15 OCTOBER 2008

Since I was appointed Liquidator Provisionally on 9 October 2008, my primary focus has been on trying to take control of and safeguard the assets of the company.

Communication

I know that all depositors are very worried about the status of their deposits. The bank, the Financial Supervision Commission and my office have been swamped with telephone calls, emails, faxes and mail seeking information. This has created serious practical difficulties, and I know that many of you were not able to get through on the telephone and/or have not yet had replies to your queries. I am sorry that this was the case, however, the number of telephone calls particularly has been unprecedented. The telephone system at the bank is now up and running and a team of bank staff are answering calls between 9am and 5pm. If you are unable to get through, please bear with us and try again later. Staff are also working through the backlog of emails, faxes and letters.

Going forward, 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.

Assets

My main responsibility as Liquidator Provisionally is to try and assume control of the company's assets. To this end I have:

• Taken control of bank balances totalling approximately £103,000,000 which are held with banks outside the group
• Contacted the Administrators of Kaupthing Singer & Friedlander Limited (the UK bank) with the purpose of recovering the assets which are with them. I have also instructed UK lawyers to assist me if necessary
• Instructed lawyers in Iceland with a view to enforcing the parental guarantee

Potential purchasers of assets

I have received a number of enquiries from parties who have expressed an interest in purchasing parts of the business. Some have expressed an interest in the customer deposits, however, the main interest has been in the loan book. I have already met with five of these parties and will be meeting more over the course of the next few days. It is still very early days and expressions of interest are a long way from making an offer. However I am pursuing these expressions of interest as a matter of great urgency.

Transfers in transit

There are a large number of transfers which left the bank but which have not reached their intended destinations as they have been frozen in the clearing system. I am in the process of trying to determine where they are in the system in an attempt to unfreeze them. I will advise further as soon as I am able.

I understand that this situation is most distressing for depositors and I will use this website to update depositors periodically on the progress of the liquidation. However, please be patient as some matters such as commercial negotiations will necessarily have to take place in private.


Mike Simpson

Liquidator Provisionally of Kaupthing Singer & Friedlander (Isle of Man) Limited