Iceland’s Financial Services Authority has taken control of Kaupthing Bank following the resignation of all of its board.
Chairman Sigurdur Einarsson said that the bank had asked the Icelandic FSA to take control of the bank this morning. The FSA has now appointed a winding-up committee, which wields all the authority of the board of directors.
He said that the aim of the action was to “ensure adequate activities of the bank in Iceland and the stability of the Icelandic financial system”.
The bank is owed £230m on the NOHO square development in London managed by Nick and Christian Candy. Kaupthing has also lent $240m (£139m) on a luxury residential scheme on Rodeo Drive in Los Angeles being run by the Candy Brothers
Einarsson also this morning hit out at the UK Treasury’s decision to put its UK arm into administration.
In his lengthy statement to the London Stock Exchange, Einarsson said that Chancellor of the Exchequer Alistair Darling had put Kaupthing Singer & Friedlander into adminstration following the Icelandic FSA’s seizure of Landsbanki. He said this was despite the “fundamental difference” between the two.
“Kaupthing Singer & Friedlander was subsequently placed in administration,” said Einarsson, “and Kaupthing Bank’s creditors pointed out that this situation represented an event of default according to the parent company’s loan agreements and was therefore a technical default.”
He added: “It did not matter that the parent company had sufficient liquidity and its position was solid.”
Einarsson said that the liquidity position of its UK arms was “probably the best of any bank in the United Kingdom”.
