Liquidation delayed due to cash seizure

30 October 2008 0:18 am

KSFIOM was due to go into liquidation last Friday but this has been delayed until November 27 following pressure from the Manx treasury to allow more time for negotiations.

Isle of Man finance director John Spellman says the UK Government's seizure of £550m KSF UK assets is to blame for the Isle of Man protection scheme's "systematic failure".

Spellman says: "Until we have clarity on the return of assets from either the UK Government who seized the £550m of assets or the Icelandic government who guarantees them on the island, then liquidation would not be a sensible thing to do."

Last week, the Isle of Man government raised protection levels,funded by the industry from £15,000 to £20,000 for non-individual depositors covered under the 1991 scheme, including business and charities. This means that Sipp and Ssas investors will be protected up to £20,000 but nothing was included in the bolstered scheme to help offshore bond investors.

AJ Bell marketing director Billy McKay says the firm will be lobbying for Sipp and Ssas investors to be protected up to the UK individual protection limit of £50,000.

Chancellor Financial Management director John Smallridge says: "I do not see why there should be any distinction between a direct investment, a pension fund investment or an offshore bond investment. It could be the same person that has all three within the same bank but they are getting treated completely differently."

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