Banking Business (Compensation of Depositors) Regulations 1991, all deposits are also fully guaranteed by Kaupthing Bank hf. The parental guarantee from our parent, Kaupthing Bank hf, guarantees that, if the Isle of Man office were to close, Kaupthing Bank hf will cover all client funds to the value of 100%, this guarantee is lodged with the Isle of Man Supervision Commission.

The Bank has a clearly stated objective of having ongoing sufficient secured liquidity to repay all maturity obligations for at least 360 days. At end December 2007 the liquidity of Kaupthing Group was sufficient to cover all obligations for more than 440 days, reinforcing the Group's strong liquidity position."

So when this bank goes down, where is the money? Where is the guarantee? Her Majesty's government steals a large chunk of what there is, and does nothing about a vacuous promise.

Meanwhile, the vultures gather to pick over the bones, getting paid well in the process, and dissipating the assets to the direct and immediate detriment of depositors through delaying tactics, spurious legal activity and vain attempts to retrieve what HMG stole. SoA? Yes, to line undeserving pockets. IoM government tries to cover its tracks and denies responsibility amidst a smokescreen of promises to honour earlier promises. All empty. DCS should have kicked in immediately, not haggled over as a grace and favour treat.

Tell me my reading of this is wrong! Now why does Parliament in its collective wisdom not recognize brazen theft and respond appropriately?

BWD

Derek Eckersley
Posted on 14 Jul 2009 5:39 pm (Report this annotation)

It appears to me that Sarah McCarthy-Fry is an individual who does not have any feelings of compassion for anyone who has worked hard all their lives to save money for their rertirement. I am now 70 years old and will not have any chance of earing my lost savings back. I certainly do not want to wait 6+ years for my money to be returned to me.

I am sure that if Sarah McCarthy-Fry's parents or other family members were directly involved with this debacle, I feel certain that she would have been on the front line shouting for their rights and NOT written the kind of reply that she has.

There is only one reason why KSFIOM went into liquidation and that was due to the actions of the UK Government and their (so called) anti- terrorist laws.

When will the UK politicians admit to the cause of all of this, stop burying their heads in the sand and stand up for justice and ALL OUR RIGHTS and the return of KSFIOM's money?

Steen Wallis
Posted on 15 Jul 2009 2:12 pm (Report this annotation)

Side tracking from Sarah McCarthy-Fry
Actions by the UK government on Kaupthing, Singer and Friedlander UK (KSF UK)caused the downfall of KSF Isle of Man. I want these actions investigated. Why side-step this issue? The UK government has nothing to hide, does it?
Thousands of UK citizens are now in dire need because of acts by our own government.

Patrick O'Brien
Posted on 15 Jul 2009 2:25 pm (Report this annotation)

The KFSIOM debacle is an amazing indication of how solid the UK/IOM (Treasuries) relationship is. The collapse of KFSIOM was a result of the actions of the UK Treasury but it refuses to take any responsibility. The refusal for a public enquiry is indicative of this government. The chenanigans of the IOM government is trying to evade the issue is mind boggling. The long suffering depositors are between a rock and hard place. The Labour government response is a clear indication that the depositors of the bust bank can whistle for their money as for as it is concerned. If a Conservative or Liberal Democrat MP would care to highlight this issue as an example of how close to a banana republic economy the present UK government is becoming it may focus the UK electorate as to how they are coming to be viewed internationally. The simple solution of an intergovernmental loan from UK to IOM government seems to have been totally overlooked for some unknown reason. Can we get a Conservative or Liberal Democrat policy statement on how they will deal with this any any other future similar problems if they win office? The Treasury response to the call for a public enquiry is simply not good enough.

Paul R
Posted on 16 Jul 2009 11:02 am (Report this annotation)

Sadly, Ms McCarthy-Fry's is a typical "politician's statement" of which we have become increasingly familiar. Either she was not aware of the true history of the UK Government's implication in the KSF IoM collapse, or her advisers have conspired to conceal it from her.
Either way, the casual brush-off she has given to Mark Williams' question is an insult to all the British citizens affected by the matter.
Thanks are certainly due to Mr Williams for raising the question - if only more MPs were willing to take an interest in the plight of those they serve!

Margaret Flood
Posted on 16 Jul 2009 1:44 pm (Report this annotation)

Sarah McCarthy-Fry should be ashamed to give such an unsatisfactory response to the depositors of KSFIOM. Most people would blush to have to do so. Thousands of British depositors in KSFIOM, and their families, are collateral damage to the orchestrated bringing down of KSFUK by the British government. The Treasury Select Committee on the banking crisis recommended that the British and Isle of Man governments work together to resolve this crisis in the interests of the depositors. An independent inquiry is now called for to investigate their reluctance to do so and to ascertain the culpability of all parties involved.

Great numbers of depositors are in or near retirement and have lost their life savings. They are unable to survive without assistance and cannot recoup their losses. Many are now suffering ill health and depression. Those who are voted into government - and their representatives - should bear this in mind. They have a responsibility to see that justice is done.

Leonard Orton
Posted on 16 Jul 2009 4:16 pm (Report this annotation)

Leonard Orton

May I suggest that if Mark William's question were amended so that the word 'events' is replaced by 'actions of the UK Treasury', Sarah McCarththy-Fry would not be able to hide behind the IOM government's coat tails. If she has any power (which is a questionable matter), she might persuade Alistair Darling to hold an inquiry related solely to the UK government's culpability.

Susan Shore
Posted on 18 Jul 2009 11:52 am (Report this annotation)

Now that Iceland has applied to join the EU, I REALLY HOPE that Chancellor Darling, will make it his top priority to fight for, and represent, IOM's interests in getting Kaupthing hf to honour its infamous Parental Guarantee. Iceland should only be allowed to enter the EU on condition that it pays back its debt to ALL the honest savers in KSFIOM. It is the job of the UK Treasury to represent us in this debate. Darling caused this mess, and it's his duty to get us out of it. This could be his best opportunity ever!

Robert Coates
Posted on 19 Jul 2009 1:29 am (Report this annotation)

Yet another example of a politician answering a question that was not the one asked.
It is self evident that the demise of Kaupthing Singer & Friedlander UK precipitated the collapse of the Icelandic bank's subsidiary in the Isle of Man. Agreed it is in a separate financial jurisdiction but it is one that is inextricably linked with the UK constutionally, witness the supposed close relationship of the two financial regulators. How did this fail at a time when there was a strong focus on the banking system? Why did the Isle of Man's written evidence place the blame firmly on HMG? Why when the agreement was reached with the Icelandic authorities to repay the £2.5 billion used by HMG to support the 'Icesave/Edge' accounts, did the Ministry of Justice fail in it's duty to represent the interests of the Isle of Man in the international arena? A PUBLIC ENQUIRY IS REQUIRED!

Horace Gonsalves
Posted on 20 Jul 2009 4:04 pm (Report this annotation)

Sarah McCarthy-Fry's response seems to indicate that she has little grasp of the events leading to the collapse of Kaupthing Singer and Friedlander Isle of Man.

Had she chosen to familiarise herself with the situation before responding, she would have concluded that the UK government is directly responsible for instigating the failure of the bank and has had a hand in events following the collapse. As such, this government should be held accountable for their actions many of which have been shrouded in secrecy between the government, treasury and regulatory bodies of both the UK and the Isle of Man.

Why should the deposits of thousands of British tax payers in what was a healthy bank be lost without any recourse to the perpetrators of this fiasco?

Jackie Wagner
Posted on 21 Jul 2009 12:16 am (Report this annotation)

It seems that taking the deposits from KSF IOM to feed KSF UK's depositors was an easy way out for Mr Darling. Instead of getting 170,000 angry KSF UK depositors rioting on his streets he compromised 11,000 KSF IOM depositors who are scattered all over the world, therefore less likely to unite and demonstrate. I suppose the Treasury felt this might be the convenient option.

A public inquiry is vital and our honourable MP's should press for this URGENTLY.

Patricia Willingale
Posted on 21 Jul 2009 2:58 am (Report this annotation)

How you can callously dismiss the question whilst the facts clearly show that the whole debacle in the IOM was a direct consequence of the actions taken by HMG. It was clearly pre-meditated as evidenced by the setting up of the trust account and the immediate transfer of UK accounts to ING.

I implore you, Ms McCarthy-Fry, to reconsider the request and press for an inquiry so the people who have been treated as collateral damage by HMG can find out the truth as to why they have been dispossessed of their life savings.

Angela Rigaut
Posted on 27 Jul 2009 2:50 pm (Report this annotation)

The uncaring and callous attitude of the present government towards the thousands of British subjects, many of them retired after a lifetime of hard work and careful saving, whose life savings were taken away overnight without so much as an apology is beyond belief. Even if their funds were to be returned 100% tomorrow, the distress and suffering endured over the past 9 (nearly 10) months by the elderly depositors who depended on income from their deposit for their daily needs or those (often expats planning to return to the UK) who had deposited money from the sale of a house and now find themselves with no home of their own and/or those who are now forced to continue working into old age, often in hostile conditions overseas, to make ends meet can never be fully compensated. But the hardest to bear is the apparent lack of any concern or compassion.

It is more than time for these trite and evasive responses to stop.

MIKE SUTCLIFFE
Posted on 29 Jul 2009 9:55 am (Report this annotation)

The British Government should be truly ashamed of it's involvement in the demise of KSFIOM and the damage caused to its innocent and blameless depositors.

Why can't the Treasury respond in a responsible way instead of passing the buck much like the IOM Government does?

Bring on the Public Enquiry - what are you frightened of I wonder?!

Philip Lingard
Posted on 2 Aug 2009 7:37 am (Report this annotation)

The response of Sarah McCarthy-Fry is totally dismissive and inadequate.

I heartily agree that there needs to be a public and preferably judicial enquiry into the causes of the collapse of BOTH KSFUK and KSFIOM and the UK and IOM Governments response. The Treasury Response , although in part justified by the imminent collapse of KSFUK due to a run on depositors funds and other matters, was completely "partizan" in :

(1) Favouring depositors in KSFUK Edge Accounts by ensuring priority 100% payout of these and placing the funds in the hands of ING. This effectively sheltered the "Edge" class of creditors of KSFUK with an officially sanctioned illegal preference in any forthcoming LIQUIDATION;

(2) Disadvantaging both onshore and overseas-based expatriate UK depositors in KSFIOM (whose offshore deposits resulted from the response of the high-street UK banks to money-laundering rules) by PRECLUDING their participation in the full potential liquidation recovery of KSFIOM depositor's funds entrusted at that time to KSFUK , and denying them any future possibility of Pari- passu treatment with those of "EDGE" depositors;

(3) Wholesale and unjustified Defamation of the entire class of KSFIOM account holders by the Chancellor in the wake of the collapse by imputing them with an alleged "tax-dodger" status, thereby prejudicing rational consideration by the HOC Treasury Committee of any fair and reasonable response.

(4) Failure of the Chancellor to warn the IOM Regulator of his impending Statutory action which would FREEZE KSFIOM Depositor Assets within the UK Bank, endowing KSFIOM depositors with a less favourable status than accorded to UK "EDGE" Depositors in any forthcoming liquidation.

Amongst questions which must be answered are:

(1) WHY DID THE TREASURY THROUGH THE CHANCELL0R UNFAIRLY ENDOW UK "EDGE" ACCOUNT DEPOSITORS WITH A PREFERENCE STANDING AGAINST THE INTERESTS OF ALL OTHER DEPOSITORS IN BOTH THE UK AND IOM ?

(2) WHO'S INTERESTS IN BOTH INDIVIDUAL AND/OR CORPORATE TERMS WAS THE CHANCELLOR OR TREASURY SERVING IN SO DOING?

(3) WHY DID THE CHANCELLOR DO THIS GIVEN HE HAD FULL KNOWLEDGE OF THE DISADVANTAGE WHICH WOULD BE LIKELY TO ENSUE TO IOM DEPOSITORS FROM THE EFFECT OF THE STATUTORY INSTRUMENT ON THE IOM SISTER BANK?

(3) WHY DID THE TREASURY AND CHANCELLOR NOT INCLUDE PROVISION IN THE STATUTORY INSTRUMENT COVERING THE INTERESTS OF KSFIOM DEPOSITORS , THEREBY ENSURING EQUAL AND EQUITABLE TREATMENT IN ANY FUTURE LIQUIDATION FOR ALL DEPOSITORS IN THE TWO SISTER BRANCHES OF KSF?

lesley steer
Posted on 13 Aug 2009 3:34 pm (Report this annotation)

This pretty much sums up the sad response that the British Government have had to a situation that they caused but still refuse to acknowledge. It was the actions of the UK Treasury that brought down a perfectly solvent bank in the IOM and the concurrent retention of 500M of it's assets that have plunged thousands of ordinary depositors (most of whom are British citizens with no other palce to turn for banking services)into an ongoing nightmare. This is crying out for an enquiry: Why the constant side stepping? It is time for this government to step up.....