Monday, July 6, 2009

Rough Justice in the Isle of Man

Insult was added to injury when the Court judgement called upon the Company to pay the costs incurred by the DAG on account of the Treasury's SoA, when of course that meant the depositors will have to pay! On 3 February Tony Brown told the UK Treasury Select Committee that the IoM would deal with the KSFIOM affair by implementing its well tried DCS but he did not do this. Instead he was persuaded by the Treasury that the best interests of the IoM would be served by an alterative means of dealing with the problem, namely a Scheme of Arrangement. They could not even get the SoA right from the start which added significantly & unnecessarily to the DAG's costs on account of it.

The Depositors' Action Group did not ask for this SoA and was only prepared to accept it if it offered better terms than would be available through liquidation of the bank & the compensation scheme. Though the Treasury categorically stated that the SoA was in the best interests of the depositors, neither the depositors who had the most to lose nor the Deputy Demptster could see that it was & in May ordered that the bank should be liquidated.

When the SoA was rejected Tony Brown admitted in public that it was put forward with the primary objective of protecting the best interests of the IoM. That being the case it is extraordinary that the depositors should have to pay for the costs it incurred on account of the SoA which was not in the best interests of those who had the most to lose from it. Clearly there are grounds for the Depositors to appeal but that would involve them in further costs with doubtful prospect of the Court's decision being overturned.

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