The Icelandic bank Kaupthing, which owns the UK-based private investment manager Kaupthing Singer & Friedlander, has accused London hedge funds of trying to drive it towards bankruptcy for their own profit, according to UK press reports. The bank claimed the hedge funds deliberately spread false rumours about financial difficulties at Icelandic banks to make profits on complex financial investments. Kaupthing chairman Sigurdur Einarsson told the Reykjavik newspaper Frettabladid: “It looks like four hedge funds have mainly led this run.” Mr Einarsson named the funds, including one of the largest in Europe. The identities were also reported on the website Iceland Review until pressure from one of the hedge funds led to their removal. A spokeswoman for Kaupthing refused to expand on the allegations: “We have said what we have said and have nothing else to say.” Three of the hedge funds declined to comment. The fourth issued a vigorous denial of any wrongdoing and said it had handed its trading record in Icelandic stocks to the Financial Services Authority, the UK financial regulator, to prove its innocence. The claims of deliberate market abuse against Kaupthing come less than a month after UK bank HBOS saw its shares slump, leading to claims of a conspiracy - the accusations are being investigated by the FSA. A similar investigation is under way in Iceland over its banks.