22nd July, 2009
The Deputies of the States of Guernsey,
Sir Charles Frossard House,
St Peter Port,
Guernsey, GY1 1FH.
The Landsbanki Guernsey Depositors Action Group (LGDAG) is writing to you again as members find it worrying that 10 months after Landsbanki Guernsey (LG) was placed in administration, on 6th October 2008, the Chief Minister has persistently refused to answer our questions or provide an update on his political progress with the UK Ministry of Justice, UK Treasury and the Icelandic Government, to secure a solution to the ongoing hardship of the 1600 individual savers in Landsbanki Guernsey.
Below are bullet points covering the main issues which, where necessary, are referenced to expanded explanations further on in this letter.
- To clarify actions taken on behalf of LG depositors to date by the relevant authorities, LGDAG has used the Freedom of information Act to write to Her Majesty’s Ministry of Justice, responsible for constitutional issues concerning Guernsey and the other Crown Dependencies, to determine the level of interaction between Her Majesty’s Government and the Guernsey Government. ( For detail see Appendix 2)
- The Chief Minister’s stock answer is that all issues regarding the recovery of depositors money is the responsibility of the Joint Administrators and that the Guernsey Government is ‘supporting’ them in every way possible. There has been political input separate to Administrators efforts by every other Government which has affected savers.
- The lack of information has led LGDAG members to believe that the Chief Minister, who took responsibility to assist savers on himself very early in LG administration, without fully briefing Deputies, has done nothing but lead the public to believe that he has been, “working tirelessly behind the scenes”.
- If he has been working to recover the savings of the 1600 depositors who trusted the Guernsey banking system, why have there been no updates as to political progress whatsoever? The policy and update meetings, telephone calls and conversations he has made and to which he has alluded on several occasions, are surely not a secret? His last update was in answer to questions at the States meeting of 28th January 2009 (See Appendix 1)
- At a time when Her Majesty’s Ministry of Justice, in parallel with HM Treasury, should be ensuring that Iceland treats all depositors equally, the LGDAG feels that the fact that the discriminatory legislation passed by the Icelandic Government giving the UK preferential creditor status and recovery of up to 89% of the monies loaned, whilst Landsbanki Guernsey as ordinary creditor will get nothing, is hardly fair. Is this how Her Majesty’s government is representing LG savers?
Why has the Chief Minister allowed this to happen?
- As you are aware, as a result of the Icelandic Government’s approval of this legislation the depositors in of LG have now voted overwhelmingly to start legal action against Iceland. This action will be at the savers’ own cost. If the Chief Minister had stood up for the savers in LG from the offset then perhaps this further stress and cost to the depositors, many of whom are pensioners, could have been avoided.
What exactly has Guernsey’s Government been doing to ensure that the Landsbanki Guernsey Depositors receive ‘fair and equitable’ treatment?
Telephone calls are often undocumented but official face-to-face meetings with minutes are the normal professional record but inexplicably, there do not appear to be any.
At a time when every other Government is working towards ensuring that their depositors have been fully refunded, is it not time for the Chief Minister to answer quite clearly and in a mature manner precisely what the States of Guernsey has achieved to assist the savers of Landsbanki Guernsey and to engage in proactive dialogue with the creditors of LG together with the relevant national and international authorities?
You, as Deputies should be questioning the lack of precise information emanating from our Chief Minister as to exactly what he is doing and has done, politically, to resolve this sad situation.
We leave you with a recent comment by Allan Bell MHK, IoM Treasury Minister. “If the Isle of Man stood by and did nothing, that would be irresponsible. It’s a short term loan and ultimately we will get the bulk of this money returned to our reserves”
For and on behalf of
Landsbanki Guernsey Depositors’ Action Group
On Wednesday 28th January 2009, at the States Meeting the following is recorded:
Deputy Rhoderick Matthews Q1: “Are you able to give details of worthwhile assistance, actually given, to assist the plight of Landsbanki Depositors?”
Chief Minister Deputy Lyndon Trott: “It must be clearly understood that, short of committing significant sums of taxpayers’ money, the only part of assistance that can be given by Government, is to support the work of the court-appointed Administrator and the Guernsey Financial Services Commission. This is where the Policy Council’s efforts have been focused and will continue to be so unless otherwise directed by this Assembly. I have spoken to the Icelandic Finance Minister on four separate occasions. I have spoken to the Icelandic Ambassador to the EU and senior officials from his Mission and the Icelandic Ministry of Foreign Affairs on two occasions, together with senior staff I’ve had discussions with politicians and officials and her Majesty’s Treasury on twelve occasions.”
“One specific outcome of our dialogue has been clarification of Her Majesty’s Treasury’s support, and action in assuring that the Icelandic Authorities treat all creditors equally. This has been confirmed by the Economic Secretary to the Treasury in response to a Parliamentary question of 23rd January.”
“A further material outcome is that her Majesty’s Treasury is assuring that the Icelandic Authorities are fully aware of the call of the Guernsey Financial Services Commission for Landsbanki Islands hf to honour its public undertaking of support for its Guernsey subsidiary. This action has our full support.”
LGDAG in evaluating the above response has the following comments:
Re: The Icelandic Finance Minister, Arni Mathiesen: the Chief Minister wrote to him on 22nd October 2008 seeking his support and then met him on the 28th October 2008, while at a Tax Information Exchange and, received Mr Mathiesen’s mobile ‘phone number.
Deputy Trott received a reply to his letter stating that Mr Mathiesen had asked the Resolution Committee to delve into matters that related to the Landsbanki Guernsey Parent Guarantee.
Did the Chief Minister follow up on this?
Mr Mathiesen lost his job at the end of January 2009 when the Icelandic Government changed. Has the Chief Minister ensured his renewal of the relationship with Iceland by personally contacting the new Finance Minister, Mr Steingrimur J Sigfussand, and followed up where he left off?
Conversations with The Icelandic Ambassador to the EU & Senior Officials appear to have had no effect whatsoever. The LGDAG has requested the Icelandic Ambassador to Great Britain and Northern Ireland to ask his Government for records of any submissions or meetings held with the Chief Minister and his team regarding Landsbanki Guernsey, to date none have been produced.
Re: Meeting Her Majesty’s Treasury on twelve occasions. These meetings have not galvanised HMT to intervene on LG’s behalf in respect of the emergency legislation approved by the Icelandic Government which makes HMG a ‘preferential’ and LG an ‘ordinary’ creditor. This is despite HMG’s approval of the IMF aid package to Iceland, the terms of which clearly state that all creditors are to be treated in a ‘fair and equitable’ manner. The LGDAG has requested the Chief Minister clarify the Guernsey Government’s political efforts to rectify the situation with UK Treasury which is meant to be representing Guernsey’s interests. To date only indeterminate replies have been received.
The following reply was received on 15 July 2009 under the Freedom of information act, and although largely redacted due to secrecy laws, it indicates that the Guernsey Authorities have made absolutely no representation to, or met with, the Ministry of Justice to discuss Landsbanki Guernsey since September 2008, i.e. since before the bank was placed in administration.
Q: That the Ministry of Justice disclose information on the actions that are being undertaken on behalf of the depositors of Landsbanki Guernsey by the Ministry of Justice and the States of Guernsey?
Reply: I can confirm that the Ministry of justice does not hold any information that falls within the scope of this request.
Q: That the Ministry of Justice disclose the dates of meetings between the Ministry of Justice and a) The Treasury, b) The States of Guernsey, c) the Icelandic Government, which related to the depositors of Landsbanki Guernsey, since September 2008.
Reply: I can confirm that no such meetings took place in the period September to 30th March 2009.
Q: That the Ministry of Justice disclose copies of communications between the Ministry of justice, The Treasury & The States of Guernsey in relation to the depositors of Landsbanki Guernsey and the collapse of Landsbanki.
Reply: I can confirm that the department holds information that falls within the scope of this request, however in my opinion, this information is exempt under section 36 and 27 of the freedom of information act.
The LGDAG has subsequently submitted an appeal for internal review of this decision.
Q: That the Ministry of Justice disclose the minutes of meetings held by the Ministry of justice to discuss the collapse of Landsbanki (Guernsey) and the depositors of landsbanki (Guernsey)
Reply: I can confirm that the Ministry of justice does not hold information that falls within the scope of this request.