DAG Press Release 11 April 2011: Loan Trust Proposal

Category: DAG Press Releases

KSFIOM DAG calls for creation of UK/IOM Loan Trust

 

KSFIOM Depositors Action Group (DAG) is calling for the creation of a joint UK and IOM Government Sponsored Loan Trust which would allow those higher-value depositors and bondholders of Kaupthing Singer & Friedlander (Isle of Man) yet to recover a significant part of their savings following the bank's collapse in October 2008 to immediately receive the full balance of their funds. Their proposal, outlining a simple mechanism by which this could be achieved at minimal cost to the two governments, was delivered to the respective Treasury Ministers of both countries on 7th April.

 

Many of the affected savers are non-resident UK expatriates unable to hold or open sterling bank accounts in the UK as a result of the anti-money laundering policies of UK banks; many had placed substantial sums of pension money in KSFIOM and can ill afford to wait until 2017 to see the return of the major part of their savings as the liquidation runs its course; others had deposited funds temporarily between the sale and re-purchase of a house, notably on returning from working abroad to retire in the UK; many were long-standing customers of the Manx subsidiary of the Derbyshire Building Society, acquired by Kaupthing less than a year before its collapse.

 

Depositors believe that, since regulatory failures in both countries played a role in the collapse of their otherwise viable bank, both governments should accept a share of responsibility. The proposed Loan Trust would deliver a simple and efficient solution to addressing this issue without exposing either Treasury to onerous financial commitments. Over two years on from the bank's insolvency, the latest distribution (on 8th April) has brought the returns from the liquidation to 73.6% and the final recovery is now estimated to be between 91% and 98%, disregarding claims in connection with the disputed parental guarantee from Kaupthing, currently in litigation in the Icelandic courts. Most, if not all, of the loan would therefore be recovered over the next few years.

 

KSFIOM DAG is calling on both governments to give serious and timely consideration to this eminently workable proposal which would not only provide considerable relief to the retail depositors and bondholders who, unlike their counterparts in KSFIOM's sister bank in the UK, have suffered major financial distress since the failure of their bank, but would also help to repair the damaged reputation of the Isle of Man as a responsible offshore financial centre.

 

The proposal and copies of the identical covering letters addressed to the UK and IOM Treasury Ministers may be downloaded here: http://www.ksfiomdag.com/index.php?option=com_kb&task=article&article=161

 

KSFIOM Depositors' Action Group: www.ksfiomdag.com

For further information, contact This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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