Savers with Kaupthing Singer & Friedlander Isle of Man could receive a £1,000 hardship payment if the Manx parliament approves a proposal being debated this week.
The Isle of Man government has put forward an early repayment scheme which would pay each account holder £1,000 early in the New Year if the island’s parliament, the Tynwald approves. The Manx government has asked for £11m to be released from its reserves to fund the payout.
“This initial payment may be modest, but for the smaller depositors and those experiencing hardship it could make a difference,” said Allan Bell, Manx Treasury Minister. “If Tynwald supports the scheme in principle this week we hope it can start fairly soon in the New Year.”
However, David Greene, partner in law firm Edwin Coe and representing the Kaupthing Singer & Friedlander Isle of Man Depositors Action Group, said the payment is just “a drop in the ocean”.
“For those thousands of savers that have suffered financial losses this is not enough,” said Mr Coe. “It is just a token gesture and it does not take away from the fact that the government’s actions are delaying the compensation scheme from paying out.”
Around 8,000 savers have over £821m trapped in KSF IoM, which collapsed along with Iceland’s banking sector in October. The bank and savers are waiting while the Manx government, administrators and consultants Alix Partners work on alternatives to liquidating KSF IoM.
The Manx High Court has adjourned the liquidation hearing until 29 January, with a progress report expected on 15 January.
The Isle of Man government said the Depositor Protection Scheme could return 100 per cent of deposits to 76 per cent of the Kaupthing savers. The Depositor Protection Scheme only protects the first £50,000 on deposit and will not cover consumers who deposited money via offshore bonds.
“I would like to reassure all depositors that the Isle of Man Government is still working very hard to reach an overall solution that will maximise and expedite payouts,” said Mr Bell.
Details of the Early Payment Scheme - including how it will operate and how to make a claim - will be finalised and published in due course, subject to approval.
