Iceland

Iceland: The plan for abolishing capital controls is… er, a “no-plan”

Posted 12/09/2013 - 09:14 by anrigaut

2013-09-11 23

Again and again prime minister Sigmundur Davíð Gunnlaugsson has been asked about his exact plans for the abolition of the capital controls. But so far, it is entirely unclear how the government plans to proceed on debt relief, the estates of Glitnir and Kaupthing, the issues concerning Landsbanki and ultimately the abolition of the capital controls. There are by now some indications that the two coalition parties find it difficult to advance on these issues because the two parties disagree much more fundamentally than has appeared hitherto. ...

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Clear what the creditors want – unclear what the government wants

During the election campaign earlier this year Bjarni Benediktsson leader of the Independence Party and now minister of finance repeatedly said that abolishing the capital controls was easy and would not take long. That might be true if there were a plan in place to abolish them. That plan does not seem to exist – or at least, nothing credible has been heard of it.

The Central Bank of Iceland has clearly done extensive work in terms of clarifying the macro economic aspects of the economy. The estates of Glitnir and Kaupthing, as well as the creditors have also done extensive analysis of the financial situation of the estates.

The prime minister has indicated that he is now waiting for the creditors to make a move. However, he seems to ignore that the creditors have already made a move: both Glitnir and Kaupthing have presented a detailed draft of composition to the CBI – but so far no answer. It is abundantly clear to the CBI what the creditors want. The only unclear thing is what exactly the government wants to do and how it wants to proceed.

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Iceland Court Rules Kaupthing Executive Helgason to Repay Loan

2013-05-01 23

An Icelandic court ruled that a former executive of failed lender Kaupthing Bank hf must repay loans given to him by the lender to buy its shares.

Ingolfur Helgason, the ex-head of Kaupthing’s Icelandic operations, is personally liable for the 1.1 billion-krona ($9.5 million) loan the bank extended to him for purchases, according to the ruling announced today by the Reykjavik District Court. ...

See also here: http://grapevine.is/Home/ReadArticle/Court-orders-bank-mogul-to-pay-up

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Al-Thani Case Most Likely Postponed by Ten Months (updated)

Posted 24/04/2013 - 16:03 by anrigaut

2013-04-23 23

The trial of the Al-Thani case will most likely be postponed by ten months because defense lawyers Gestur Jónsson and Ragnar H. Hall resigned from the case against the judge’s wishes. The judge met with the prosecutor and new defense lawyers on Monday.
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Update 25 Apr: Now scheduled to begin on 21 0ct under a new judge (and new defence lawyers):
http://uti.is/2013/04/yet-another-unexpected-turn-in-the-al-thani-case/

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Nine Former Kaupthing Employees Indicted

Posted 24/04/2013 - 15:49 by anrigaut

2013-04-23 23

Charges were filed against nine former Kaupthing employees in Reykjavík’s District Court this morning, Vísir reports.

The nine men are accused of market abuse and breach of trust in the lead up to the bank collapse in October 2008. This particular case first emerged in April and was reported to be one of the largest of its kind, but it is in fact five different cases combined into a single charge.
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For further details see here: http://www.reuters.com/article/2013/04/24/iceland-bankers-idUSL6N0DB3DV2... and here: http://uti.is/2013/04/iceland-prosecuting-alleged-major-financial-fraud-...

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The latest on the al Thani case

2013-04-13 23

Instead of starting the oral hearings in the al Thani case – where the Office of the Special Prosecutor in Iceland has charged three former Kaupthing managers and the bank’s second largest shareholder – as planned Thursday morning, April 11, the hearings were postponed until further notice. This happened after the defense lawyers of Sigurdur Einarsson and Olafur Olafsson took the unprecedented step not to heed the judge who refused to accept their resignation of the case. In court, prosecutor Bjorn Thorvaldsson pleaded that the two lawyers would receive penalties for willfully causing delays to the case. The judge will consider any such step after the case had finally been heard. ...

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Claim holders of defaulted Icelandic banks hire a Norwegian specialist

Posted 08/04/2013 - 13:37 by anrigaut

2013-04-06 23

A Norwegian specialist, that worked with Icelandic authorities before the financial collapse, has been hired to look after the interests of the claim holders of the defaulted Icelandic banks. ...

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Pension funds in Iceland want to buy the banks - Many want nationalization instead

2013-03-27 (All day)

The Icelandic pension funds are likely buyers of the banks in Iceland that are mostly owned by foreigners. When the Icelandic banking system fell, new banks were founded on the ruins of the old ones. Foreign creditors and hedge funds are now the largest owners of two of these banks. The government owns the third one.

The three largest banks in Iceland defaulted in 2008. Resolution committees are handling their affairs. Foreign investors and hedge funds own large claims on the defaulted banks, but among the assets of the defaulted banks are the new banks, Arion Bank and Islandsbanki bank. Icelandic pension funds are likely to begin formal discussions regarding the purchase of these banks. The pension funds would pay with foreign currency and enable the claim holders to get their money out of the Icelandic economy. This would help with lifting the capital controls.

The claim holders share in the Icelandic banks is estimated to be worth 220 billion ISK (1.39 billion EUR), but the governor of the central bank has said that they must offer a huge discount on that number, and instead they will be paid with foreign currency.

The largest step to free the assets of the claim holders of Glitnir and Kaupthing [the defaulted banks], is to sell Islandsbanki and Arion Bank [the new banks]. Foreign claim holders own a 95% share in Islandsbanki and 87% share in Arion Bank. ....

See also two related articles:
http://www.newsoficeland.com/home/politics/parliamentministries/item/100...
http://www.newsoficeland.com/home/business-economics/private-sector/item...

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Former President of Kaupthing bank bought his own stock - Kaupthing lent the money

Posted 26/03/2013 - 17:13 by Tricky Dicky

2013-03-25 23

The Special procecutor in Iceland says that Hreiðar Már Sigurðsson, former president of Kaupthing bank, personally sold his own private company (Hreiðar Már Sigurðsson ltd.) shares for ISK 571 million ($4.4m, €3.3m) on August 6th 2008. Kaupthing bank financed the purchase in full and Sigurðsson's personal profit from the transaction was around ISK 325 million ($2.5m, €1.9m).

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The machinery of Kaupthing / Landsbanki market manipulation

Posted 20/03/2013 - 18:25 by Tricky Dicky

2013-03-19 23

As reported earlier on Icelog, the Office of Special Prosecutor has brought charges against managers of Kaupthing and Landsbanki for market manipulation. How did the two banks allegedly manipulate their share price? The SIC shows two basic methods. One was “orchestrated” trading, meaning that the banks themselves placed bids carefully planned in order to influence the price. The other was to lend companies linked to “friendly” and “understanding” clients to buy shares.

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Two big market manipulation cases coming up in Iceland

Posted 20/03/2013 - 10:59 by Tricky Dicky

2013-03-18 23

The Office of Special Prosecutor in Iceland has brought charges in two large market manipulation cases – one against Kaupthing managers, another against Landsbanki managers. Those charged re Kaupthing are, according to Icelandic media, are Kaupthing’s chairman Sigurdur Einarsson, CEO Hreidar Mar Sigurdsson, Ingolfur Helgason director of Kaupthing Iceland, Magnus Gudmundsson director of Kaupthing Luxembourg, Bjarki Diego head of lending, three so far unnamed employees in prop trading and one in retail banking.

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