Taxing times lay ahead for the Isle of Man

Mr.Steve Rodan, Speaker of the IoM parliament, is not quite right when he recently said: : “every pound spent here is raised here”. The IoM financial services industry earns very little from the IoM. The banks are primarily places for taking deposits that are then upstreamed to an onshore parent bank to be put to work to make money, & the IoM simply taxes banks to raise revenue for its budget.

Mr.Rodan went on to say: ‘By statute our Finance Minister is obliged to balance for a budget surplus – this is done consistently; with no external borrowing, and rates of taxation which actually encourage private enterprise and wealth creation, yet this little nation can still point to first-class publicly financed services in health, education and social security'.

He speaks as though the IoM has a self sufficient economy. Clearly it hasn’t.
It has an economy highly dependent on its financial services industry but it has no bank of last resort. It is out of step with the UK & the rest of Europe. As a Crown dependency it should be required to conform to international agreements in respect of the management of financial affairs that affect us all. Hopefully two inquiries in the UK (Foot & the judicial commission) will expose the weaknesses in the IoM, including those that make depositing in the IoM a risky business.

The Kaupthing fiasco illustrates well that the IoM is not capable of dealing with a banking crisis. Expats & others are now finding out that it is not as secure a place to deposit their life savings as it is trumpt up to be in the glossy brochures & fishing expeditions undertaken by banks & other finance houses.

This and the increasing impetus by the OECD & others to expose those economies that rely significantly on tax evasion and avoidance to bolster them is going to force the IoM to rethink its whole approach to the way it operates as an offshore financial centre. However it is unlikely that principles of morality & ethics will be central features of the exercise. It looks as though taxing times lay ahead for the Isle of Man

It's time to open Pandora's box in respect of Kaupthing UK

Prior to October 2008 KSFIoM directors transferred over half the bank’s assets from Kaupthing hf (Iceland) to KSFUK where they were subsequently lost in administration. The High Court making the administration order did so with an accompanying sealed court order.

Knowing what we do now following the leaks concerning Kaupthing hf it is time these sealed orders were opened so that all can see what possible machinations there may be in respect of the KSFUK’s accounts. We already know from the receiver that they are complex & difficult to unravel which is not surprising as he says investigations extend to the Cayman Islands.

Is it possible that there may have been coverup in respect of the KSFIoM bank immediately prior to that bank losing its licence in October 2008? There’s still too much secrecy in this dreadful Kaupthing affair. It is time that Pandora’s box be opened!

See Wikileaks on 'What ugly secrets are waiting to be exposed?' : here

Crows nest cry from a sinking ship

Ref: article in IoMToday 27 August here . Allen Bell (IoM Finance Minister) is good at 'smoke & mirrors' statements, putting a bright 'spin' sparkle on a badly tarnished image. The IoM government is taking 22% of KSFIoM assets for the compensation scheme but making it it sound as though it is doing depositors a favour. It isn't 'compensation' anyway. It is just a statutory government advance up to £50,000 in lieu of the government recovering most of it from the realised assets of the bank. Even the levy on the banks for the compensation fund is to be refunded. In other words the dispossessed depositors are paying for their 'compensation'from what is left from the ashes of the bank.

Depositors with over £50k lost will not get a penny more until the IoM government has recoved from the assets what it is paying out to them in 'compensation'. Apart from late delivered emergency survival payments depositors are 11 months down a road called 'ruin' before they are seeing a penny of their lost life savings.

The fact remains the compensation scheme is seriously flawed and now not relied upon by the banks though they still peddle it as 'security' in their glossy fishing publicity. In reality many are having to rely on their nationalised onshore banks as fallback in the event of them getting into serious difficulties. Without this dependency on the parent bank the deposit taking business would be finished on the IoM. The ship is sinking anyway.

The message to the world is simple: DON'T BANK ON THE ISLE OF MAN as the risks of doing so are unacceptable. That message is going out through videos on www.youtube.com and through Twitter & Facebook. All the facts & relevant links can be found here http://www.kaupthingiom-dag.co.uk

Not so squeeky clean after all

On its blog Tax Research UK comments on an article published in the Times that the Nationwide Building Society did not have information on its offshore account holders. read here

The Foot inquiry into the relationship between the UK & the Crown dependencies needs to take serious note of what dispossessed Kaupthing depositors are saying in its evidence here. I doubt if it will.

It's morally wrong to gain from the loss of others

Manx Radio reports HERE on a book being published on the Kaupthing fiasco by the former bank boss of Kaupthing hf (Iceland)

It is morally wrong for someone who was the architect of the collapse of a bank - and a major player in the financial crisis that subsequently hit Iceland - to gain from his gross incompetence that has wrecked the lives of millions of people. Rather than financially gain from his greed he should lose his liberty behind bars.

The KSFIoM depositors will not tolerate this travesty of injustice. They don't want compensation (which they are paying for anyway through the bank's liquidation) -- they want ALL their money back.

Until they do they will say with every justification what they are saying on Youtube: "DONT BANK ON THE ISLE OF MAN" as there are risks in doing so as the Chief of the FSC has rightly pointed out. He wants people contemplating depositing on the Isle of Man to satisfy themselves whether it is safe to do so. Kaupthing depositors are helping them to make an informed judgement based on their own experience a research.

It's all here on the site: http://www.kaupthingiom-dag.co.uk including the links to 19 videos on www.youtube.com saying: "DON'T BANK ON THE ISLE OF MAN"

This is not a campaign of revenge

DONT BANK ON THE ISLE OF MAN is not a campaign of revenge dreamt up by angry depositors. It backs the evidence that the IoM does not have the proper infrastructure to operate an offshore financial services industry, and expats & other around the world need to know the facts.

As the Chief of its Financial Supervision Commission says himself, deposits in the IoM bear the same sort of risks as investments and it is up to depositors to satisfy themselves that their money is safe in the IoM. Dispossessed depositors are helping potential depositors to make well informed decisions as they don't want others to endure the hell that they have had to put up with for 11 months.

No one need worry that the campaign will bring down the IoM economy. That is not the objective. If it starts to look even remotely that it is having such an impact it will be absolutely certain that the IoM government will do something before it starts to lose it precious AAA credit rating. The Treasury has stated that income from deposits represent only a small part of the IoM's budget. If that is not true then the best thing it can do right now is get the Kaupthing fiasco out of its hair by finding the means to restore depositors every penny of what they have lost.

The UK Treasury Select Committee recommended that the IoM government should meet with the UK government to resolve the issue. I have seen no evidence that such a meeting has taken place. Perhaps it is proud independence that stops little IoM going cap in hand to big brother UK to find a political solution. If that is the case then we know that 'pride comes before a fall'.

Don't bank on the Isle of Man on Youtube

The Kaupthing expat depositors who have lost over £50,000 of their life savings are concerned that other people should be aware of the risks they face by depositing on the Isle of Man. They would not wish anyone else should experience the terrible life they have had since October 2008 when the bank lost its licence and closed its doors on them. Their money had been lost by the bank's directors when the directors made the grossly irresponsible decision (backed by the Financial Supervision Commission) to place unprotected over half the bank's assets into KSFUK which went into administration.

Consequently depositors are now posting videos on Youtube to warn people of the risk of banking on the Isle of Man. Their message is simple: DON'T BANK ON THE ISLE OF MAN. The videos may be viewed HERE

You can't bank on the Isle of Man to protect your money

The UK Prime Minister has stated unequivocally that it was HM Government’s policy that all governments should vouchsafe savings and deposits. This has been accepted by the g20 nations & has now been endoresed by every jurisdiction throughout Europe except the Isle of Man. Why not ?

As a small Crown Dependency the Isle of Man should be compliant with the policy, but it does not have the wherewithal to embrace it as it has no bank of last resort.

However, the Isle of Man is required to be compliant with international agreements entered into by HM Government, & if necessary the Government could legislate to enforce compliance. But the Ministry of Justice does not recognise the injustice of the situation as it affects thousands of expat British taxpayers who had no option but to bank offshore because of UK anti-terrorsim legislation. Instead it ducks the issue by stating that the IoM is an independent jurisdiction which has chosen to deal with the KSFIoM debacle through its depositors' compensation scheme.

Nothwithstanding the position of the Ministry of Justice (supported by HM Treasury), the UK Treasury Select Committeee recommended that the two governments should get together to find a resolution to the Kaupthing problem. There is no evidence that this has happened. Why not?

The Isle of Man should not be selling itself as a secure offshore financial centre as it does not have the financial infrastructure to cope with a banking crisis. Instead it allows its Financial Supervision Commission to state that it is not responsible if a bank fails, and that it is the responsibility of depositors to accept that a deposit carries a risk in much the same way as does an investment, & that prospective depositors should satisfy themselves that their money is safe in the trust of an IoM bank.

This is absurd! What then is the point of having a Financial Supervision Commission? What is the point of a bank if ones money isn't safe in its trust? KSFIoM was considered by depositors as guaranteed SAFE, that is why many expats felt confident in putting on temporary deposit, for example, the proceeds of the sale of a house pending their return to the UK.

The Isle of Man is NOT a secure place on which to deposit one's life savings. Until the government can guarantee that it is the message is clear: DON'T BANK ON THE ISLE OF MAN as it could seriously damage your wealth. See video: http://bit.ly/NBiwC

manxforums.com censors Jim's first post!

The post was 'Depositors do not have a quarrel with the people of the Isle of Man'. Some members of manxforums regularly break the Terms & Conditions of the use of the Forum, but it seems that when it comes to free speech on a topic that can only be welcomed by members, a moderator decided unilaterally to delete the post without any explanation for the reason for doing so. Furthermore I have been banned from posting on the Forum without me being notified as to the reason for this!
I have not contravened any of the Terms & Conditions of the Forum.

As I have posted elsewhere in this blog, 'democracy does not fit well on the Isle of Man'.

Depositors have no quarrel with the people of the IoM

The exercise of democracy on the isle of Man is not one of its strongest virtues. Manx folk just want a quiet life to enjoy the prosperity that the world brings to its shores through deposits & investments. The dispossessed KSFIoM depositors are just an irritation to the government which claims that the effect of the loss of the bank has had no effect on the IoM economy and its AAA credit rating.

It is going to be in for a rude shock when it finds the world no longer considers this offshore centre a place on which they can bank with complete confidence.

The depositors have no quarrel with the people of the IoM; their gripe is directed at the directors & the FSC who failed to exercise due diligence in what they did that brought down the bank.

Manx folk need to wake up to the potential disaster that is going to affect the island's economy unless the government does the right & honourable thing to protect the well-being of the IoM, namely restore all deposits 100%

A Catalogue of Failures

Evidence to the independent Review of the Crown Dependencies has been submitted on behalf of the Kaupthing IoM Depositors' Action Group. This has been distributed widely to a number of key organisations. The evidence supports every reason why potential depositors should heed the warning:

Don't Bank on the Isle of Man

The DAG's evidence may be read here