Kaupthing takeover of Singer & Friedlander: Financial regulator was 'warned'

Posted 04/02/2009 - 00:40 by Hoping and coping

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2009-02-03 16

MPs will open a detailed investigation into the takeover of the Singer & Friedlander Group by Kaupthing, the Icelandic bank, after a former Singer & Friedland executive revealed yesterday that he had warned financial regulators about the deal in 2005.

At a Commons Treasury Select Committee hearing yesterday, the Financial Services Authority (FSA) also came under pressure to explain the role it played in the collapse into administration of Kaupthing Singer & Friedlander (KSF).

The bank's collapse left thousands of savers with its Isle of Man and Guernsey branches out of pocket after the Government refused to help savers with offshore accounts.

John McFall, the committee's chairman, said that he would write to former Singer & Friedlander executives for further testimony after Tony Shearer, the bank's former chief executive, told the MPs that he had asked the FSA to block Kaupthing's takeover of his bank, warning that the Icelandic bank's directors would not be “fit and proper” owners.

The FSA, which told the committee that it had made a full assessment of Kaupthing and had been told by Iceland's regulators there was no reason to block the deal, will appear before the committee again on February 25 with a more detailed testimony.

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The administration, sanctioned by the FSA, left more than 8,000 savers in the Isle of Man out of pocket. Britain initially refused to guarantee depositors' savings. The Icelandic Government subsequently sued the UK, in a case that is ongoing.