Manx govt to 'run down' Kaupthing IoM to avoid compensation trigger

The Manx government is working on a scheme to ‘run-down’ Kaupthing IoM rather than let the bank go into liquidation.

FTSE 350

Prev Close:

by Iain Martin on Nov 06, 2008 at 15:36

The Manx government is working on a scheme to ‘run-down’ Kaupthing Singer & Friedlander rather than let the bank go into liquidation which would trigger compensation payouts to the savers who have £821 million on deposit with the failed Icelandic bank.

The Manx government’s chief minister Tony Brown has set up a committee that will develop a plan to either restructure KSF IoM for sale or run it down in an ‘orderly’ fashion to avoid liquidation.

‘In particular this would be to secure a good deal for creditors while also avoiding the trigger of an event of default under the terms of the Depositors Compensation Scheme,’ Brown told the House of Keys, the island’s parliament. ‘I cannot say whether or not we will achieve what we have set out to do, but I do believe that we need to try.’

KSF IoM will be put in provisional liquidation until the 28 November when the Manx High Court will have to decide whether to put the bank into administration. The case has been adjourned while negotiations between the Manx, Icelandic and UK governments were ongoing.

The Isle of Man government last month raised the maximum compensation limit to £50,000 for its depositor’s protection scheme. It has also pumped £150 million into the scheme, which is normally funded by a levy on banks and building societies.

Email a friend

Email me when someone comments on this article Print

4 comments so far. Why not have your say?

On behalf of the KSFIOM Depositors Action Group, could anyone explain what this means?

We are unsure what 'Run down' means...

The key issue is that the main assets of KSF IOM are locked with ING Direct (we are not sure that is true, but Darling stated that in the Treasury Select Commitee hearing) after HMG put it there.

So we are mystified what is meant by 'run down' and how this will get the funds from ING Direct and back to KSF IOM.

report this

Perhaps the CEO & his MOTLEY CREW of

KSF should be;

RUN DOWN in fact some depositors might suggest they ought to be;

PUT DOWN.

How the hell could so much money be lost by so few ?

report this

PLease explain what the term "run down" means in the above article by Iain Martin | 15:36:47 | 06 November 2008

report this

Nick Moulsdale

Nov 07, 2008 at 15:45

Just before we slag off everyone in sight, KSF was put into Administration because HM Treasury took £2.5bn in deposits from KSF and gave it to ING direct. The KSF Board were the last people to know. And - to the best of my belief - KSF in the UK - which may or may not include Isle of Man, I do not know - has enough to repay all or most of its depositors. Just remember the Government bought into all other UK Banks (bar HSBC) using our money, although Barclays have chosen to accept a worse deal from theMiddle East.

I'm hoping the IOM will be able to sort out the KSF debacle in IOM, but do NOT blame the people who ran it. I believe it was run in a responsible manner. Just think of the headlines, think of how many millions are having to be given/paid to sort out Icesave. No such announcement has been made about KSF, all the money is either accessible through ING or returned in full to depositors. Its the IOM part of KSF which has been left out on a limb by HMGovernment.

report this

Please sign in here or register here to comment. It is free to register and only takes a minute or two.