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Tynwald to be asked to authorise £180 million for KSF IOM Scheme of Arrangement 17 March 2009 TREASURY Minister Allan Bell MHK will this week ask Tynwald to authorise the transfer of £180 million from Government reserves to put funding in place for the proposed Scheme of Arrangement for depositors with Kaupthing Singer & Friedlander Isle of Man. The sum includes an advance on contributions that would be required to be levied from the banking sector. Total direct provision from Government would be expected to be £150 million, though the eventual net cost to Government would be lower after recoveries made during the course of the Scheme. The Scheme of Arrangement - which would make guaranteed scheduled payments to depositors underpinned by Government - is subject to approval by the High Court and by the bank’s creditors. The matter is next due in the High Court on April 9. Minister Bell explained: ‘The motion to the March sitting of Tynwald this week is really to confirm support for Government funding if the Scheme of Arrangement gets the go-ahead. This underlines Government’s commitment to the Scheme as the best way forward for depositors.’ The Scheme has been developed by Treasury as a tailored alternative to conventional liquidation of the bank, which would trigger the Depositors Compensation Scheme (DCS). Government’s proposed £150 million support for the Scheme of Arrangement is at the same level as the contribution it can make to the Depositors Compensation Scheme under amendments to the DCS approved by Tynwald in October last year. Government funds advanced to depositors under the Early Payment Schemes approved by Tynwald in January and February – providing for a total of £105 million in early payments – will be deducted from any subsequent payments made under either the Scheme of Arrangement or DCS. Further amendments to the DCS also going before Tynwald this week will clarify this point in law. More stories >>>
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