General Discussions

  • ng
  • 11/10/08 31/12/20
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Posted: Fri, 10/10/2008 - 05:39

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Another bank collapse from todays Times

  • expat
  • 10/10/08 31/05/09
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  • Thu, 16/06/2011 - 20:15

Patrick Hosking Financial Editor The Times

Last updated June 16 2011 2:48PM

George Osborne, the Chancellor, has ruled that large depositors in a tiny Hampshire bank that went bust today should not be automatically compensated in full.

It represents the first time in years that ordinary savers in a British-based authorised bank face losing some of their money.

The bank, Southsea Mortgage and Investment Company, was closed down today after being put into liquidation by the Bank of England.

The Havant-based bank has 267 individual depositors with balances averaging about £28,000. Most of them will be compensated in full by the Financial Services Compensation Scheme.

However, 14 depositors have balances of more than £85,000, the maximum FSCS compensation amount, and they facing losing money in excess of this amount.

The biggest single balance was of a depositor with £179,000, who stands to lose as much as £94,000.

The decision not to come to their rescue contrasts with the case of other failures like Bradford & Bingley, Dunfermline Building Society and Icesave, where depositors were given a blanket guarantee by the then Labour government, regardless of the size of their balance.

In effect the Treasury agreed to foot any bill above the FSCS limit, which was then £50,000 per depositor, to preserve financial stability and confidence.

The Southsea bank had been worrying regulators since 2008, when it put in place a plan to wind itself down after losing money lending to property developers.

But it was only today that depositors learnt of these concerns.

The Treasury confirmed deposits above £85,000 would not be covered. “The Chancellor has chosen not to vary the existing policy,” a spokesman said.

The FSCS said depositors with balances of less than £85,000 needed to do nothing and would be sent compensation automatically.

The bank was owned by several charities including the Bible Society, the Church Society and the South American Missionary Society, which were bequeathed the shares.


whoops double clicked!!

  • expat
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  • Thu, 16/06/2011 - 20:18

whoops double clicked!!


Ex-Iceland PM wants charges against him dropped

  • glen07
  • 21/10/08 n/a (free)
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  • Mon, 13/06/2011 - 23:39

Ex-Iceland PM wants charges against him dropped

http://www.huffingtonpost.com/huff-wires/20110608/eu-iceland-bank-collapse/

June 8, 2011 04:45 AM EST | AP

REYKJAVIK, Iceland — Geir Haarde, Iceland's former prime minister, has demanded that a special court dismiss charges that he was negligent before and during the collapse of the nation's banks.

The special court, convened for the first time in Iceland's history to conduct a trial on charges against a government minister, could rule as early as Wednesday but set no deadline.

Haarde appeared in court on Tuesday to be formally charged. He pleaded not guilty, and his lawyer argued that the case should be dismissed because the court was not impartial.

"I plead not guilty of all the charges," Haarde told the court. "During my time in government I strove to solve all of my projects with integrity and with the good of the people as my guiding light."

The 60-year-old former leader is the first person ever brought before the Landsdomur, a special criminal court created in 1905 to deal with charges against Icelandic government ministers.

He could face a two-year prison sentence, if convicted.

Iceland's parliament, the Althingi, voted in September to indict Haarde for allegedly failing to prevent the 2008 financial crisis that sparked protests, toppled the government and brought the economy to a standstill. However, it voted not to pursue charges against three other members of the government.
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Haarde's lawyer, Andri Arnason, argued that parliament – which appointed the prosecutor – had compromised the integrity of the court by extending the terms of eight of the 15 judges.

The court consists of five supreme court justices, the president of the district court, a constitutional law professor and eight people chosen by parliament every six years.

Sigridur Fridjonsdottir, the prosecutor, disputed Arnason's argument, saying that parliament had extended the terms of the eight judges simply to maintain continuity in handling the case.

The first count of the indictment accuses Haarde of failing to initiate measures, legislation or instructions between February and October 2008 "for the purpose of avoiding foreseeable danger to the fortunes of the state."

The count also faults him for failing to act to reduce the size of Iceland's banking industry, whose assets had swollen to nine times the size of the tiny nation's gross domestic product. A Special Investigation Commission had reported that the country's three leading banks – Glitnir, Kaupthing and Landsbanki – overwhelmed the financial system when they ran into trouble with excessive risk-taking.

The second count accuses Haarde of failing to uphold his duty under the constitution to hold ministerial meetings on important issues.

"During this period there was little discussion at ministerial meetings of the imminent danger; there was no formal discussion of it at ministerial meetings, and nothing was recorded about these matters at the meetings," the indictment said.

Haarde's government collapsed in 2009 during a wave of public protests, and he decided not to seek re-election to the Althingi while he was being treated for esophageal cancer.


ESA: Iceland Must Pay Icesave

  • glen07
  • 21/10/08 n/a (free)
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  • Sat, 11/06/2011 - 08:12

http://icelandreview.com/icelandreview/daily_news/ESA_Iceland_Must_Pay_I...

10.06.2011 | 13:29

ESA: Iceland Must Pay Icesave

icesave-logoIcelanders are obligated to pay the minimum deposit insurance of the savings accounts in Landsbanki’s Icesave branch in the UK and the Netherlands, according to the EFTA Surveillance Authority (ESA), which presented its evaluation of the dispute today.

This conclusion is in accordance with the letter sent by the ESA to the Icelandic government in May 2010. Icelandic authorities replied to the letter last month and after the ESA reviewed Iceland’s argumentation it came to the same conclusion as last year, visir.is reports.

It says that Iceland must pay the minimum deposit insurance because Icelandic authorities differentiated between the depositors in Icelandic banks in Iceland and abroad when deciding what their right to repayment should be during the banking collapse in October 2008.

Such discrimination is at odds with European regulations and the EEA agreement, the ESA reasoned. The ESA’s evaluation also states that the Icelandic government has three months to react. If not, the dispute may be taken to the EFTA Court.


Kaupthing debt write offs overturned by court

  • glen07
  • 21/10/08 n/a (free)
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  • Sat, 21/05/2011 - 19:50

http://www.icenews.is/index.php/2011/05/10/23372/

Kaupthing debt write offs overturned by court

Posted on10 May 2011.

A former executive at Iceland’s now-defunct Kaupthing Bank has been ordered by a court to repay a ISK 640 million (EUR 3.9 million) which the bank granted him to buy Kaupthing shares.

Reykjavik District Court yesterday backed up the Kaupthing resolution committee’s claim that the loan should be repaid, even though the bank’s board wrote it off in the weeks leading up to Kaupthing’s demise. Dozens of other former employees are in the same position, as the court ruling marks a legal precedent.

Car Rental Services in Iceland

Dozens of former Kaupthing employees will probably now need to pay back loans from the bank which were used for the purchase of shares following yesterday’s court decision to overturn the board of directors’ autumn 2008 decision to write off the debts. The total amount at stake is around ISK 32 billion (EUR 195.5 million), RUV reports.

It caused a media storm in winter 2008 when it was revealed that the board had made such a decision just weeks before going bankrupt. The decision applied to around 80 staff members who had taken loans to buy Kaupthing shares.

The loans totalled ISK 32 billion and around ISK 15 billion of that was at employees’ own risk. The largest part of the 32 billion went to the bank’s most senior executives. The Kaupthing resolution committee decided last May to try and get the debt write off overturned in court.


Iceland's former prime

  • expat
  • 10/10/08 31/05/09
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  • Wed, 08/06/2011 - 05:56

Iceland's former prime minister Geir Haarde has pleaded not guilty to any part in the collapse of the country's banking sector in 2008.

The former prime minister of Iceland has been formally charged over his part in the collapse of the country's banks in 2008.

Geir Haarde was charged with failing to prevent the banking crisis and failing in his prime ministerial duty to manage the fallout. He could face two years in jail if found guilty.

Haarde, 60, who stood down as prime minister in early 2009, said the charges were "political persecution", calling for the case to be thrown out.

"I declare myself innocent of all charges and will do my utmost to prove my innocence," he told the court in Reykjavikon Tuesday.

"This whole affair is a farce, solely instigated by three members of the current parliament who have now succeeded in holding the first political trial in the country's history," he said later.

However, the court, which consists of 15 judges, ruled the case must go ahead.

Haarde is the first world leader to face criminal charges in relation to the global financial crisis, which caused the collapse of banks across the world and helped plunge the UK into recession. He is also the first person to be hauled before Iceland's Landsdomur, a criminal court created in 1905 to hear charges brought against ministers.

Last year Iceland's parliament, the Althingi, voted to indict Haarde for "economic negligence" in failing to prevent the 2008 financial crisis, which brought the country to its knees.

Haarde was charged with "violations committed from February 2008 through the beginning of October of the same year, by intent or gross neglect, mostly violations against the laws of ministerial responsibility".

Haarde, who served as prime minister between June 2006 and February 2009 and finance minister before that, was instrumental in transforming Iceland from a fishing and whaling backwater into an international financial powerhouse.

But the country's economy came crashing down almost overnight in 2008 when the banks, whose assets had swollen to nine times the tiny island's GDP, became unable to refinance their debts.

An investigation found that Haarde's government allowed Iceland's three biggest banks – Glitnir, Kaupthing and Landsbanki – to take excessive risks.

Sigrídur Fridjónsdóttir, the prosecutor, also accused Haarde of failing to properly acknowledge the crisis and not calling emergency cabinet meetings early enough. "During this period there was little discussion at ministerial meetings of the imminent danger; there was no formal discussion of it at ministerial meetings, and nothing was recorded about these matters at the meetings," the indictment states.

Haarde said the decisions he took before the crash "all turned out to be right".

However, he has conceded that his government should have acted more quickly to avert the crisis. "It probably was not responsible of us to have allowed the banks to grow this big," he said in 2008. "Maybe we should have done something sooner."

The crisis led to a diplomatic row with the UK over the failure of Icesave, Landsbanki's high-interest internet bank, which offered high-interest accounts to British savers.

The Icelandic government has been ordered to foot the £2.3bn bill to compensate Britons. British councils, universities and hospitals that invested in Icesave were also left £1bn out of pocket.

Baugur, the British retail investor, which owned stakes in House of Fraser, Debenhams and Woolworths, collapsed in the fallout of the Icelandic banks.

The International Monetary Fund (IMF) led a $4.6bn (£2.8bn) bailout of Iceland in November 2008.


Life after the GFC

  • jerrawee
  • 16/11/08 31/05/09
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  • Mon, 23/05/2011 - 12:13

I have learned a lot from this experience and continue to do so thanks to all your comments, analysis and so on re our situation.

For those who would like to continue their 'education' and not find it too painful, I recommend watching "Inside Job" directed by Charles Ferguson and use this link from ABC's Background Briefing:

http://www.abc.net.au/rn/rearvision/stories/2011/3211434.htm

You can listen and read at the same time.

Too bad it's all hindsight but at least lessons learned.

Take care.


An interview with Taibbi. Can anybody spot the difference with .

  • follow_the_tao
  • 11/10/08 31/05/09
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  • Mon, 23/05/2011 - 04:48

the IoM, or the UK?

http://www.nakedcapitalism.com/2011/05/taibbi-us-politics-%E2%80%93%C2%A...

Anrigaut and DAG's trust proposal seems to have sunk without trace.

Craine responded to Karran's PG question with the disdain that comes from having dry run a situation too often and being overconfident. Yesterday's news. Reading it I felt I there when something was being buried. Karran could have come back with a comment about actual financial loss. But he didn't. These guys are so mediocre. They are fronts for the banks, for the hedge funds. They are 'captive' and they are on their knees. But the pay is good. Sound like whores to you?

Simpson posts insulting replies to Gordon45 and is off with no purpose on jollies to Kaupthing UK COI. As if we're going to gain anything at all at this point from his involvement. I guess the UK pays his expenses, but his absence from the IoM will no doubt be underwritten by PWC IoM.. and they will be transferring the charges to us..

The situation still stinks. And time passing doesn't make it stink any less. Nothing much has changed. In fact the situation has currently gotten worse, is worse. These guys think they've got away with it. Gordon45 is constantly praising the LP's for sitting there and waiting for the loans to come in. Ask yourselves is Simpson out their at dawn herding the debtors into the milking stalls so he can squeeze their tits (I love metaphors). I assume quite reasonably that debtors of such amounts as we are concerned with are perfectly capable of working out whether a strategic default is cost effective. And Simpson sitting there like the Terminator doesn't quite fit my picture of the situation. Our members on the COI possibly 'guided' him in hedging currency exposure. 'His' success in this fills up a large proportion of the CoI minutes. What did Simpson do? We have no detail. The CoI meeting cost thousands and thousands. Simpson PWC manage to write a poor essay for a 12 twelve year old on the procedure. They aer taking the mickey. Or alternatively they are actually that pathetically incompetent and that is the best they can do. The term overpriced/scam comes to mind. I, like a lot of informed people, consider PWC to be a operating 'confidence tricks'.

Enough for now. I need to write to Mr Simpson this week. I'll probably let you know the outcome. I'll try and make it entertaining.

Meanwhile, you might reflect on the law of the jungle as implemented by institutions like the IoM, their regulators, PWC...
and I hope you reach the conclusion that these people need metaphorically stringing up..

ENJOY Taibbi.


Ah Matt Taibbi, the man

  • expat
  • 10/10/08 31/05/09
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  • Mon, 23/05/2011 - 14:11

Ah Matt Taibbi, the man behind the Exile, the most billious rag in Moscow, full of innuendos and sex stories. On an interview on Russia Today, the Kremlin mouthpiece and propaganda organ. Known as Radio Hanoi to the local expat community.

You need to remember RTs agenda Tao, they make a habit of finding obscure, irrelevent conspircay theorists who like to critisice the US and west in general. Not always a bad thing I admit, but not generally people you'd take to seriously. They like people that they think make the Kremlin look good and all those nasty Americans look bad. Its part of the game. Never mind that nobody has ever heard of them outside their family.

Not the most credible of sources is Taibbi, in my view.


@Expat, History is good, but in the interview and his articles

  • follow_the_tao
  • 11/10/08 31/05/09
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  • Mon, 23/05/2011 - 18:17

on the subject where is his direction or detail flawed? He's filling out in good gonzo form a raft of accurate and across the spectrum analysis and criticism. He's pointing up a failure of regulation. Or did nothing go wrong, Expat?
Nothing to fix, move along now, nothing to see!?
In the states he is not pulling in the kind of criticism you're offering.
Look where the debate in the states is now and I can't see how it is possible to paint Taibbi now as missing the point sociologically, politically, or economically.
Focus in. The 'financial class' has gotten out of control, same as the political class getting out of control in Russia. I find Taibbi's press more accurate and pertinent than their propaganda. These guys are serious players in changing for the worst wealth disribution and social structure.

And by the way I logged on to wipe yet another drunken comment and solely leave Taibbi as a stub. You've frustrated that purpose so you get the reply.


Tao, good morning.A

  • expat
  • 10/10/08 31/05/09
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  • Tue, 24/05/2011 - 07:48

Tao, good morning.
A interesting point you raise. Well firstly most of th einterview is stating the bloody obvious, there's nothing new about the regulatory failure now is there. I think that message has been hammered home a few times, as has the nature of banking in the current climate. Overall the failure of the Anglo-Saxon model and light touch regulation has been done to death by just about everyone. The so called free market economics of the US and to some extent the UK has already been regulated by government actions. Even the FSA has changed it's methods! As I said those that Russia Today use in their little propaganda war are not always way off track, in Taibbis case I don't think there's much original in what he has to say, and as it's an RT interview I'd be hesitant on what was edited out!

Taibbi was also something of an embarrasment in Moscow with his organ The Exile, a rag that populated the expat bars and periodicaly crossed my desk. Not the sort of journalism that got admiring glances from me and many others, but that's by the by. As you point out the Russian political classes are out of control, RT is a Kremiln mouthpiece, so was Matt Taibbi being as used as the many gullable interviewees that have been on RT?

So you see it's more than just about his comments, but also about the agenda. I am one that thinks if you stoop to do an RT interview, you must be desperate for the exposure.

Enjoy your day Tao and for your own sake try to use the edit facility quickly!!


@Expat: Has anyone ever told you that you have a truly..

  • follow_the_tao
  • 11/10/08 31/05/09
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  • Wed, 25/05/2011 - 05:07

nauseating communicational style? Your arrogance drips through your comments. Your communicational style is 'closed'.

Let's go over what you said. Let's paraphrase it, and correct me if I'm wrong. You've suggested that the problem with light touch regulation has been fixed, if only still in process in the UK then at least in the states. As far as I'm aware the 'Dobbs' act is virtually toothless. The 'financial consumer protection agency' has been neutered'. The banks and banksters in the states aren't screaming because they've just lobbied the guts out of virtually every attempt at control. The business 'model' has hardly changed. Neither has the looting. The dollar is sinking like a stone, unemployment is stubbornly high, Obama is seen as being enthralled with Wall Street. And there is 'ideological' debate about having to cut welfare because America can't afford it.. Not new but its after having loaded the deficit with the losses caused by the 'financial class'. It's just media but scan the lines for the word "default" at the moment to see how the game is playing out.
In Europe we have absence of mark to market, bankers debt moved onto public balance sheets pushing the current sovereign debt crisis because the can possibly can't be kicked any further down the road. Basle 111 is miles down the road.
In the UK the banks want to forget the past just like you. You and Bob Diamond seem to think the same thing. There is a debate about regulation, sure there have been a couple of measures but as as far as I can see virtually all the problems remain. The situation as regards regulation looks like a mud pool. The situation looks darker not lighter.

The subject might have been done to death but the drum still needs beating just because the behaviour hasn't changed, the desires haven't changed. The UK is 'frightened' because 'light touch' regulation allowed the financial sector to grow to disproportionate and dysfunctional size and if we regulate it at all/ too fast the 'bankers' might 'offshore' ...

Isn't that where we came in. Do we really think that the attitude on the IoM has changed? I don't, I think they are probably smugger than ever, well those that didn't get too close to the firing line. You backed the wrong horse, so much for your judgement. All your charm came to nothing, but grief. You colluded in allowing them to kick the can down the road with greater facility than they would have otherwise had. And now you're bored.

Taibbi will be remembered for a long time just for his phrase "Goldmam Sachs: A vampite squid on the face of humanity." I don't know what he wrote in Russia, I've no idea. You seem to suggest his was somehow potentially queering the pitch -an embarassment. I assume he 'attacked' or sought to embarrass instead of 'working with' and 'getting close' in order to influence. I'm tempted to point how well that worked in the IoM. But on the other hand did attacking work? No. Nothing worked. The bankers weren't touched, well DCS was forced past them but that might reasonably be seen to have been run-up by the IoMG to forestall a firestorm of domestic depositor upset and in-house embarrasmemt (Cashen and Gelling again), look at the timings.

Hence my point, Expat. And my disagreement with you. No it hasn't finished. I don't actually see the point of your posting, the only point of it I can see it that you get to direct snide comments at me. And full circle again, you communicational style seems to technically lack something.

To finish a little like you finished. I'm not reducing myself to your level of sarcasm. What do you really want? I get the feeling that you want to be at the centre, of whatever, or have the last word, or were you simply drunk like me? Or are you still sore that the shambles(rip-off) on the IoM(UK) cost you so much. Whatever it is, behind it must be a feeling of injustice. I don't like to see injustices. Neither personally nor generally. And my experience is that injustices aren't resolved by forgetting them.Taibbi is correct at this point.

Can see my point yet about communicational style?

A sympathetic response, and an interesting one ( not everyone is as worldly-wise and 'listo como vos') is "jerrwee"'s post above.

Here's another naked capitalism post ... relevant because Lowenstein posted contra Taibbi.. look at the level of detail..(I do realise that it US posting)
what did we have?
http://www.nakedcapitalism.com/2011/05/bill-black-in-praise-of-sorkin%E2...
The author has a record of quality articles, he's just an associate professor at a nowhere university.. , he couldn't possibly be as confused as me but possibly he's a little less confused than you

Situation in the UK controlled...
http://www.independent.co.uk/news/business/news/icb-says-taxpayers-bank-...
and remember these are the 'for the public' statements.. and whose in power, where are we now?

You are no doubt more worldly wise than me. But when I said my opinion of Bell was 'lying bastard' you told me you seen him (nearly?) with tears in his eyes.. What do you think now? I think you've actually said. And your error of judgement caused a lot of grief. I would suggest that your comment above is as much in error. But you're positive you're correct. How far is your head up your ass, Expat?

I won't be editing this as I'm not drunk at the moment.


Get a life

  • Lostinspace
  • 13/10/08 31/05/09
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  • Wed, 25/05/2011 - 09:33

Tao, I don't know where you get off with all this meandering, negative garbage,....anyway, how about writing something positive for a change or, even better, not writing anything all all? All this invective is not getting you, or any of us, anywhere just in case you hadn't noticed. .


Tao you are nothing if not

  • expat
  • 10/10/08 31/05/09
  • unspecified
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  • Wed, 25/05/2011 - 07:27

Tao you are nothing if not predicatble, sorry I have more interesting things to do than bandy insults with you and there in lies the nub of your problem. So by all means cover the site with expletives, it's all very tedious and predictable.


Evidence of co-operative cheating at Glitnir and Kaupthing

  • glen07
  • 21/10/08 n/a (free)
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  • Thu, 19/05/2011 - 00:53

http://www.icenews.is/index.php/2011/05/08/evidence-of-co-operative-chea...

Evidence of co-operative cheating at Glitnir and Kaupthing

Posted on08 May 2011.

Kaupthing and Glitnir banks appear to have colluded to prop up each other’s share prices. Various pieces of evidence have emerged to back up this claim, investigators into the old Icelandic banks say.

Iceland’s FME financial regulator and the special prosecutor into the banking crash are both investigating the old banks and sources claim that plenty of evidence is coming to light on how Kaupthing and Glitnir worked together.

The banks apparently bought their own shares from the market in small batches until they reached permitted limits. Then, RUV reports, they sold those shares to each other in large batches. For example, on 6th September 2007 Kaupthing bought 1.5 billion kronur of Glitnir shares from Glitnir Bank itself. In the same minute, Glitnir bought Kaupthing shares from Kaupthing for the same amount.

Both removed their own shares from their books and were therefore free to start the game all over. In this way the banks fooled the markets and held up their share prices and investigators believe the practice was carried out at the request of the banks’ top people.

Read more: http://www.icenews.is/index.php/2011/05/08/evidence-of-co-operative-chea...


Will heads role?

  • expatvictim
  • 10/10/08 01/11/10
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  • Wed, 18/05/2011 - 17:06

Largely another piece about the Brothers T, but hidden in the middle the extract below . Not clear if Hector and the boys at the FSA are under investigation - probably not but at least recognition of the fine mess they got us into.

http://www.telegraph.co.uk/finance/financial-crime/8519109/Who-are-Rober...

Rather than start calling in Robert's loans when his companies were suffering margin calls in 2008, the bank carried on lending its key client more money.

At this time, the British regulator knew the bank was having liquidity problems and still allowed Kaupthing to set up retail operations attracting £2.5bn of deposits from UK savers in April – a move that is now under investigation by the Serious Fraud Office.


@expatvictim, well spotted, I

  • expat
  • 10/10/08 31/05/09
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  • Thu, 19/05/2011 - 06:43

@expatvictim, well spotted, I missed that one. The interesting thing is that it seems that the Bank of England, HM Treasury and the FSA all knew of the liquidity problems in 2006 and yet allowed KSF to open further operations .i.e. Edge, and Landbanki open Icesave and arguably it also applies to the buyout of Singer Friedlander by Kaupthing . I hope the SFO is investigating this issue, it's been a bone of contention and part of evidence that was given to the IoM enquiry. According to exchanges with HM Treasury all these bodies liased with each other, I and others have pointed out that threy knew there was a problem and ignored it, it was the subject of quite a few letters, bellyup, Icecrusher, myself and doubtless others had a while ago. .

However, that article is incorrect in detail. The margin calls in 2008 were two years after the Edge was set up to suck funds into the Icelandic economy. So the two issues are not concurrent as it states.


Brother's T and FSA

  • shellshocked
  • 23/10/08 31/05/09
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  • Thu, 19/05/2011 - 05:29

Tremendous!


From The Times today and the latest twist in the Tchenguiz story

  • expat
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  • Fri, 20/05/2011 - 07:09

The administrator of Britain’s biggest property management group is going after Vincent Tchenguiz’s freehold empire in an attempt to recover nearly £600 million for creditors.

Zolfo Cooper said it had discovered an outstanding loan of £594 million from one of the Tchenguiz Family Trust’s companies that never actually reached its Peverel management group.

The administrator said the inter-company loan had simply sat on the balance sheet since the Peverel group was restructured four years ago. Zolfo Cooper was now looking to see if it could be retrieved as it seeks to repay creditors owed millions.

Peverel’s parent company collapsed into administration in March after Merrill Lynch, its biggest creditor, demanded repayment.

The administrator’s move is the latest development in a tumultuous two months for Mr Tchenguiz, who is being investigated as part of a Serious Fraud Office investigation into the City’s links with the collapsed Kaupthing Bank. He denies any wrongdoing.

In a report filed at Companies House this week, Zolfo Cooper said that examination of Peverel’s financial affairs had revealed the £594 million loan from Propco Group, another arm of the Tchenguiz Family Trust’s sprawling empire which is not in adminstration.

The administrator said that the debt was incurred in 2007 when Peverel restructured to become a pure management company providing services such as window cleaning to about 200,000 properties.

Hundreds of thousands of freeholds were transferred to Propco in a transaction valued at £594 million, including costs. No money changed hands and the loan has lain idle on the balance sheets ever since.

Zolfo Cooper said that it had a duty to creditors to try to recover the loan. It said: “Substantial inter-company debts include the sum due from Propco Group as a result of the 2007 restructuring. “This debt is subordinated to Propco Group’s bank debt and the joint administrators have limited visibility of Propco Group’s financial position in order to determine the level of recoveries that will be made from this asset.

“The joint administrator is currently investigating the remaining debts to ascertain whether there are likely to be any recoveries ... and are uncertain of the likely realisation from these assets.”

The scene is now set for intense negotiations between Peverel and Propco. The situation is likely to create a headache for Mr Tchenguiz as he is in the process of trying to restructure the Propco group.

To complicate matters further, Propco is one of Peverel’s biggest clients and owns almost a third of the properties it services.

Mr Tchenguiz heads the Consensus Business Group, which advises investors including the family trust. Mr Tchenguiz and Consensus are well known for their complex financial engineering skills. The group has helped with intricate deals in the property, defence, utilities and sustainable energy sectors.

Consensus is already working with the Lazard investment bank advising the trust — the ultimate controlling company behind Propco — on a widescale restructuring of the highly leveraged residential property business, which carries £2 billion of debt and £2 billion of associated fixed-rate and RPI swaps from a host of banks.

Zolfo Cooper, which has incurred £1.2 million in administrators’ fees so far, said it had been in contact with more than 130 interested parties considering buying Peverel’s operating business.

However, it warned that not all the funds would be recovered: “Whilst the joint administrators are unsure of the value that will be realised through the sale process, it is expected that Merrill Lynch will suffer a shortfall on its lending.”

A spokesman for Consensus said: “These are the administrator’s opinions and we have not had the benefit of the administrator’s explanation for the basis of those opinions.”


Former Icelandic PM charged, wishes it had come sooner

  • glen07
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http://www.icenews.is/index.php/2011/05/11/former-icelandic-pm-charged-w...

Former Icelandic PM charged, wishes it had come sooner

Geir H. Haarde, former Prime Minister of Iceland, has had formal charges laid against him in the High Court case over his alleged incompetence before and during the banking crisis. He has criticised the process openly.

Haarde told RUV that it is bordering on the scandalous that it has taken two civil servants, the presecutor of Althingi (parliament) and their assistants seven months to lay formal charges against him.

Car Rental Services in Iceland

He added the opinion that the charges are almost exactly the same, word-for-word, as the parliamentary resolution passed by Althingi on the 28th September. The prosecutor was appointed on the 12th October and could, judging by the charges laid, easily have completed the task in a few days, allowing proceedings to begin right away.

Haarde also feels that it is strange that the president of the High Court, who is also a Supreme Court judge, should have allowed such practices. The High Court will begin its case on the 7th June.

The Icelandic High Court is a group of judges, professors and appointed experts who are always on standby to try elected officials. They are not to be confused with the High Court in London; as the equivalent of that is the Supreme Court of Iceland. The High Court has never before been called together in the 65 years of the Republic of Iceland.


Certainly taken their time

  • expat
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  • Fri, 13/05/2011 - 07:17

Certainly taken their time over this haven't they, and Haarde is little more than the fall guy for Oddssen. Ah the wheels of justice...


Thanks Tony, yes sadly that

  • expat
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  • Fri, 15/04/2011 - 06:58

Thanks Tony, yes sadly that thread closed soon after, but you might have noticed that given the level of criticism there, the Icelandic PM responded the next day. I didn't see it until late evening, but I noticed that FelixKrull (I think a Landbanki depositor) kept up the pressure! What often comes out of thoise articles and comments is that it's always about investors, nobody ever mentions depositors until people like us intervene. It's also sadly predictable to see the comments by some!!
Regards
Steve


Letter from David Ruffley

  • bellyup
  • 10/10/08 09/01/10
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  • Sat, 02/04/2011 - 13:53

Sorry but i cant find the thread that this was on and in all fairness felt i should put this up somewhere.

Dear .......

Further to your correspondence .

You should certainly not believe all you read in the newspapers.

At a small meeting in the City I said that some senior bankers had referred to depositors as “morons” . This was a very disparaging and unfair comment but I reported to the audience that some bankers thought that way.

No member of the national press was present at the meeting as far as I was aware – though apparently a ‘stringer’ from a minor financial publication was. He misquoted me because someone from the Treasury Select Committee saying this is a news story whereas a banker saying it, is not. This individual has obviously peddled this untrue story to the Sunday Times which I see ran it a week last Sunday without checking with me. No other news outlet has checked either.

In short the story is untrue.

With kind regards,

David Ruffley


bellyup

  • cottesmore
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  • Sun, 03/04/2011 - 10:33

Me thinks this sounds like and smells like bull shit! No smoke and all that.......


@cottesmore

  • IceCrusher
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  • Sun, 03/04/2011 - 12:18

I'm bound to say I thought the same!


The Kaupthing share support operation

  • anrigaut
  • 19/10/08 30/10/09
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http://ftalphaville.ft.com/blog/2011/03/18/516931/the-kaupthing-share-su...

Interesting allegations here involving KSFUK.

Begins:

You’ve read the story in the FT…

Lawyers acting for the UK arm of the collapsed Icelandic bank Kaupthing, which is at the centre of a fraud probe, have withdrawn a request to retail entrepreneur Kevin Stanford to repay nearly $2m (£1.2m) as part of efforts to recover funds owed to the bank….

In a response to KSF’s demand, Mr Stanford’s lawyers said he rejected the claim and instead demanded at least £130m in respect of losses that he said arose from KSF’s participation in a share support scheme in 2008. Mr Stanford claims Kaupthing lent him about £130m for the purchases of his Kaupthing Iceland shares, and £81m of this was loaned as late as August 2008, just two months before Kaupthing Iceland went into administration.

…. now read the letters.

Here are the legal exchanges between the lawyers for the fashion tycoon and DWF, the lawyers acting for the UK arm of the collapsed Icelandic bank Kaupthing.

Now, Stanford’s lawyers make some serious allegations in the letters, on which the Kaupthing side has thus far declined to comment. ...

See link for the letters.


The Kaupthing conundrum

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http://www.independent.co.uk/news/business/analysis-and-features/the-kau...

The Kaupthing conundrum

The Serious Fraud Office has staked its reputation on the high-profile investigation into the collapse of Iceland's biggest bank

By Sean Farrell

Wednesday, 16 March 2011

More than two years after the collapse of Kaupthing, how much do we really know about what went on at Iceland's biggest bank? Well, we do know that the Serious Fraud Office (SFO) has pinned its reputation to an investigation of how British savers' money on deposit at the bank's UK business was used.

The SFO swooped to arrest nine men last week, including Kaupthing's former executive chairman, Sigurdur Einarsson, and its UK investment banking boss Armann Thorvaldsson.

We also know that Robert Tchenguiz, the London-based entrepreneur who is the highest-profile of those arrested, has come out fighting. He accuses the SFO of staging a publicity stunt and says he had offered to answer the agency's questions. He is threatening legal action to seek redress for the damage done to his reputation and business.

Mr Tchenguiz's brother Vincent was also raided by the SFO. The brothers, who built their fortunes in property investment, went public with their arrests on the day and have vowed to prove that they are innocent.

Kaupthing's rise and fall is a story that, with the benefit of hindsight, beggars belief. It is also a convoluted tale of how some of the most flamboyant figures in the world of (mostly) British business got unwisely entangled in one of the biggest debacles of the financial crisis.

In the boom decade of megabanks, Kaupthing was a minnow compared with rescued lenders such as Royal Bank of Scotland or Citigroup. But, along with its similarly aggressive rivals Landsbanki and Glitnir, Kaupthing nearly brought down its own country because Iceland let its banks get so large relative to the size of its economy. Once one of the world's richest countries per capita, Iceland was forced to go to the International Monetary Fund for a bailout in 2008.

Iceland's banks went on an expansion spree which resulted in Kaupthing's bosses taking up residence in London. The UK capital was the deal centre of the world where swashbuckling financiers were building empires taking in the booming property, sport, retail and leisure sectors. Ownership or stakes in Newcastle United FC, JJB Sports, J Sainsbury and Mitchells & Butlers were snapped up with Kaupthing's help.

That all changed when the debt markets froze but even as Kaupthing was running out of cash in 2008, its bosses claimed the bank was in fine fettle and could ride out the crisis.

However, the Icelandic government's 2,300-page report into the country's financial meltdown found that its biggest shareholders were also its biggest borrowers. Robert Tchenguiz owned 1.5 per cent of Kaupthing itself and was also a shareholder in its biggest shareholder, Exista, which was a fund set up to invest in Kaupthing shares.

According to the Icelandic government's report, Robert Tchenguiz's borrowing from Kaupthing increased to £1.7bn, plus more from subsidiaries, even as his businesses were "going downhill".

"It seems that the boundaries between the interests of the banks and the interests of their biggest shareholders were often blurred and that the banks put more emphasis on backing up their owners than can be considered normal," the report said. Robert Tchenguiz has said he lost £1bn in the financial crisis and that his businesses were so intertwined with Kaupthing that it made sense for the bank to continue backing them to protect its own business. The brothers have made a civil claim for £1.8bn against Kaupthing for fraudulent misrepresentation.

The UK's Financial Services Authority (FSA) also gave the bank a clean bill of health as the bank amassed deposits from retail savers, charities and local councils through its high-interest Kaupthing Edge account in the UK. It is the fate of these funds, deposited by British savers, that lies at the heart of the SFO investigation.

Kevin Stanford, the entrepreneur behind the Karen Millen and All Saints retail brands, on Friday linked shareholdings in the bank with the loss of Kaupthing Edge deposits.

Mr Stanford claimed in a letter from his lawyer that the bank used money from Kaupthing Edge savers to make loans to buy Kaupthing shares that supported the share price while executives sold their shares. Mr Stanford is trying to recover £81m he borrowed to buy the shares after he lost the money when the bank collapsed, the letter says.

Tony Shearer, the former chief executive of Singer & Friedlander, the investment bank Kaupthing bought in 2005, has accused the FSA of ignoring his warnings at the time that Kaupthing's bosses were not fit and proper people to run a UK bank.

Other Kaupthing relationships that have been examined by the SFO include its links with Mike Ashley, the owner of Newcastle FC, and with Mr Ashley's associate Chris Ronnie.

As the SFO has found in the past, fraud is a very hard charge to make stick. The financial crisis has so far thrown up far more people who were deluded, incompetent or unwise than it has those found guilty of criminal behaviour.

The Tchenguiz brothers and others caught up in the cat's cradle of Kaupthing's affairs claim they are the victims too and will continue do so unless the SFO can prove otherwise.

Key players: Close to the Edge? Kaupthing's major clients

Kevin Stanford

The retail entrepreneur emerged in documents leaked in 2009 as Kaupthing's fourth-biggest shareholder. In a letter from his lawyer last week, he blew the whistle on Kaupthing's alleged use of UK savings deposits to purchase Kaupthing shares and keep the bank's share price up. The Karen Millen founder alleged that he was lent £81m to buy the shares. The letter claims Mr Stanford was asked by the bank to keep the trade confidential.

Chris Ronnie

Mr Ronnie bought a 29 per cent stake in JJB Sports in 2007 alongside Exista, the fund that was set up to buy shares in Kaupthing, The deal was financed using a loan to Exista made by Kaupthing Singer and Friedlander, the UK arm of the Icelandic bank. Mr Ronnie, was installed as chief executive of the sports retailer but was fired in 2009.

Mike Ashley

Kaupthing advised the sports retail tycoon on his ill-fated takeover of Newcastle United FC in 2007 and his purchase of a stake in Blacks Leisure.

The Serious Fraud Office has been looking at the relationship between the Sports Direct entrepreneur and Iceland's banks, and in particular Kaupthing. Mr Ashley's long-time associate Chris Ronnie, see top right, raised eyebrows when he bought a stake in Sports Direct's arch rival JJB. The SFO last year dropped its investigation of Sports Direct over fraud and price fixing.

Nick and Christian Candy

The Candy brothers were among Kaupthing's most valued borrowers as it helped finance their development of thousands of luxury flats in London's most desirable locations. The Icelandic bank took stakes in a Candy project in Los Angeles as well as their Noho Square development in London, with Kaupthing's UK subsidiary providing a £200m loan for the latter project. The brothers went to war with Kaupthing in the courts once the bank had collapsed.

Robert and Vincent Tchenguiz

The Tchenguiz brothers were arrested last week and questioned for several hours in London over their involvement with Kaupthing. Robert Tchenguiz was both a shareholder in the bank and its biggest borrower. The brothers became high-profile figures in the City during the financial boom as they rode the wave of commercial property. They have brought a claim against Kaupthing for £1.8bn, have insisted they have done nothing wrong and have threatened legal action.

Jon Asgeir Johannesson

The pin-up boy for Iceland's aggressive march into the British retail market, Mr Johannesson's Baugur group was backed heavily by Kaupthing and its rivals Landsbanki and Glitnir. Kaupthing financed Mr Johannesson's purchase of Arcadia in 2001 and his purchase of a stake in Mosaic, the retailer behind brands such as Oasis, Principles, Warehouse and Karen Millen.


Top names dragged into Kaupthing probe

  • anrigaut
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This is Money, 11 March 2011
http://www.thisismoney.co.uk/news/article.html?in_article_id=525236&in_p...

Includes this :
"The SFO is looking at why some of Kaupthing's clients were able to take large loans backed with minimal collateral and deferred interest payments.

It has discovered that Kaupthing moved its operations to the UK after backing from Russian oligarchs ran dry. Despite this background, the Financial Services Authority gave the bank a licence to offer deposit accounts to British savers."

And comment from a KSFIOM depositor since rejection of PG. Thanks Doug!


The Kaupthing conundrum

  • anrigaut
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Another interesting account in The Independent:

http://www.independent.co.uk/news/business/analysis-and-features/the-kau...

More than two years after the collapse of Kaupthing, how much do we really know about what went on at Iceland's biggest bank? Well, we do know that the Serious Fraud Office (SFO) has pinned its reputation to an investigation of how British savers' money on deposit at the bank's UK business was used. ........


Tchenguiz get go-ahead for action against Kaupthing

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By Jonathan Sibun 9:01PM GMT 16 Mar 2011 Daily Telegraph

The ruling, handed down by Mr Justice Burton, comes just days after the property entrepreneurs were arrested, along with seven others, as part of a Serious Fraud Office investigation into Kaupthing's collapse. The brothers deny any wrongdoing.

Kaupthing had argued that the High Court should strike out claims by the Tchenguiz Family Trust and the Tchenguiz Discretionary Trust (TDT), but Justice Burton said the allegations could be heard in English courts.

"As a direct result of Kaupthing's actions, the relationship between the claimants and its other financing counterparties has been gravely compromised since 2008," said Vincent Tchenguiz after the ruling. "The result has been that the claimants have suffered massive losses which have continued to grow whilst Kaupthing refused to recognise the legitimacy of the claim."

Acting for TDT, Antonio Suarez-Martinez at law firm Edwards Angell Palmer & Dodge said: "It is the TDT's case that it was one of the biggest victims of Kaupthing's collapse, suffering losses running to hundreds of millions of pounds."

The Tchenguiz brothers were among Kaupthing's biggest borrowers when the bank failed in 2008, leading administrators to seize assets belonging to the pair.

Kaupthing said it did not accept the ruling: "Should the English court proceed to give a substantive judgement concerning the merits of the trustee's claims, such judgement will not have direct impact in Iceland nor will it be binding on the Icelandic courts."

Weil, Gotshal & Manges LLP, which is advising Kaupthing, said: "This in effect, is a judgment on procedure only. The merits of the underlying claims are extremely weak and they are already being dealt with by the Icelandic Courts."


Tchenguiz company goes bust

  • arny
  • 15/10/08 31/05/09
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  • Tue, 15/03/2011 - 08:19

See today's Daily Mail.


Anyone wish to comment?

  • expat
  • 10/10/08 31/05/09
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  • Wed, 13/04/2011 - 08:26

There seems to be quite a debate raging about Iceland on the Guardians CiF if anyone is interested.

http://www.guardian.co.uk/commentisfree/2011/apr/12/iceland-ireland-port...


Have made my comment Regards,

  • tonycBrisbaneOz
  • 12/10/08 31/05/13
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Have made my comment

Regards, TonyC


Tchenguiz firm goes into liquidation

  • jetski
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Tony Shearer calls for FSA report on Kaupthing

  • anrigaut
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http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8379532/...

FSA 'must produce report on collapse of Icelandic banks'

The former chief executive of Singer & Friedlander, the City investment bank bought by Kaupthing, has called for the Financial Services Authority (FSA) to publish a report into the Icelandic banks' collapse.

Tony Shearer, who was leading the 100-year-old Singer & Friedlander when it was acquired in 2005, said the UK Government has "learnt none of the lessons" from the failure of Kaupthing and Landsbanki.

His comments, made in a letter to The Daily Telegraph, come days after property tycoons Robert and Vincent Tchenguiz were arrested by the Serious Fraud Office as part of their investigations into the collapse of Kaupthing.

The SFO arrested nine men, including two in Iceland, in an operation that involved 135 police officers in London.

The downfall of Kaupthing cost the UK Treasury £2.5bn, after it bailed out 160,000 UK customers in its deposit arm Edge. Councils are thought to be still owed around £750m from the bank's demise.

Mr Shearer said: "It is time the FSA publishes a report into the collapse of Iceland's Kaupthing and Landsbanki. Then we would all learn something, and the Government and regulators would know what needs to happen to ensure it does not recur."

He added: "Kaupthing went bust in early October 2008. In February 2009, the FSA was still saying its failure was due to the banking crisis and not the reasons I gave to the FSA in 2005 and the TSC [Treasury Select Committee] that these people were not suitable to run a UK bank.

"The UK Government shows no interest in addressing the issues raised by the collapse of banks such as RBS [Royal Bank of Scotland] and Kaupthing. They have learnt none of the lessons because they have made sure that no analysis of what went wrong has been published."

It is understood that the SFO is planning further raids as part of its investigation into the failure of Kaupthing. The agency started the probe in order to establish whether "substantial value" was extracted from the bank "in the weeks before it collapsed".

Robert Tchenguiz was one of Kaupthing's biggest clients with loans of almost £1.7bn, which were used to fund investments in companies such as J Sainsbury, the supermarket chain.

The Tchenguiz brothers have denied any wrongdoing and say they are confident that once the investigations have concluded they will be cleared of any allegations of wrongdoing. The tycoons were released without charge.

Reports said Kevin Stanford, the fashion tycoon who owns All Saints, has alleged in a legal letter that Kaupthing used deposits from British savers to inflate its own share price. This was allegedly by passing deposits to wealthy customers on the condition they bought Kaupthing shares.


The link between Robert Tchenguiz and Kaupthing

  • glen07
  • 21/10/08 n/a (free)
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http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8371595/...

The link between Robert Tchenguiz and Kaupthing
Over 20 police investigations. Allegations of market abuse, fraud and excessive loans. Financial claims against the bank running to five times Iceland's GDP. It's fair to say Kaupthing has had a tough few years.
The link between Robert Tchenguiz and Kaupthing
Blame for Kaupthing's collapse has landed at the doors of individuals throughout the world of finance Photo: AFP
5:50AM GMT 10 Mar 2011

Comment

What was once Iceland's biggest bank collapsed in October 2008 but its failure has done nothing to remove it from the headlines – British charities and savers lost millions after investing in the high return, and it transpired high risk, lender. The bank still owes the UK Treasury £2.5bn.

Blame for Kaupthing's collapse has landed at the doors of individuals throughout the world of finance – the bank's management who appeared willing to lend huge sums at the drop of a hat; Icelandic and British regulators who failed to spot the iceberg before it hit; and entrepreneurs from Robert Tchenguiz to Kevin Stanford who stand accused of shaping the bank's fortunes.

Tchenguiz had an unusually close relationship with the bank. Kaupthing was the Iranian property tycoon's major relationship bank, funding his spending forays. In return, the billionaire introduced the bank to celebrity clients and helped feed its ambition to enter the investment banking big league.

The bank's biggest borrower, Tchenguiz was granted loan facilities worth around £1.7bn, a significant concentration of risk. In the months running up to Kaupthing's collapse, and in the midst of the credit crisis, the bank even awarded Tchenguiz £170m to meet margin calls from other banks.

Meanwhile, Tchenguiz owned 1.5pc of Kaupthing's shares and was a board director of the bank's biggest shareholder, investment vehicle Exista. Tchenguiz also put up shares in Kaupthing as collateral for loans from the bank, an unorthodox policy.
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  No one to push the Tchenguiz boat out this year
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But following Kaupthing's collapse, the relationship rapidly soured. First the bank seized Tchenguiz's stake in Somerfield, the UK supermarket chain, before also forcing the sales of the businessman's holdings in pub chain Mitchells & Butlers and retail giant J Sainsbury. Kaupthing also filed a lawsuit to recover an alleged £643m unpaid overdraft.

Tchenguiz fired back his own action, claiming to be a creditor to the bank to the tune of £650m. His argument – that he was tricked into borrowing money from a bank that did not disclose that it was already insolvent.

A 2,300 page report into the Icelandic crisis put together by the country's MPs devoted entire sections to Tchenguiz, with his name appearing more than 100 times.

The MPs alleged that Tchenguiz benefited from "particular goodwill" among Kaupthing's management. "It is hard to see that lending, to the extent that Tchenguiz's companies received it during times of liquidity crisis, was decided with the bank's best interests in mind," it said. "Rules about large risk exposures were not followed."

The report also claimed that Kaupthing secretly owned almost half of its own shares.


Tycoons and bankers released

  • anrigaut
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http://icelandreview.com/icelandreview/daily_news/Tycoons_and_Bankers_Re...

Tycoons and Bankers Released after Questioning

All nine individuals who were arrested in Iceland and London yesterday in a joint operation by the UK Serious Fraud Office (SFO) and Iceland’s Special Prosecutor in relation to their investigation of the affairs of the defunct Icelandic bank Kaupthing were released after questioning last night.
Special Prosecutor Ólafur Thór Hauksson told RÚV’s radio program Morgunútvarpid that investigators decided not to demand custody over these people and therefore they were released, ruv.is reports.

He added questioning will continue today but wouldn’t say whether the same people would be questioned as yesterday.

Hauksson assured listeners that all of his office’s investigations would continue to be worked on effectively—in addition to the Kaupthing investigation, affairs connected with Landsbanki were in the spotlight earlier this year and of Glitnir Bank at the end of 2010.

The schedule is for these investigations to be completed by the end of 2014 and that schedule will stand, he stated.

Among those arrested were former chairman of Kaupthing Sigurdur Einarsson, former director of Kaupthing Singer & Friedlander Ármann Thorvaldsson and the British businessmen and brothers Robert and Vincent Tchenguiz.


As you have stated previously

  • expat
  • 10/10/08 31/05/09
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  • Fri, 11/03/2011 - 12:40

As you have stated previously Anrigaut, patience is needed here. As I understand it Robert Tchenguiz is a director of over 175 companies which form part of their empire. They have from the start played the PR card of innocence and the side tracking case against KSF for £2 billion is a part of that in my view. A case of "the lady doth protest to much". But at least it's now in the open, there is the usual conspiracy theory flying that they are being sacrificed to repair the UK/Iceland relationship, which frankly doesn't really add up if you think about it, but they aleady seem to have pursuaded The Times of that judgeing by an article yesterday.

Let's see what happens, if they are sacrificed then it would suit us to be honest!! But it's difficult to believe they'd leave a paper trail given the allegation that they used Kaupthing loans to pay off other banks, which is a tad unorthodox! Given the allegation of using insider/influence to raise the loans and the whole issue of using shares as colateral. It's difficult to believe that there was not a Due Dilligence on the health of Kaupthing as well, either that or they have very silent lawyers and adviers!

But as ever the centre of the fall of KSF is Iceland and what is emerging slowly is a trail of poor decisions by the Icelandic management, supported by the Icelandic Central Bank. Although one has to ask why the Bank of England chose not to act as a lender of last resort for what was in reality a paltry sum that could have seen KSF bailed out and under UK control a few years ago. Well that and a fair few other unanswered political questions.

However, that august tome The Daily Mail, is suggesting that the entire investigation is going to "bring London's system of regulation under the spotlight", JJB Sports it seems is also still under investigation according to them.


Icelandic saga will take time

  • anrigaut
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  • Thu, 10/03/2011 - 10:32

Icelandic saga will take time for fraud investigators to unravel

Independent 10 March 2011

" 'Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that's wrong.'

Those words are actually those of Craig Ferguson, maker of the credit crisis movie Inside Job, when he won best documentary at the Oscars last month. To him and to the furious public, let's just say: patience.

The document-snatching raids by the UK's Serious Fraud Office in London and Reykjavik and the arrest of nine people, including the flamboyant pre-crisis era dealdoers the Tchenguiz brothers, may or may not eventually lead to charges over the collapse of the Icelandic bank Kaupthing. Certainly, Robert and Vincent Tchenguiz, like the Kaupthing executives also held and then released without charge yesterday, say they did nothing illegal. (It is worth noting that, on the same day, it was revealed that the SFO will not be laying any charges against the Sports Direct owner, Mike Ashley, after an investigation, unrelated to the credit crisis, which took well over a year.)

But the SFO's move shows that there are still some rich seams to be tapped by investigators, and none is richer than the tale of little Iceland's improbable boom and shocking bust....

...

Greed on the way up. Fear on the way down. These are the motivators of fraud. We will have to see what the documents seized by the SFO reveal. Charges, if they come, are months away. And as prosecutors in the US found, when a jury acquitted two Bear Stearns hedge fund managers, making investment mistakes is not the same as fraud. Conflicts of interest do not amount to fraud.

Inside Job may be a travesty of the facts, and Craig Ferguson may be wrong – the credit crisis was not "caused" by financial fraud – but there undoubtedly was fraud along the way. From American subprime mortgage brokers lying to and about their borrowers, to negligence at least on the part of financial executives, there is still time for a reckoning. In Iceland, under the flickering of the Northern Lights, the reckoning may be bigger than most."

Complete article and links to Related Articles here
http://www.independent.co.uk/news/business/comment/stephen-foley-iceland...


More on Kaupthing arrests

  • anrigaut
  • 19/10/08 30/10/09
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Telegraph 10 Mar 11: Former FSA employee believed to be one of Kaupthing arrests

"Gudni Adalsteinsson, a former Treasurer at Kaupthing who worked for the FSA last year, is one of several ex-employees of the Icelandic bank who are understood to have been arrested by police in the series of dawn raids.

News of the arrest is likely to come as a significant embarrassment to the regulator. Mr Adalsteinsson left the FSA in the Autumn of last year after a three month stint at the City watchdog. The FSA said it would not comment on individuals' identities.

The former Kaupthing treasurer had worked in Credit Suisse's fixed income division in 2005, joining from Lehman Brothers where he spent the previous four years.

Others thought to have been detained yesterday include Armann Thorvaldsson, the head of Kaupthing Singer & Friedlander, the bank's UK business, and Sigurdur Einarsson, the banking group's former executive chairman and chief executive. None of the men were available for comment and their position remains unclear.

Mr Thorvaldsson wrote a controversial memoir about his role in the boom and bust of the Icelandic bank's London operations which was published in 2009. Frozen Assets promised to lift the lid on "how one man, one bank and one country experienced and affected the course of world economic history".

This article and links to 4 related articles here: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8371983/...


Excellent news isn't it, not

  • expat
  • 10/10/08 31/05/09
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  • Wed, 09/03/2011 - 14:25

Excellent news isn't it, not before time in my view, at last the guilty are being nailed.

And by the way it's not just the Tchenguiz brothers, nine have been arrested in total, Armann Thorvaldsson, the head of the UK arm of Kaupthing, and former executive chairman and chief executive Sigurdur Einarsson have also been arrested.

Sigurdur Einarsson was last year named as a wanted man by Interpol. Two years ago Armann Thorvaldsson published a book, called Frozen Assets, billed as: "How one man, one bank and one country experienced and affected the course of world economic history" and still proclaim your innocence!


'Guilty being NAILED?' How slippery are these people?

  • conned
  • 13/10/08 n/a (free)
  • a depositor
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  • Thu, 10/03/2011 - 09:48

I hope the fate of Madoff and Stanford haunts them. Since shredders are very popular these days, we can only hope some people got careless. Fingers crossed.


Former Icelandic PM refused access to documents

  • glen07
  • 21/10/08 n/a (free)
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  • Wed, 09/03/2011 - 22:18

I think there are a few starting to get worried about accounting for themselves -

http://icelandreview.com/icelandreview/daily_news/High_Court_Dismisses_R...

High Court Dismisses Request of Iceland’s Ex-PM

The High Court (Landsdómur) assembled yesterday to rule on a demand made by the lawyer representing Iceland’s former Prime Minister Geir H. Haarde, Andri Árnason, that he be granted access to the same documents as Althingi parliament’s prosecutor, Sigrídur Fridjónsdóttir. The request was dismissed.

Reykjavík District Court had earlier ruled that Haarde’s lawyer could not have Althingi’s entire case against the former PM for alleged misconduct in office dismissed, Fréttabladid reports.

At the same time Fridjónsdóttir demanded access to information from the National Archives of Iceland, information on which Althingi’s Special Investigative Commission based its report on the banking collapse. She was not granted access to it.

The High Court did not take a position on the District Court’s ruling but concluded that it couldn’t be appealed to the High Court.

After the verdict on the dismissal of Árnason’ request was announced yesterday, the High Court discussed whether the Prime Minister’s Office should comply with Fridjónsdóttir’s demand that she be granted access to all of Haarde’s emails since he took office in 2006.

Fridjónsdóttir reasoned that the emails were necessary in preparing her case. Einar Karl Hallvardsson, the lawyer representing the Prime Minister’s Office, said it isn’t clear in this instance whether the office is obligated to hand over the emails and so it is natural for the High Court to clear up the legal uncertainty on this issue.

Then Árnason demanded that the case against Haarde be dismissed on the grounds that the election of Althingi’s prosecutor had not been in compliance with the law. He also demanded that her demand to access Haarde’s emails be dismissed or rejected.

The High Court’s conclusion on these issues is pending. There is nothing in the law stating that the court must make its decision within a certain time limit.

However, the limit in regular courts is four weeks and Fridjónsdóttir said it is likely that the High Court will operate in the same manner.


Hi Glen, yes one hopes that

  • expat
  • 10/10/08 31/05/09
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  • Thu, 10/03/2011 - 06:22

Hi Glen, yes one hopes that this is a pivotal moment in this issue, that actions we've waited a couple of years for are actually going to expose and prosectute those that set this situation up. I'd still like to see Oddssen and the FSA in the dock as well though, to say nothing of Brown, Darling, Straw and Myners.


Iceland's PM Criticizes Bank Directors for High Salaries

  • glen07
  • 21/10/08 n/a (free)
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  • Wed, 09/03/2011 - 22:22

** Seems that nothing ever changes. Good luck to them if these salaries are truly justified but wow.**

http://icelandreview.com/icelandreview/daily_news/PM_Criticizes_Bank_Dir...

PM Criticizes Bank Directors for High Salaries

Director of Arion Bank, formerly Kaupthing, Höskuldur Ólafsson earns ISK 4.3 million (USD 37,000, EUR 27,000) per month. Birna Einarsdóttir, his counterpart at Íslandsbanki, formerly Glitnir, has a monthly salary of ISK 2.6 million (USD 22,000, EUR 16,000), while Steinthór Pálsson, Landsbanki’s director, earns almost ISK 1.1 million (USD 9,000, EUR 7,000) per month.

These numbers, as stated in Morgunbladid, are from 2010. According to Fréttabladid, the salaries of the highest-ranking executives in Arion Bank and Íslandsbanki increased significantly last year.

Ólafsson is now said to earn around ISK 5 million per month, which is approximately 145 percent more than what his predecessor earned. The bank’s employment cost increased more than 33 percent last year.

“I haven’t asked for any increases. I was just hired at this salary,” Ólafsson told Fréttabladid but would otherwise not comment on his wages. Einarsdóttir’s salary has increased by 25 percent, the newspaper states.

Prime Minister Jóhanna Sigurdardóttir reacted to the news of the bank directors’ salaries by commenting on her Facebook site:

“There is no moral justification for the excessive pay which the highest-ranking executives of Arion Bank and Íslandsbanki have received in the past year. Their conduct is an intolerable provocation and a direct threat to stability and peace in society. It is unacceptable that the highest-ranking executives of banks and companies shovel out millions for themselves while the public is struggling to cope with the consequences of the banking collapse.”

According to visir.is, representatives of the three banks will attend a meeting with the Trade Committee of the Icelandic parliament, Althingi, today to discuss annual financial statements and the banks’ returns.
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If anyone is interested in

  • expat
  • 10/10/08 31/05/09
  • unspecified
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  • Wed, 09/03/2011 - 17:21

If anyone is interested in making a blog comment you can vent your spleen on the Guardian web site, time to bring this back into the public eye.

http://www.guardian.co.uk/business/2011/mar/09/tchenguiz-brothers-arrest...


Guardian discussion closed!

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Wed, 09/03/2011 - 18:46

I tried to make a comment - only to be told "this discussion is now closed". A bit fast methinks ...


MMMmmmm how very

  • expat
  • 10/10/08 31/05/09
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  • Wed, 09/03/2011 - 18:56

MMMmmmm how very irritating!!
Just to make my day the Tchenguiz brothers own a company called Peveral who run/own retirement homes, one of which my mother is in. She is delighted in the news as she can't stand Peveral any more than the rest of the people there can. Slowly threy have institutionalised people who are supposed to own their own flats, charge then loaded service charges and generally turn the place into an old persons prison.
Pity I was going to blog about Peveral as well as KSF!!!!


Peveral

  • anrigaut
  • 19/10/08 30/10/09
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  • Wed, 09/03/2011 - 19:01

Yes, I read about that saga somewhere. Maybe you can find somewhere else to blog on that.

This story is in all the press, but the Tchenguiz pair get all the headlines - I've only seen a couple who even mention the Kaupthing bosses being arrested, which seems more significant for us (though I realise they were closely knit). Quel monde!


It's a shame in a way that

  • expat
  • 10/10/08 31/05/09
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  • Wed, 09/03/2011 - 19:49

It's a shame in a way that the Tchenguiz brothers are getting all the headlines, there are nine arrests including the former MD of the London branch, they all deserve their fifteen minutes of fame in such a minor celeb culture! I hope that the others all all brought into the public domain and given a good grilling.
Channel 4 just had a decent news slot on the subject, although as we all now know, two minutes is not a long time to make the case on TV!!
I'll have some fun on Peveral when I go to see mother on the weekend!!
Shez leeva!