KSFIOM DAG defeats Isle of Man Government attempts to avoid liquidation

KSFIOM DAG defeats Isle of Man Government attempts to avoid liquidation

KSFIOMDAG defeats Isle of Man Government attempts to avoid liquidation

Isle of Man Depositors Compensation Scheme to be tested in full

Finally today 27th May 2009 almost seven months since Kaupthing Singer & Friedlander (Isle of Man) was placed under the authority of a Liquidator Provisional, a winding-up order was granted in the Isle of Man courts. The Isle of Man Government (IOMG) has spent the intervening period developing a complex and inadequate Scheme of Arrangement that offered depositors nothing more than liquidation yet provided a smokescreen for the authorities involved in this financial debacle to try to avoid the status of liquidation for a bank on the island and dilute the legal rights for depositors who want to find out what happened when and why.

The KSFIOM Depositors Action Group has made its position clear from outset. When approached back in December 2008 to discuss the merits of the proposed Scheme of Arrangement, representatives covering every class of depositor made it clear that any agreement that removed the possibility of legal action against the UK and IOM regulators or the bank itself would not be accepted. Any agreement that repaid the IOM Government in full for its contribution prior to repaying depositors in full was also not acceptable. So surely leaning on a SoA that repaid the Isle of Man Government when a 70% dividend had been paid to depositors when it was already anticipated that a 75% dividend may be available under a standard liquidation, was not a particularly wise move. But the IOMG failed to listen and ploughed ahead despite the early and consistent warnings from the DAG that the proposed SoA would not pass the vote in its current form. In doing so the IOMG has wasted almost a million pounds of IOM taxpayers money. This was not something that the KSFIOMDAG wanted to happen - it has always tried to do what is right for both on-island and off-island depositors.

It was a course of action chosen and blindly followed by the IOMG.

So now the DAG is seeking to recover the legal costs it was forced to incur as a result of the proposed Scheme of Arrangement. Without this legal representation from respected lawyers Edwin Coe LLP, depositors would not have recognised the subtle ways in which their rights were being diluted by the SoA and fundamentally they would not have been represented in the three different groups that voted and ultimately defeated the IOMG proposals last week. The hearing regarding costs has been unusually deferred until 27 June. The fact that this was not normal practice was noted by the Deputy Deemster at the request of the DAG QC Dominic Chambers but no decision has yet been made on this matter.

Meanwhile over 10,000 depositors still suffer the indignity of no access to money that is rightfully theirs. This whole episode highlights the inadequacies of the Isle of Man financial sector since it now faces the prospect of calling upon an untested Depositors Compensation Scheme that is still being widely promoted by all the banks on the island today despite the fact that many believe it will not operate as envisaged and despite the fact that the IOMG itself has refused to explain exactly how the DCS will work. It also means that the Vice-Chairman of the regulatory authority the FSC and the Chairman of the IPA are directors of a bank that is in liquidation.

KSFIOMDAG will not rest until all depositors receive 100% of their money back. Furthermore it is clear that in this time of transparency and fairness that has engulfed the UK Parliament, it is time that the Isle of Man follows suit and not only declares its own interests in this debacle but also holds a detailed independent public enquiry as to how this situation was allowed to develop in the first place and the actions of politicians and regulators before, during and after the crisis to preserve their own reputations ahead of preserving the money of the people who entrusted their life savings to the Isle of Man.

So we ask the media to support our calls for an independent public enquiry and highlight our continued plight - in particular the individual stories of hardship and worry that continue... during the seven months of protracted pain people have lost homes, been forced to close businesses, suffered immeasurable ill health due to the stress, divorced , had their families broken apart...and we believe that up to nine people have died , some as a result of the added stress financial hardship brings.

If you would like a first hand account of how the financial crisis of October 2008 is still impacting upon innocent depositors who had misplaced faith in those in authority in the IOM and the UK to do the right thing, please email ksfiompress(?)googlemail [dot] com and you can speak to them directly. Had the IOMG not intervened in this disastrous way, the consequences for depositors would have been far less. Much pain and suffering has been caused as a result of separating people from their money for longer than necessary.

Ends

For more information
www.ksfiomdepositors.org

email ksfiompress(?)googlemail [dot] com

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