Government The Inquiry Into Collapse Of Kaupthing Iom

[pongo]

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.

 

There was no windfall payout when Derbyshire (the UK BS) was merged into Nationwide and it did not demutualise. Derbyshire Offshore was a subsidiary owned by a mutual; but not a mutual itself . Its depositors were not members*.

 

* ETA: Potentially some depositors might have also coincidentally been members as a result of also being members of Derbyshire BS in the UK.

 

This is true of all remaining offshore branches of mutuals AFAIK. Depositors are not members.

 

EG Nationwide International FAQ

 

Will I be a member of Nationwide Building Society?

 

Nationwide International Limited is the wholly owned subsidiary of Nationwide Building Society. Account holders of Nationwide International Limited are depositors and not members, therefore, by opening an account with Nationwide International you will not obtain membership rights in Nationwide Building Society.

[scarbunny]

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

 

I would agree that in hindsight a change in risk occurred although at the time as bellyache has pointed out KSF was seen as a safe and secure bank.

 

However I would argue that a change in risk is not a material change in the agreement with the bank, as long as the terms on which you are doing business with the bank are the same i.e the same access to your deposit the same or better interest rates ect. Then the change itself would not be enough grounds to argue against it.

[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.'

 

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.

 

 

Its obvious now that the bank was changed to a bank whose parent was outside of the uk.

The FSA in the UK had been warned by Mr Tony Shearer that in his opinion ( he was MD of Singer Friedlander ) the management of KSF were not competent to manage a bank . He was concerned for his depositors and therefore flagged a warning to the FSA .

 

These in there turn should have made the FSC aware of his warnings prior to the take over of the DBS.

 

Mr Aiden Doherty the MD of FSFIOM was a former employee of Singer Friedlander must have been aware of this concern.

 

The testimony of Mr Shearer came out at the TSC meeting in February..

[Sebrof]

I would agree that in hindsight a change in risk occurred although at the time as bellyache has pointed out KSF was seen as a safe and secure bank.

 

Well, I don't know when the takeover ocurred, so you may be right.

 

However I would argue that a change in risk is not a material change in the agreement with the bank, as long as the terms on which you are doing business with the bank are the same i.e the same access to your deposit the same or better interest rates ect. Then the change itself would not be enough grounds to argue against it.

 

This is where I would strongly disagree.

 

S

[bellyup]

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?

 

These are very valid questions unfortunately I do not know the answers.

Prior to this happening I and many like me were just savers in a bank assuming that people who knew about these things - like Regulators -would do the right thing. I had no reason to mistrust the IOM or its regulator -.

I did ring up the MD Mr Doherty on several occasions and the way he explained the matter it seemed that all was in order.

[bellyup]

@007 Pimpernel

 

 

I have taken the liberty to reproduce your post here as the thread has been locked by our esteemed moderator probably because as he points out there are a gazillion other threads ( well four) going but was an interesting article quite fair and unbiased.

 

 

In my travels I found this topical article: http://www.shelteroffshore.com/index.php/o...-damn-it-10514/

I know not everyone on the IoM is interested in politics & even less interested in those poor folk who have become collateral damage in the Kaupthing fiasco, but there might be a few people in the Forum who would like to comment on this article, and are able to do so without hurling a load of insults, abuse, & foul language

[Sebrof]

@007 Pimpernel

 

 

I have taken the liberty to reproduce your post here as the thread has been locked by our esteemed moderator probably because as he points out there are a gazillion other threads ( well four) going but was an interesting article quite fair and unbiased.

 

It is not a good article. It makes various statements about IOM culpability, but provides no support for them whatsoever.

 

S

[bellyup]

@007 Pimpernel

 

 

I have taken the liberty to reproduce your post here as the thread has been locked by our esteemed moderator probably because as he points out there are a gazillion other threads ( well four) going but was an interesting article quite fair and unbiased.

 

It is not a good article. It makes various statements about IOM culpability, but provides no support for them whatsoever.

 

S

 

Try reading it.

http://www.shelteroffshore.com/index.php/o...-damn-it-10514/

[ans]

Closing this. Please use http://www.manxforums.com/forums/index.php?showtopic=32732