04 NOVEMBER 2008

Update since the Court hearing

As you may be aware at the Court hearing on 24 October 2008, the petition for winding up of the Bank was adjourned following indications from the Isle of Man Treasury that high level discussions were taking place between the UK Treasury (representing the interests of the Isle of Man) and the Icelandic government which now owns Kaupthing Bank h.f. I am not a party to those discussions and so am unfortunately unable to provide any further update in this regard other than to say that I understand that there is an ongoing dialogue.

In the meantime we are continuing to have discussions with a number of interested parties regarding a sale of all or part of the business. This process will continue over the next few weeks but given the confidential nature of those discussions it will be difficult for me to provide updates of a more detailed nature. As agreed at the Court hearing on 24 October, any sale will need the prior approval of the both the Isle of Man High Court and the Financial Supervision Commission.

Funds in transit - deposits of new funds made by customers after the date of my appointment

Since the date of my appointment as Liquidator Provisionally of Kaupthing Singer & Friedlander (Isle of Man) Limited ("the Bank") on 9 October 2008, I have been made aware of deposits from customers which have continued to be received into bank accounts in the name of the Bank. As the Bank had its banking licence suspended by the Financial Supervision Commission on 8 October 2008, it can no longer operate as a deposit taker in respect of new monies and as such arrangements need to be made to return these funds.

We have carried out a detailed reconciliation of the bank accounts concerned to identify those transactions which relate to new deposits from customers. This has largely been completed and in the next few days we will be making arrangements for the amounts to be returned to customers.

Funds in transit - payment requests made by customers prior to the date of my appointment

As at the date of my appointment, there were in addition a large number of payment transactions which had been requested by customers but which had not reached their payment destination. Over the last couple of weeks we have sought to clarify the precise position in respect of these transactions, including seeking legal advice. We will shortly be writing to the individual customers concerned advising them of the position, as we have been able to establish it from the information we have been provided with, and will post a separate notice on the website.

Customers with VISA cards

Following my appointment, the Bank's agreement with VISA Europe Limited has been terminated. Accordingly customers are advised that all VISA cards issued by the Bank have been cancelled and should no longer be used as a valid form of making payments. We have written to the customers concerned requesting that the cards are destroyed.

Statements

We will shortly be issuing statements to customers as at 30 September 2008 - this has been slightly delayed due to logistical difficulties. It is intended that statements as at 9 October 2008 will be issued in due course once we have completed the exercise of making sure the statements are up to date.

Contacts

As previously, the best way to make contact is to write to the bank or to email branch@singers.co.im. If you need to telephone the bank, please use the main switchboard number +44 1624 699222 but we would advise that we are continuing to experience a high level of calls and as a result there may be delays in answering the phones.

 

Mike Simpson

Liquidator Provisionally