Government The Inquiry Into Collapse Of Kaupthing Iom

[Gladys]

There is nothing to disagree with: see my comment re 'unless the contract says otherwise'.

[Sebrof]

There is nothing to disagree with: see my comment re 'unless the contract says otherwise'.

 

You haven't followed the argument. The question revolves around whether the investment terms are similar or not.

 

S

[bellyup]

The nub is whether the business (the undertaking, assets and liabilities) was sold or the company (the shares). Ignoring any regulatory requirements, in the first instance counterparties would have to agree to a change in the party with whom they originally contracted, in the second it is only a change in the owner of the party with whom you have contracted, so unless the contract says otherwise, there is no need for notification or approval.

 

For example, NatWest was a stand alone bank, but I do not recall ever having to agree to their takeover by RBS - more's the pity.

 

I don't agree. When opening an account with Derbyshire Offshore, depositors were, we are told, asked to give approval to a change of ownership. The question is whether that approval, which depended on the "investment terms" being substantially similar, would be valid in a takeover by a risky foreign bank.

 

S

 

 

Told by who?

 

And who are 'we'?

 

Many people opened their accounts with the Derbyshire years ago - how many banks ask you to give approval to a change of ownership when you OPEN an account?

[Evil Goblin]

Whilst the transfer may have been authorised by the T & C of the deposit account i.e. the depositor agreed in advance that they would agree to any transfer of liability I think the only other way the transfer could have legal effect is by an Act of Tynwald. Perhaps John Wright could comment?

 

The T&C above (here) seems to show that the depositors would have agreed to the potential transfer of business.

 

What would your "only other" mean in that context ? I'm probably misunderstanding what you have written.

 

Do bank takeovers and mergers normally / regularly / ever involve an Act of Tynwald? Eg the recent Bradford & Bingley International takeover. Eg the current Britannia / Co Op merger. I'm not a lawyer either but I am fairly sure that it is always covered by the T&C.

I seem to remember that the mergers between National Provincial & Westminster and, more recently, IOMB and NatWest and then NatWest/IoMB/RBS were achieved by Acts of Parliament/Tynwald, so as to avoid the necessity for all sorts of contracts (including deposits) to be novated.

[Sebrof]

The nub is whether the business (the undertaking, assets and liabilities) was sold or the company (the shares). Ignoring any regulatory requirements, in the first instance counterparties would have to agree to a change in the party with whom they originally contracted, in the second it is only a change in the owner of the party with whom you have contracted, so unless the contract says otherwise, there is no need for notification or approval.

 

For example, NatWest was a stand alone bank, but I do not recall ever having to agree to their takeover by RBS - more's the pity.

 

I don't agree. When opening an account with Derbyshire Offshore, depositors were, we are told, asked to give approval to a change of ownership. The question is whether that approval, which depended on the "investment terms" being substantially similar, would be valid in a takeover by a risky foreign bank.

 

S

 

 

Told by who?

 

And who are 'we'?

 

Many people opened their accounts with the Derbyshire years ago - how many banks ask you to give approval to a change of ownership when you OPEN an account?

 

1 Pongo quoted the T&Cs.

2 The forum

3 It all depends on the terms. Before you put ALL your money into one bank, don't you read the terms? No? Is that prudent?

 

Please answer my questions.

 

S

[bellyup]

The nub is whether the business (the undertaking, assets and liabilities) was sold or the company (the shares). Ignoring any regulatory requirements, in the first instance counterparties would have to agree to a change in the party with whom they originally contracted, in the second it is only a change in the owner of the party with whom you have contracted, so unless the contract says otherwise, there is no need for notification or approval.

 

For example, NatWest was a stand alone bank, but I do not recall ever having to agree to their takeover by RBS - more's the pity.

 

I don't agree. When opening an account with Derbyshire Offshore, depositors were, we are told, asked to give approval to a change of ownership. The question is whether that approval, which depended on the "investment terms" being substantially similar, would be valid in a takeover by a risky foreign bank.

 

S

 

 

Told by who?

 

And who are 'we'?

 

Many people opened their accounts with the Derbyshire years ago - how many banks ask you to give approval to a change of ownership when you OPEN an account?

 

1 Pongo quoted the T&Cs.

2 The forum

3 It all depends on the terms. Before you put ALL your money into one bank, don't you read the terms? No? Is that prudent?

 

Please answer my questions.

 

S

 

 

Please answer mine.

 

Where does it say in any bank when you open an account you approval of any future change of ownership?

[Sebrof]

Please answer mine.

 

Where does it say in any bank when you open an account you approval of any future change of ownership?

 

In the terms and condtions. "52. We are entitled to, and reserve the right, upon giving you not less than one month ’s notice in writing, to transfer your funds to a third party offering similar deposit facilities provided that the terms and conditions shall in all material respects remain the same. Upon transfer our liability to repay your funds to you will cease."

 

Have you been reading the recent posts? There does seem to me and others some question over whether such a term would in all cases cover a transfer to a foreign bank.

But it is immaterial to you because you could withdraw whenever you wished.

 

S

[manshimajin]

Where does it say in any bank when you open an account you approval of any future change of ownership?

IMO this is not about what you agree in advance, it is about the situation at the time of ownership change. Gladys quotes NatWest and RBS. Both of these banks were ultimately owned by parents that were regulated under the EU and UK regulatory system. Ultimately that did not stop RBS going bellyup to use your 'name' but it did keep ownership within a major economic zone that was supposedly well regulated.

 

In the case of Derbyshire and KSF no doubt Derbyshire will argue that the IoM business of both institutions was regulated by the same regulator. But depositors were put into a situation where the ultimate ownership of the bank managing their assets was outside EU jurisdiction and was by the end of 2007 in a jurisdiction that was beginning to be questioned as to its financial solidity. To use an example I have already used would the IOM regulator have been equally happy for the new ultimate owner to have been in Timbuktoo (probably a better location for financial security than Iceland)? We know that banks move money around their network, they don't keep it in one jurisdiction.

 

I have no particular axe to grind on this matter as I am not a KSF depositor. Just wonder if the IOM regulator has been approached by DAG on why he did not consider having a change from a UK to an Icelandic parent in late 2007 to be a material change? What checks did the IOM regulator do on the Icelandic banking system before giving a green light? Was there any discussion between the regulator, Derbyshire and KSF about allowing Derbyshire depositors to have the opportunity to move funds?

[bellyup]

Please answer mine.

 

Where does it say in any bank when you open an account you approval of any future change of ownership?

 

In the terms and condtions. "52. We are entitled to, and reserve the right, upon giving you not less than one month ’s notice in writing, to transfer your funds to a third party offering similar deposit facilities provided that the terms and conditions shall in all material respects remain the same. Upon transfer our liability to repay your funds to you will cease."

 

Have you been reading the recent posts? There does seem to me and others some question over whether such a term would in all cases cover a transfer to a foreign bank.

But it is immaterial to you because you could withdraw whenever you wished.

 

S

 

'provided that the terms and conditions shall in all material respects remain the same.'

[bellyup]

I have no particular axe to grind on this matter as I am not a KSF depositor. Just wonder if the IOM regulator has been approached by DAG on why he did not consider having a change from a UK to an Icelandic parent in late 2007 to be a material change? What checks did the IOM regulator do on the Icelandic banking system before giving a green light? Was there any discussion between the regulator, Derbyshire and KSF about allowing Derbyshire depositors to have the opportunity to move funds?

 

The DAG have approached everyone and everybody for the last 9 months now.

 

Mr Aspden wrote us off early as 'uneducated investors' and said that 'non core' banks should be 'allowed to fail'

 

- I wonder where he keeps HIS money?

 

We employed an IOM advocate Mr John Wright to help us.

 

Its been a weary monumental task

 

Letters to the MHK/ IOM Treasury go for the most part- go unanswered .

 

There have been honourable exceptions such as Mr Juan Watterson.

[Gladys]

The point I had missed is that DBS was a building society and so a mutual, is that the case? If so, then the depositors are the owners and their approval would have to be obtained. I would imagine they also would have been paid something.

[Sebrof]

'provided that the terms and conditions shall in all material respects remain the same.'

 

At last, you are getting there.

 

It is normal for terms to permit the business to be transferred to another owner. The question is what circumstances would amount to a material difference in the depositor's position.

 

However, it is all academic now because there is nobody left to sue, except perhaps the regulator, and it is not at all clear that his duties towards depositors go as far as enforcing terms on their behalf.

 

But, in my view, this is the area that MIGHT show the regulator to have been dozing at the wheel. However, I stress that I am not in this industry, and have no idea how far the regulator's writ extends.

 

S

[scarbunny]

Please answer mine.

 

Where does it say in any bank when you open an account you approval of any future change of ownership?

 

In the terms and condtions. "52. We are entitled to, and reserve the right, upon giving you not less than one month ’s notice in writing, to transfer your funds to a third party offering similar deposit facilities provided that the terms and conditions shall in all material respects remain the same. Upon transfer our liability to repay your funds to you will cease."

 

Have you been reading the recent posts? There does seem to me and others some question over whether such a term would in all cases cover a transfer to a foreign bank.

But it is immaterial to you because you could withdraw whenever you wished.

 

S

 

'provided that the terms and conditions shall in all material respects remain the same.'

 

What material changes took place?

 

Did you continue to receive the same interest rates?

 

Did you have the same access to your money?

 

At the time of the hand over what material change took place, seriously you quote that specific point so I assume there must have been one.

[Sebrof]

The point I had missed is that DBS was a building society and so a mutual, is that the case? If so, then the depositors are the owners and their approval would have to be obtained. I would imagine they also would have been paid something.

 

No. It was that although T&Cs will generally impose consent on the depositor for a possible future sale of the undertaking, this can only be, generally, if the depositor's position is not adversely affected. The question is, would it be possible to argue that the sale of DBS Offshore amounted to a material increase in the depositor's risk.

 

S

[Sebrof]

What material changes took place?

 

Did you continue to receive the same interest rates?

 

Did you have the same access to your money?

 

At the time of the hand over what material change took place, seriously you quote that specific point so I assume there must have been one.

 

I would argue that a material increase in risk took place. Although that argument might be challenged by pointing out that DBS was on rocky ground, and therefore risky itself.

 

S