The guarantee offered by the collapsed Kaupthing bank in the Isle of Man to attract customers, was not examined by the Financial Supervision Commission.
There has been an outcry among depositors fighting to win back their money, after a court in Reykjavik ruled this week that the parental guarantee offered by Kaupthing Iceland to its Manx subsidiary, was not valid.
That's because it was never authorised by the Kaupthing board.
FSC chief executive John Aspden says although KSF in the Island touted the guarantee to win clients, it was not required by the commission and so was never closely scrutinised (play audio file):
Mr Aspden says the liquidator had not assumed it would recover money under the guarantee.
As a result, the invalid guarantee may not affect the final sum recovered, currently estimated at up to 97p in the pound.
Researching your Manx family history can be a very interesting and rewarding hobby. Trace your roots in the Isle of Man with our helpful of guide.
