The City watchdog was warned that Icelandic bank Kaupthing was not “fit and proper” to run the UK bank Singer & Friedlander, British MPs were told today.
Tony Shearer, former chief executive of Singer & Friedlander (S&F), said he contacted the Financial Services Authority about his doubts in April 2005 during the takeover of the group by Kaupthing.
He said he and fellow directors took "every step that they thought was reasonable" to alert the FSA that they did not think Kaupthing was "fit and proper to run a UK bank".
Overall, five of the seven members of the board made their concerns known in some way.
Mr Shearer told the Treasury Select Committee he left the bank at the end of November 2005 because he was not happy to continue as chief executive under the ownership of Kaupthing.
He said he first became concerned after looking at Kaupthing's public accounts, concerns that he passed on to the FSA, while he also had reservations after meeting the people in charge of the group.
He said: "These were not people that I wanted to work with. I had serious doubts about them right from the start."
PA