Financial institutions

The ‘puffin plot’ – a saga of international bankers and Icelandic greed

2017-03-29 23

In a formal signing ceremony 16 January 2003 a group of Icelandic investors and the German bank Hauck & Aufhäuser purchased shares in a publicly-owned Icelandic bank. Paul Gatti represented the German bank, proudly airing the intension of being a long-term owner together with the Icelandic businessman Ólafur Ólafsson. What neither Gatti nor Ólafsson mentioned was that earlier that same day, at a meeting abroad, their representatives had signed a secret contract guaranteeing that the Icelandic bank Kaupthing, called ‘puffin’ in their emails, would finance the H&A purchase in Búnaðarbanki. All profit would accrue to Ólafsson, in the end $100m he later split with Kaupthing’s other large shareholder, Lýður and Ágúst Guðmundsson. Thus, Ólafsson and the H&A bankers fooled Icelandic authorities with the diligent help of advisors from Société General. – This 14 year old saga has surfaced now thanks to the Panama Papers. What emerges is a story of deception similar to the famous al Thani story, which incidentally sent Ólafsson and some of the Kaupthing managers involved in the ‘puffin plot’ to prison in 2015. Ólafsson is however still a wealthy businessman in Iceland. ....

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Icelandic State Was Deceived in Bank Sale

Posted 31/03/2017 - 08:31 by anrigaut

2017-03-28 23

The German bank Hauck & Aufhäuser was never an actual investor in Búnaðarbankinn bank when the Icelandic State’s 45.8 percent stake in the latter was sold in January of 2003. This is the conclusion of the Special Investigation Commission (SIC) of Alþingi, the Icelandic parliament, RÚV reports. SIC concludes that authorities were systematically deceived leading up to and following the sale.

A press release from the committee states that detailed written documents indisputably show that the German bank, Kaupþing hf. In Iceland, Kaupthing Bank in Luxembourg, and a group of men working for and on behalf of investor Ólafur Ólafsson used secret agreements to hide the true ownership of shares attributed to Hauck & Aufhäuser. The actual owner was instead the offshore company Welling & Partners, registered on Tortola, the British Virgin Islands. With numerous secret agreements and transfers of funds, among others from Kaupþing hf. to an account of Welling & Partners at Hauck & Aufhäuser, the German bank was guaranteed indemnity in the deal with Búnaðarbankinn.

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Supreme Court Hears Kaupþing Case

Posted 19/09/2016 - 13:55 by anrigaut

2016-09-08 23

Hearings began in the Icelandic Supreme Court in the Kaupþing bank market manipulation case at 8 am today, Vísir reports. This is one of the largest economic crimes to reach Icelandic courts, but altogether nine people are accused in the case, for market manipulation and/or breach of trust between November 1, 2007, and October 8, 2008.

Among the accused are Kaupþing’s leaders before the 2008 financial crisis: Hreiðar Már Sigurðsson, former director of the bank, Sigurður Einarsson, former board director and Ingólfur Helgason who directed the bank in Iceland.

All three received sentences without probation in the Reykjavík District Court in June last year. At the time, four others received sentences with probation, and one woman was acquitted. Some charges against the bank’s director in Luxembourg, Magnús Guðmundsson, were dismissed, but he was acquitted of others.


[The prosecutor] would like to see all those accused in the case sentenced and a heavier sentence for those who were found guilty in district court. Furthermore, he would like to see the dismissed charges against Magnús Guðmundsson reconsidered.

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Kaupthing Composition Effective Date

Posted 23/12/2015 - 14:34 by anrigaut

2015-12-23 (All day)

The Composition Agreement of Kaupthing hf., which was confirmed by the District Court of Reykjavik on 15 December 2015, has as of today’s date, 23 December 2015, become final and binding under Icelandic law. The Effective Date of the Composition Agreement is therefore 23 December 2015.

Kaupthing will make a further announcement once it receives the relevant exemptions from the Central Bank of Iceland to permit it to make distributions in accordance with the Composition Agreement.

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Charities lose millions after businessman agrees debt deal

Posted 18/12/2015 - 19:12 by anrigaut

2015-12-18 (All day)

Jewish charities and individuals have lost millions of pounds as a result of a settlement on a debt owed by London Jewish businessman Moises Gertner.

The JC can reveal that Mr Gertner will settle a £600m debt owed to 31 creditors – by paying a £500,000 sum to be shared between them.

Documents seen by this paper show that Mr Gertner owed more than £547m to Icelandic bank Kaupthing ....

Mr Gertner, who said he does not have the funds to pay back the full debt owed, proposed paying 0.07 pence for every pound owed to creditors in an Individual Voluntary Arrangement (IVA) to resolve the disputes.

At a meeting yesterday, around 95 per cent of creditors voted to accept the proposals put forward by Mr Gertner, who was represented by his lawyers. .....

As a result, Kaupthing, which is owed the largest debt, will receive around £400,000 for the £547m owed;...

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Iceland Bank Collapse Nears End as Creditors Reach Last Accord

Posted 18/12/2015 - 17:44 by anrigaut

2015-12-18 (All day)

A seven-year standoff between Iceland and the international creditors of its failed banks is nearing and end after a court approved the last remaining settlement.

The agreement signed by the caretakers of LBI hf paves the way for creditor payments from the bank’s 455.6 billion kronur ($3.5 billion) estate. It follows similar deals involving Glitnir Bank hf and Kaupthing Bank hf. The three banks hold combined assets of $17.6 billion, according to their latest financial statements.
Glitnir’s administrators said they planned to make the first payments to creditors on Friday. Theodor S. Sigurbergsson, a member of Kaupthing’s winding up committee, said in an interview this week that he expects "to start payments to creditors early next year." ...

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Failed Icelandic bank Glitnir to start repaying creditors

Posted 18/12/2015 - 16:05 by anrigaut

2015-12-17 (All day)

Failed Icelandic bank Glitnir said on Thursday it had got agreement from the central bank to begin paying out billions of dollars owed to creditors since it collapsed in 2008.
"There are two payments, a de minimis payment today and an initial one tomorrow," Maria Agustdottir, who works for Glitnir's resolution committee, said.
Fellow lenders Kaupthing and Landsbanki, which also collapsed, have also applied for exemptions from capital controls.

Announcement by Glitner is here:

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Kaupthing hf Composition confirmed by the District Court

Posted 15/12/2015 - 19:52 by anrigaut

2015-12-15 (All day)

The Composition Proposal of Kaupthing hf. which was approved at the Composition Voting Meeting on 24 November 2015 has today 15 December 2015 been confirmed by the District Court of Reykjavik as the Composition Agreement of Kaupthing hf.

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When Kaupthing tried to move its CDS (in 2008) with a little help from a friend

2015-12-08 (All day)

Yet another case from the Office of Special Prosecutor v Kaupthing’s three top managers is up in Reykjavík District Court these days. As in several other cases, the charges centre on breach of fiduciary duty, ultimately causing the bank a loss of €510m. The loans went to two companies owned by Kaupthing clients that used the funds to buy credit linked notes and enter into credit default swaps related to Kaupthing in order to lower the bank’s collateral debt swap spread. Does this sound like market manipulation? Deutsche Bank seems to think it might, strongly denying any involvement in the scheme except as the issuer of the notes though Icelandic sources tell a different story.* – But who made a killing on the other side of the CDS bet? Partly Deutsche Bank, according to the OSP but this part of the CLN saga is still not entirely clear, which is one of the reasons why the court hearings might be interesting.
Now, the CDS saga is summed up in the OSP charges (in Icelandic) against Einarsson, Kaupthing’s CEO Hreiðar Már Sigurðsson and head of the bank’s Luxembourg operations Magnús Guðmundsson in a case of breach of fiduciary duty and causing a loss of €510m to Kaupthing, some of it paid out on Kaupthing’s last day of trading.

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Composition Voting Meeting 24 November 2015 – Composition Proposal approved

2015-11-24 (All day)

Composition Creditors of Kaupthing representing 93.66% of the total amount of claims on the Voting Registry participated in the vote.

The Composition Proposal was approved at the meeting with all valid votes cast in favour.

In accordance with this outcome the Winding-up Committee of Kaupthing will submit a request for confirmation of the Composition Agreement to the District Court of Reykjavik.

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