1 Horse Guards Road,
Information Rights Unit
London.
SW1A 2HQ
Tel: 020 7270 4558
Fax: 020 7451 4861
Ian Davison
[HM Treasury request email]
www.hm-treasury.gov.uk
By email to:
Request-10262-ba41ce29@whatdo
Our ref:
IRU/9/426
theyknow.com
10 June 2009
Dear Mr Davison,
FREEDOM OF INFORMATION ACT REQUEST: KAUPTHING, SINGER &
FRIEDLANDER
Thank you for your emails of 11 and 28 May 2009 entitled “Basis of payment of
Kaupthing S & F funds to Dave Whelan”.
You requested the following information under the Freedom of Information (FOI) Act
2000.
• Whether there have been any exceptions to the defined published rules for release
of funds/compensation, whether by release of funds by KSF UK, payouts through
FSCS or compensation/advances by HMG to any company/individual due to their
deposits with KSF UK;
• Have any special arrangements been made outside the scope of the defined
published rules regarding release of funds, compensation or advances of funds to
any company/individual that had deposits with KSF UK; and
• If there have been exceptions or special arrangements please detail fully the reasons
and basis for the exception(s).
We do not hold information that answers the specific questions you have raised. As we
have indicated before, the Financial Services Compensation Scheme (FSCS) is
independent of HM Treasury (HMT) and has sole responsibility for determining whether
a depositor meets the eligibility criteria set out in the compensation scheme rules.
However in relation to your first question, we would confirm that the FSCS cannot make
exceptions to the published rules. In particular the FSCS can only pay out according to
the scheme rules (which are made by the Financial Services Authority (FSA)) and has
no discretionary ability to pay compensation either to persons who are not entitled to
compensation or in excess of the amounts to which eligible claimants are entitled.
The Treasury has announced that any depositors eligible to claim under the FSCS,
whose accounts were not transferred to ING Direct (see below), are being paid out
through the agency of the FSCS, with the Treasury financing reimbursement of the
amounts, which exceed £50,000 (the compensation limit for deposits in the published
rules), which are not covered by the FSCS. I attach a link to a press notice issued by
HMT on 9 October of last year that provides further information:
www.hm -treasury.gov.uk/press_103_08.htm
For depositors who held Edge accounts with KSF, the Government made arrangements
using its powers under the Banking (Special Provisions) Act 2008 to transfer those
accounts to ING Direct. The relevant instrument is the Kaupthing Singer & Friedlander
Limited Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2674) available
on the OPSI website (www.opsi.gov.uk).
The FSCS was required to pay a contribution to the costs of this transfer equal to the
compensation it would have paid to eligible depositors under the published rules of the
scheme, had KSF being left to go into general insolvency without the transfer being
made. S.I. 2008/2674 deemed this contribution to constitute the payment of
compensation to the depositors concerned.
The Treasury also made a contribution to the costs of transferring deposits from KSF UK
to ING. The Treasury’s contribution was equal to the amount of KSF’s liabilities to
eligible depositors less the FSCS contribution and less £5 million. The basis for this
payment was also S.I. 2008/2674. In effect this meant that the Treasury provided the
funding for any funds held by Edge depositors in excess of the statutory maximum
compensation for the FSCS.
Timeliness of this response
You wrote to us on 28 May pointing out that the Act requires responses to
be sent ' promptly' and within a maximum of 20 working days, and asking for ‘an honest
and comprehensive response as soon as possible’.
We recognise that the Act requires as prompt a response as possible and that requests
must be answered within 20 working days. We receive a large number of requests and
deal with them in the order we receive them. We work hard to provide prompt
responses within the statutory deadline and have a high degree of success in doing so.
As you might appreciate, this policy area is particularly busy at present and has a
number of competing priorities.
I can confirm that this response has been sent within the statutory time limit, given that
the public holiday on 25 May is a non-working day for the purposes of this calculation.
I accept that you may be disappointed not to have received an earlier reply but hope that
you will be satisfied with this response.
If you have any queries about this letter, please contact us at the email account given in
the header to this letter. It would help us, if you could remember to quote the IRU
reference number (also in the header) in any future communications.
Yours sincerely,
Information Rights Unit
For HM Treasury
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Your Rights to Complain under the FOI Act
If you are not happy with this response, you may request a review by writing to HM Treasury, Information
Rights Unit, 2/S2, 1 Horse Guards Road, London SW1A 2HQ. Email [email address]
Any review request must be made within 2 months of the date of this letter.
It would assist our review if you set out which aspects of the reply concern you and why you are
dissatisfied.
If you are not content with the outcome your complaint, you may apply directly to the Information Commissioner
for a decision. Generally, the ICO cannot make a decision unless you have exhausted the complaints
procedure provided by the Treasury. The Information Commissioner can be contacted at: The Information
Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF.
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