1 Horse Guards Road London SW1A 2HQ
Information Rights Unit
Tel: 0207 270 4558
Fax: 0207 270 4861
Ian Davison
www.hm-treasury.gov.uk
[email address]
request-10387-
[email address]
Ref: 9/332
14 May 2009
Dear Mr Davison
Freedom of Information Act 2000:
Kaupthing,
Singer and Friedlander (Isle of Man) (KSF IoM)
Thank you for your enquiries of 14 April 2009, received on 15 April, under the
Freedom of Information Act 2000 (The “Act”).
You asked:
what steps the UK Government have taken, or are planning to take to ensure that
the Isle of Man authorities vouchsafe the savings and deposits in the banks in
their jurisdiction;
and
for confirmation that assistance by way of release of funds frozen with KSF UK
(which you understood to be within UK Treasury powers) or a loan to the Isle of
Man, has, or will be offered.
2. Before answering your request I would like to make clear that your assertions on
the freezing of funds and provision of a loan is incorrect. The administration process
of KSF UK is a matter for the administrators. The reason the funds to which you refer
cannot be repaid is not because they are frozen funds, but because KSF UK has
been placed into administration and, as part of that process, a moratorium on
enforcement action by creditors is in place. Creditors of KSF UK, including KSF IOM,
will be treated in accordance with the administration procedures and will be paid out
via the administration in the normal way.
We would also like to clarify that in giving evidence to the Treasury Select Committee
on 3 February 2009, the Chief Minister of Isle of Man stated that he did not think the
UK Government is responsible for the financial affairs of the Isle of Man and that he
was satisfied that Isle of Man has the resources to make the payments required
under its compensation scheme.
3. The Freedom of Information Act allows requests for recorded information from a
public authority, subject to certain rules. I can confirm that the Treasury does not hold
any information falling within the description of your request.
4. It may be helpful for you if I set out some background information. Kaupthing
Singer & Friedlander (Isle of Man) (KSF IoM) is not a subsidiary of KSF in the UK,
but of an Icelandic company in the Kaupthing group. It was the responsibility of the
Isle of Man’s regulator to assess how the failure of the parent company in Iceland or
the failure of any other company in the group would impact on the Isle of Man
subsidiary and take the appropriate action. Ultimately this was a failure that started in
Iceland and responsibility for banks in Iceland rests with the Icelandic authorities.
5. The action which should be taken in relation to KSF IoM in the future is also a
matter for the Isle of Man Authorities. However, we are aware that on 9 October the
Isle of Man Court made a Provisional Liquidation Order in relation to KSF IoM. On 19
February the Isle of Man Court ordered an adjournment of the hearing of the winding
up petition until 9 April 2009 to allow the IoM Treasury to prepare a Scheme of
Arrangement. On 19 May 2009, KSF IoM depositors will decide between the Scheme
of Arrangement and liquidation and activation of the Depositors’ Compensation
Scheme (DCS). Further information is available on the Isle of Man’s website:
http://www.gov.im/cso/faq_gfs.xml.
6. Arrangements for depositors in banks in the Isle of Man are also a matter for the
Government of the Isle of Man. Deposits with KSF IoM will be subject to the Isle of
Man Deposit Compensation Scheme (DCS). Further information about the DCS, and
eligibility for the scheme, is available on the Isle of Man Government’s website at:
http://www.gov.im/fsc/investor/dep_comp.xml.
7. Notwithstanding the above, and as we have indicated before, it is the case that
the UK Government, continues to work closely with the Icelandic authorities to
ensure fair treatment for depositors and creditors of the failed Icelandic banks,
including KSF IoM.
8. If you have any queries about this letter, please contact me. It will be helpful to us
if you remember to quote the reference number above in any future communications.
Information Rights Unit
On behalf of HM Treasury
Your Rights to Complain under the FOI Act
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If you are not happy with this reply, you may request a review by writing to HM Treasury, Information Rights Unit, 2/S2, 1
Horse Guards Road, London SW1A 2HQ. Email FOI.responses @hm -treasury.gov.uk
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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