The government guarantee engineered a vast flood of "hot money" into SCF due to the fact that the deposits were government guaranteed.

Clearly, SCF was not in a position to rationally allocate all this money. Given, at the the time, SCF was held in high regard ... this money kept flowing
I can't buy that!

just because money carried the govt guarantee is no reason to keep on accepting it. The sensible course was surely to close the issue and withdraw the prospectus before the point was reached when money couldn't be "rationally allocated".