Hopes soar for return of millions frozen in banks
PUBLISHED: 16:40 22 April 2009 | UPDATED: 10:38 23 August 2010
COUNCIL bosses hope to recoup within months £14million of taxpayers money frozen in the collapsed Icelandic banking system. Administrators for Heritable Bank Ernst and Young said its creditors, which include Kent County Council (KCC), could get up to 80
COUNCIL bosses hope to recoup within months £14million of taxpayers' money frozen in the collapsed Icelandic banking system.
Administrators for Heritable Bank Ernst and Young said its creditors, which include Kent County Council (KCC), could get up to 80 per cent of invested funds back by July.
Last October, the Reporter revealed that KCC had invested £50million of taxpayers' money in the collapsed Icelandic banking system - £15million in Glitnir, £17million in Landsbanki and £18million in Heritable Bank.
If the projections, announced on Friday, prove to be accurate the council could be on track to recoup around £14million of the £18million invested in Heritable, with Ernst and Young expecting to make the first payments in late July or early August.
Paul Carter, leader of Kent County Council, said: "We have received a full report from Ernst and Young, the administrators of Heritable Bank, that their projections indicate a return to creditors of the Heritable Bank of between 70 pence and 80 pence in the pound. This is in stark contrast to the recent gloomy predictions that creditors would only get between 0.5 pence and 9.5 pence in the pound.
"We, along with 122 other local authorities, the Audit Commission, Transport for London, the Metropolitan Police, Cambridge University, two health trusts and many others, had money in Icelandic banks. This is the first tangible result from the work we have done to get this money back, which could be returned to KCC from July onwards."
Ernst and Young further reports that if economic conditions improve it is possible that an even larger proportion of the money could be recovered.
The council says the situation regarding the additional £32million deposited in Glitnir and Landsbanki is "looking most positive".
KCC is being treated as a preferred creditor and indications are that a substantial amount of the money will be recovered.