Iceland

Provisional approval received from the Central Bank of Iceland

Posted 13/11/2015 - 13:48 by anrigaut

2015-11-12 (All day)

On 12 November 2015, Kaupthing received a formal response from the Central Bank of Iceland (“CBI”) to the request submitted by Kaupthing to the CBI on 21 October 2015 for certain exemptions from the Foreign Exchange Act (the “October 2015 Exemption Request”), as announced on Kaupthing´s public website on 28 October 2015, giving its provisional approval to that request.

In its response, the CBI stipulates that the adjusted stability contribution described in the October 2015 Exemption Request as a precondition to the granting of the requested exemptions (the “Revised Stability Contribution”) will not jeopardise financial stability and that the requested exemptions will be granted subject to, among other things, Kaupthing´s proposed composition being approved by the Icelandic courts, .....

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Plan to lift capital controls: crunching the numbers… again

Posted 08/11/2015 - 18:22 by anrigaut

2015-11-08 (All day)

In the case of Glitnir there was a retrade – the numbers have been renegotiated since the June plan. The government has talked effusively about clarity and transparency in liberalising capital controls but the process of introducing such a plan has been characterised by obfuscation and opacity. The plan seems sensible but earlier promises by the prime minister’s party, the Progressives, of gigantic windfall seem to have pushed the government to play a game of make-believe, smoke and mirrors. Selling the banks will prepare for the coming years: drumming up the fear of foreign investors masks the fact that the greatest danger is the mind-set of the boom years.

The press conference October 28, to introduce the assessment made by the Central Bank of Iceland, CBI of the draft proposals from Glitnir, Kaupthing and LBI, was a very low-key event.............

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Kaupthing launches its composition proposal

Posted 28/10/2015 - 20:53 by anrigaut

2015-10-28 (All day)

Creditors have previously indicated that the implementation of a composition proposal, as opposed to bankruptcy proceedings, is the preferred route to achieve distributions from the Kaupthing estate. ....

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Today, the CBI announced that it has concluded that the Revised Stability Contribution satisfies the requirements set forth in the Foreign Exchange Act, and that the fulfilment of the composition agreement together with the proposed countervailing measures will not jeopardise monetary, exchange rate or financial stability, which are the conditions for providing the necessary exemptions from currency control restrictions.

Kaupthing now awaits a formal response from the CBI to the October 2015 Exemption Request. Once the exemptions contemplated by the October 2015 Exemption Request are granted by the CBI, Kaupthing will be able to make payments to its unsecured creditors pursuant to an approved composition agreement, subject to making the Revised Stability Contribution in favour of the CBI, or other such entity as the CBI may designate. Kaupthing will provide creditors with an update on the progress of the exemption application in due course.

Composition launched

On Friday, 23 October 2015, Kaupthing gave notice to its creditors of the launch of its composition proposal by making the proposal document and related information memorandum available to those creditors which are entitled to vote on the composition proposal according to the Act on Bankruptcy (No. 21/1991), via its secure website ...

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Kaupthing is convening two open creditors’ meetings in November 2015, including (i) an open creditors’ meeting on or around 11 November 2015, to provide an update on the composition process and seek creditors’ support in relation to the making of the Revised Stability Contribution and (ii) if that is supported, a second open creditors’ meeting on Tuesday, 24 November 2015 to vote on Kaupthing’ composition proposal.

The Winding-up Committee is, as ever before, committed to do its utmost to ensure that the winding-up proceedings can be concluded through an approved composition agreement before the year end, subject to the Revised Stability Contribution and the composition proposal being supported by the requisite majority of creditors in creditors’ meetings and subject to the CBI granting the necessary exemptions from currency control restrictions.

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Iceland Bank Creditors Strike Deal to Sidestep Capital Controls

Posted 28/10/2015 - 20:30 by anrigaut

2015-10-28 (All day)

Iceland’s Finance Minister Bjarni Benediktsson and the island’s central bank approved proposals from creditors of Kaupthing Bank hf, Glitnir Bank hf and LBI hf that will allow them to sidestep capital controls and avoid a 39 percent tax on all their assets.

The banks’ winding up committees now need to take the accord back to the creditors for approval. The individual composition agreements will then need to be ratified by the court in Reykjavik, Benediktsson told reporters on Wednesday. It’s the "largest economic operation we’ve ever undertaken," he said.

The agreement will need court approval by March 15. Iceland imposed capital controls after its three biggest banks defaulted on a combined $85 billion in October 2008. The collapse forced the north Atlantic island to seek a $4.6 billion emergency package that was led by the International Monetary Fund.

According to central bank Governor Mar Gudmundsson, the deal fulfills Iceland’s condition of not jeopardizing monetary policy, the exchange rate, or financial stability. The krona has gained about 8 percent against the euro in the past year as the central bank has raised rates to guide the economy through the challenges it faces.

Once this stage of the bank creditor settlement is finished, the country can move to the next phase, which is to lift capital controls on the rest of the population and corporations, he said.

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Central Bank of Iceland concludes assessment of preliminary composition proposals

Posted 28/10/2015 - 20:16 by anrigaut

2015-10-28 (All day)

Reference is made to announcement made today by the Ministry of Finance and Economic Affairs and the Central Bank of Iceland where it is stated that “in the opinion of the Central Bank of Iceland, the draft composition agreements submitted by the estates of the three failed banks satisfy the requirements set forth in the Foreign Exchange Act, in that the implementation of the composition agreements together with the proposed mitigating measures will not jeopardise monetary, exchange rate, or financial stability. This is stated in the Central Bank's report on the settlement of the failed banks' estates on the basis of the stability conditions.” ...

Note: The English translation of the Introduction to the CBI Report concludes "In view of the above, the Central Bank recommends that the Minster of Finance and Economic Affairs approve the exemptions that the Bank wishes to grant to the estates."
http://www.cb.is/library/Skraarsafn---EN/Capital-control-liberalisation/...

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26 bankers already sentenced to a combined 74 years in prison

Posted 15/10/2015 - 12:41 by anrigaut

2015-10-13 23

In two separate rulings last week, the Supreme Court of Iceland and the Reykjavík District Court sentenced three top managers of Landsbankinn and two top managers of Kaupþing, along with one prominent investor, to prison for crimes committed in the lead-up to the financial collapse of 2008. With these rulings the number of bankers and financiers who have been sentenced to prison for crimes relating to the financial collapse has reached 26, and a combined prison time of 74 years.

Former managers of Kaupþing top the list.
Eleven former bankers have been sentenced to four and a half years or more in prison. .....

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Kaupþing bosses found guilty of massive embezzlement of bank funds

2015-10-08 23

Hreiðar Már Sigurðsson, the former CEO of failed Icelandic bank Kaupþing, Magnús Guðmundsson the former CEO of Kaupþing Luxembourg and investor Skúli Þorvaldsson were found guilty earlier today by the Reykjavík District Court for embezzlement and cover-up.

Guilty of embezzlement and cover-up
The local news site visir.is reports that Hreiðar Már and Magnús were found guilty of having fraudulently transferred 6 billion ISK (48.2 million USD/42.4 million EUR) to Marple Holdings, a company owned by Skúli, and for having purchased Kaupþing bonds from the same company at above market value. The District Court ruled that through these transactions Hreiðar Már and Magnús embezzled nearly 8 billion ISK (63 million USD/56 million EUR) from Kaupþing by transferring them to Marple holdings. Skúli was sentenced for having covered up the crime as the listed owner of Marple holdings. At previous stages of the case he had denied any knowledge of the company.

Hreiðar was sentenced to six months in prison, Magnús to 18 months and Skúli to six months. The three were also sentenced to pay the estate of Kaupþing damages. The fourth defendant, Guðný Arna Sveinsdóttir, the former CFO of Kaupþing, who had been charged with participation in the embezzlement was acquitted by the District Court.
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Three Landsbanki managers sentenced to jail

2015-10-07 23

The Icelandic Supreme Court has sentenced (in Icelandic) three ex-managers of Landsbanki to jail sentences. Two of them – the bank’s CEO Sigurjón Árnason and director of corporate lending Elín Sigfússdóttir – had earlier been acquitted by Reykjavík District Court. The Supreme Court sentenced the two to respectively 3 1/2 years prison and 18 months prison. The third manager, Steinþór Gunnarsson director of proprietary trading had been been given a nine months suspended jail sentence, which the Supreme Court turned into nine months in prison.

The case was yet another example of bankers being convicted for breach of fiduciary duty, i.e. causing losses by fraudulent lending where laws and the banks own rules were broken. In this particular case over ISK5bn were lent to Ímon, a company with no assets except the Landsbanki shares bought for the fraudulent loans from Landsbanki in the days before the bank collapsed.

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With this sentence, top managers from both Landsbanki and Glitnir have been sentenced to prison. There are still on-going cases against Glitnir managers.

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Judge Will Not Be Forced To Leave Trial Over “Lack Of Impartiality” Accusations

Posted 07/10/2015 - 12:30 by anrigaut

2015-10-06 23

Reykjavík District Court has dismissed a request that a judge in the so-called Marple Case recuse himself for allegedly lacking impartiality on the matter.

Kjarninn reports that Hörður Felix Harðarson, the lawyer for former Kaupþing director Hreiðar Már Sigurðsson, filed a motion with the Reykjavík District Court that one of the judges in the case, Ásgeir Brynjar Torfason, recuse himself from the trial. The motion was filed on the grounds that Felix believes Ásgeir cannot exercise impartiality in the case.

The allegations are based on Ásgeir’s involvement with Gagnsæi, an anti-corruption group, as well as for his posts and “Likes” on social media with news stories related to the case.

Vísir reports, however, that this motion has been denied by the court. Hreiðar could appeal the matter to the Supreme Court after the District Court passes its verdict, which is expected this Friday.
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Former CEO of Kaupþing bank wants judge to recuse himself ...

Posted 07/10/2015 - 06:36 by anrigaut

2015-10-05 23

Lawyers for former CEO of failed Kaupþing bank want a judge to recuse himself from a case involving allegations the managers of Kaupþing fraudulently transferred large sums to a company called Marple Holdings and for a subsequent purchase of bonds from the company. The Special prosecutor alleges that all in all the accused fraudulently transferred 8 billion ISK (63 million USD/56 million EUR) to the company in 2007-8.

Embezzlement, fraud and breach of trust
The Special Prosecutor has charged Hreiðar Már Sigurðsson, the former CEO of Kaupþing, and Guðný Arna Sveinsdóttir, the former CFO of Kaupþing, with embezzlement in the case, Magnús Guðmundsson the CEO of Kaupþing Luxembourg for participating in the embezzlement and Skúli Þorvaldsson, investor and the listed owner of Marple Holdings, for cover-up. The former Kaupþing bosses have claimed innocence while Skúli has denied having actually owned the company.

Now the lawyers of Hreiðar Már have requested one of the judges in the case, Ásgeir Brynjar Torfason, recuse himself the local news site visir.is reports. The lawyers believe the judge cannot be considered impartial due to several Facebook likes, Twitter posts, an anonymous blog post they allege was written by Ásgeir and his work for a non-profit which fights corruption. The Reykjavík District court will consider these demands today.

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The case is the latest in a series of high-profile cases against the former managers of Kaupþing. Earlier this year the Supreme court of Iceland sentenced Hreiðar Már and Magnús to prison for 5,5 years and 4,5 years in prison respectively for market manipulation. Seven top managers of Kaupþing were sentenced by the Reykjavík District Court in a second market-manipulation earlier this summer.

The Reykjavík District court will hand down its verdict in the current case on Friday, 9 October.

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