Kaupthing's Lawyers Request Reykjavik's Help to Recover $US830,000m From HMG

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2008-10-23 23

24/10/2008 | 13:10

Lawyers hired by the executives of the old Kaupthing Bank requested a meeting with the trade commission of Iceland’s Althingi parliament yesterday, proposing that the government provide funds so that Kaupthing can sue the British government.

“Whether the government will participate in this case in some way has simply not been decided,” chairman of the trade committee Ágúst Ólafur Ágústsson told Fréttabladid.

As revealed in an earlier report on this matter, British lawyers who are preparing the lawsuit on behalf of Kaupthing believe that the bank may be entitled to ISK hundreds of billions in compensation (ISK 100 billion = USD 830 billion, EUR 670 billion).

They estimate that there is a good chance that the executive order of the British Chancellery on October 8 with regard to Kaupthing Bank be declared unlawful. They also believe that British authorities may be found guilty of misfeasance in public office and negligence.

“It is not only about money, because we Icelanders also have a possibility to reclaim our self-respect with this lawsuit,” said Reykjavík Economics MD Magnús Árni Skúlason, who is cooperating with the British lawyers on this case.

“The lawyers believe we have suffered injustice and that needs to be investigated. At the same time we would be improving our image, which the British government has damaged,” Skúlason added.

Jón Daníelsson, an Icelandic economics professor at the London School of Economics (LSE), said in an interview on RÚV’s news magazine Kastljós yesterday that it is highly unlikely that Kaupthing Bank would have gone bankrupt had it not been for the actions of British authorities. They should therefore be taken to court.

Click here to read more about the development of the relations between Icelandic and British authorities and here to read a transcript of a conversation between Icelandic Minister of Finance Árni M. Mathiesen and UK Chancellor Alistair Darling, which is said to have sparked the actions of British authorities against Kaupthing Bank on October 8. Click here to read about a lawsuit being prepared by the Icelandic government against British authorities.