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UBS rejects accusations by Fagan

Ed Fagan at a press conference in Zurich presenting his ultimatum to UBS Keystone

The Swiss banking giant UBS had until Friday to respond to an ultimatum by a United States lawyer over its ownership of a chemicals firm, which once belonged to Germany’s IG Farben.

This content was published on January 9, 2004 - 14:04

US lawyer, Edward Fagan, is threatening to sue UBS for more than SFr2 billion if the bank fails to open negotiations.

Fagan wants UBS to pay back money which the US government paid to a former subsidiary of the defunct IG Farben. That company made gas which killed Nazi concentration camp prisoners.

The Union Bank of Switzerland, which merged with the Swiss Bank Corporation to form UBS in 1998, acquired the subsidiary, Interhandel, in 1967.

"There is no basis for these claims against UBS,” Christoph Meier, a spokesman for the bank, told swissinfo.

Meier said that a court in Germany had turned down similar claims back in 1988.

Fagan – who says he will sue UBS in the US - is representing German lawyers overseeing IG Farben, which filed for bankruptcy in November.

“I asked for €1.8 billion (SFr2.82 billion) which represents $122 million valued in 1964 with an interest rate of five per cent per annum,” Fagan told a news conference last December.

Rightful owner

Fagan says IG Farben, and not Interhandel, was the rightful owner of the American affiliates, which is why UBS should hand over the money the Swiss subsidiary received from the US government.

In 1964 the US and Switzerland reached an agreement on Interhandel, which left the US with 60 per cent of the affiliates and the Swiss with 40 per cent.

The value of that share was SFr122 million at the time, which the US paid to Interhandel.

In a 2001 study, an Independent Commission of Experts (ICE) probing Switzerland’s wartime role found no evidence that IG Farben and Interhandel kept a business association after 1940.

Forced labour

Fagan has also says that IG Farben employed tens of thousand of forced labourers under the Nazi regime, and that they could have a right to the company’s assets.

“I am here to get back these funds. It is up to the trustee to decide where they have to go but I think they should go to the victims of the Nazi regime,” Fagan said.

IG Farben ceased operations at the end of the Second World War, but only declared bankruptcy last November. Its shares are still traded on the German stock market.

Fagan is a controversial figure in Switzerland, where he is known for his role in winning a $1.25 million settlement from Swiss banks, including UBS, over dormant Holocaust-era accounts.

swissinfo, Karin Kamp

Key facts

IG Farben was founded in 1925.
Up until 1945 it was the world number 1 in the chemical industry.
IG Farben is accused of having employed tens of thousand of forced labourers under the Nazi regime.
IG Farben ceased operations at the end of the Second World War.

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