Stricken Icelandic bank Kaupthing is set to close its Birmingham office as it announced it would be suing the UK Government for forcing it into administration.
Well-known Birmingham financial figure Trevor Foster said he was to leave the company after more than two years as UK managing director, along with the majority of the staff at the Birmingham office.
About ten people will be losing their jobs when the office on Colmore Row closes on January 31, following the bank’s decision to consolidate activity at its UK subsidiary Kaupthing Singer & Friedlander (KSF) into the main office in London.
Mr Foster said: “It is with deep regret that we have had to take the difficult decision to close our Birmingham office with effect from the end of January. The office had been doing really well, prior to the bank’s administration, gaining some fabulous new clients.
“Client responsibilities will be managed centrally. The staff quality in Birmingham is first class, and I am sure they can secure a new future for themselves, even in these challenging times.”
Mr Foster is a popular figure in Birmingham, where he launched the regional office of KSF in Spring 2007. He has also held roles with Birmingham Forward and Marketing Birmingham in the past, and has chaired he judging panel for the Birmingham Young Professional of the Year awards.
He said KSF had put in plans to slim down the business “very significantly” over January, leaving just a core of staff running the banking and asset finance businesses. He added his own decision to leave had been a “mutual agreement” with the bank.
Kaupthing has been struggling for the last year after the collapse of the Icelandic economy. Its lawyers filed a lawsuit at the high Court in London yesterday attacking the way the UK Government insisted on putting the company into administration.
Iceland nationalised Kaupthing the day after KSF was put into administration, and still blames Britain for the collapse of the group. The Kaupthing lawyers will be asking for a judicial review to be carried out, which would mean the company could challenge the decision made by the Government. Shareholders in nationalised UK bank Northern Rock are using the same methods to call for their own review into the Governments actions.
Kaupthing claims the Government acted unlawfully by breaking the conditions of the Banking (Special Provisions) Act 2008, a piece of emergency legislation brought in after the Government had to move to save Northern Rock.#
The Kaupthing action comes after Icelandic prime minister Geir Haarde said the country had a better chance of success by backing KSF’s case than by pursuing its own action.