DAG Press Release 3 October 2009: The misery continues for depositors in KSFIOM

Category: DAG Press Releases


Press Release 3 October 2009
The misery continues for depositors in KSFIOM

One year on and depositors in Kaupthing Singer & Friedlander Isle of Man have only just received up to 24.8% of their money back. Although the Isle of Man finally allowed its own Depositors Compensation Scheme to be triggered after many months of legal wrangling and attempts to avoid its responsibilities, this only covers depositors with up to £50,000 in the bank (there are circa 3,000 people, mainly pensioners, with over this amount) and does not give anything to over 1200 life company bondholders who had placed deposits with KSFIOM on industry recommendation for security. Compare this with UK depositors who received their money back in full regardless of the amount.

On 8 October 2008 Kaupthing Singer & Friedlander (Isle of Man) had its banking licence withdrawn by the FSC on the Isle of Man. In the months preceding this event, the directors of KSFIOM on the advice and recommendation of the FSC and the FSA, the two financial regulators, placed £532million (over 50% of the bank’s assets) in KSFUK. This is contrary to standard UK and EU banking practice and meant that KSFIOM was totally dependent on the fate of a bank that we now know to have been on the FSA ‘at risk’ list.

Despite repeated requests noone has ever given a clear account of what happened, when and why. Two former directors of KSFIOM continue to be Deputy-Chair of the FSC and Chair of the IPA respectively. The FSC blames the FSA. The FSA blames the FSC.  Depositors are stuck in the middle without their money suffering much hardship and distress and very little prospect of their money back. Timescales of up to 6 years are being mentioned by the liquidators leaving many older depositors with the prospect that they may not be here to witness this event. This situation looks set to continue unless someone, somewhere speaks up for the truth, accepts responsibility and recompenses depositors in full.

Regulatory failure by both the FSA in London and the FSC in The Isle of Man is the main reason for the demise of KSFIOM and the predicament thousands of British citizens still face. Even the directors of KSFIOM blame the regulators (notwithstanding that one of them holds a senior position in that regulator) stating through their lawyers:

“…the placing of monies with KSFUK …was a decision that was carefully taken on behalf of the company after full consultation with and as required by the FSC, which in turn liaised with the FSA”.

So why are the KSFIOM British depositors the only ones left suffering one year on due to the perceived negligence and failures of established regulatory bodies who are there to ‘help retail customers achieve a fair deal’?

Depositors are still waiting for the FSC and the FSA to explain who did what, when and why. Persistent requests for the facts have been stonewalled. The misery for depositors continues…

Many individual depositor case studies, both direct depositors and life company bondholders are available on request from This email address is being protected from spambots. You need JavaScript enabled to view it.



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