'Regrettable' situation for KSF depositors

The chief executive of the Financial Supervision Commission has answered questions on the arrangements for repaying depositors with the crashed Kaupthing Singer and Friedlander bank in the Isle of Man.

John Aspden told a Tynwald select committee it was 'terribly regrettable' a quarter of them would have to wait a number of years, possibly until 2017, before getting all the money they were entitled to receive. 

However, he pointed out 75 per cent of the 10,000 depositors had been fully compensated which, he felt, wasn't a bad outcome, given the difficult financial situation worldwide.

The remaining 25 per cent were above the limit set for early repayment under the rules of the compensation scheme, namely single people with deposits of at least £50,000 or couples who had twice that sum in the bank.

Eventually, they are expected to get up to 95 pence in the pound, but it looks like being several years before they will receive the money, which will come from the liquidation of the bank. 

The Depositors' Compensation Scheme has so far paid out more than £190 million to depositors with the failed bank.

When Kaupthing Singer and Friedlander UK was put into administration, just over two years ago, the UK's Financial Services Authority seized £550 million of deposits in the Manx branch.

A year ago, KSF Isle of Man managing director Aiden Doherty said a 'cloud of secrecy' surrounded those actions by the FSA, which has declined to give evidence to the select committee.

Yesterday (Thursday), committee chairman Juan Watterson MHK asked Mr Aspden about current relations between the Financial Supervision Commission over here and the FSA, the equivalent body in the UK.

Mr Aspden said it was 'business as usual'.

Mr Watterson then asked if he had received an apology from the Financial Services Authority, and Mr Aspden said 'No'.

Also due to give evidence yesterday was Dr Angela Downs of the KSF Depositors' Action Group.

However, she was unable to get to the Island, because of the severe weather conditions in the United Kingdom.

The next public sitting of the select committee will be a week today (December 10), when the liquidator of the bank and possibly Dr Downs will give evidence.