KSFIOM compensation to cost £193m

Some depositors had opposed the scheme of arrangement

Compensating depositors in the failed bank Kaupthing, Singer and Friedlander Isle of Man (KSFIOM) is expected to cost £193m, documents show.

Customers of the bank can claim payments of up to £50,000 under the depositor compensation scheme (DCS).

KSFIOM was put into liquidation in May after creditors rejected an alternative scheme put forward by the government.

Treasury minister Allan Bell will ask Tynwald on Tuesday to authorise the release of the £193m.

Tynwald order papers show the cash is needed from government reserves to meet the anticipated cost of the DCS.

Under the DCS, savers are eligible to receive up to £50,000 of what they have lost, plus any other money the liquidator is able to recover.

The High Court heard that tens of millions of pounds was held in the UK and frozen by the government during the crisis that engulfed KSFIOM's Icelandic parent bank, Kaupthing.

It is not yet known how much of this money, if any, will be returned to the provisional liquidator.

During the same Tynwald sitting, Douglas North MHK Bill Henderson is to ask the Chief Minister to make a statement on the current legal position on the frozen funds.

He will also ask what "representations and negotiations are continuing in an effort to reclaim what is ostensibly another jurisdiction's fund".