latest on fraud investigation and Kaupthing from the Sunday Telegraph

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Posted: Sun, 13/12/2009 - 08:15

SFO to probe collapse of Icelandic bank
Intelligence finds and plight of UK savers prompt prosecutor to investigate possible criminal activity in failure of Kaupthing

By Richard Fletcher and Rowena Mason
Published: 10:43PM GMT 12 Dec 2009

The Serious Fraud Office is preparing to launch a formal investigation into Kaupthing, the failed Icelandic bank, amid suspicions that it may have been involved in criminal activity.

According to sources, the SFO is expected to announce this week that following four months of intelligence gathering it is to launch an official inquiry. The prosecutor is expected to appoint one of its most experienced investigators to take charge.

Alistair Darling: questions over Icelandic banks' compensationMembers of the former Kaupthing board are understood to have appointed one of London's leading fraud solicitors ahead of the formal announcement. Ian Burton, the senior partner at Burton Copeland, who defended jockey Kieron Fallon and Independent Insurance founder Michael Bright, is believed to be acting for former members of the board. A spokesman for Burton Copeland refused to comment.

Kaupthing collapsed last October, along with two other Icelandic banks, Glitnir and Landsbanki, leaving 300,000 British savers unable to access their money and institutions nursing billions of pounds in losses.

Two-thirds of the bank's corporate clients had links to London and the bank had relationships with a number of leading UK entrepreneurs - including Sports Direct owner Mike Ashley and property tycoon Robert Tchenguiz e_SEnD who could find themselves drawn into the investigation despite no suggestion that they were involved in any wrongdoing. The pair could be among a number of entrepreneurs interviewed as witnesses.

Robert Tchenguiz, the former billionaire property investor who lost a large chunk of his fortune in the recession, was Kaupthing's biggest client as well as a director of its largest shareholder.

The bank's leaked loan book shows that Mr Tchenguiz borrowed €1.7bn to finance his private investments from the bank. Earlier this year, Kaupthing sued the businessman for the return of £643m held in Oscatello, an company based in the British Virgin Islands.

Kaupthing also financed Sports Direct's acquisition of stakes in rival retailers Blacks Leisure and JD Sports. The stakes have since been seized by Ernst & Young. The Icelandic bank also advised the entrepreneur on his acquisition of Newcastle United.

Following Kaupthing's collapse, the Treasury had to pay £7.5bn to compensate UK savers, although £2.3bn of this will be repaid by Iceland over the next 15 years. The UK was forced to freeze the bank's assets just before its collapse amid fears that money could be transferred back to Iceland.

One source said the aim was to conduct a full SFO inquiry on behalf of the hundreds of British charities, councils and offshore savers still waiting to be fully compensated a year after the crisis.

Since August, the SFO has been gathering intelligence to "get to the bottom" of the collapse. Investigators have also travelled to Reykjavik to help the Icelandic authorities, which are conducting seperate investigations into the collapse of Kaupthing along with Glitnir and Landsbanki.

The SFO's interest in Kaupthing will be uncomfortable for the bank's London advisers although there is no suggestion of any wrongdoing on the part of any individuals or other companies.

Icelandic investigators have already put Kaupthing's dealings with Kevin Stanford, the retail investor, and Moises and Mendi Gertner, the London-based entrepreneurs, under scrutiny.

The Icelandic financial services regulator has handed files relating to Kaupthing and suspected market manipulation to the country's special investigator. The authorities have been examining Kaupthing's transactions with a company linked to Mr Stanford and its trading in credit default swaps (CDS) relating to the bank.

Mr Stanford's company, Trenvis, is believed to have been set up by Kaupthing in the British Virgin Islands before receiving a loan of €41.7m (£35.3m) from the bank.

Mr Stanford was a business associate of the Icelandic retail giant Baugur, which borrowed heavily from Kaupthing.

A spokesman for the Gertner brothers declined to comment and Mr Stanford could not be reached.The SFO also refused to comment.

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Iceland banking crisis investigator eyeing finish line

  • glen07
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  • Wed, 07/04/2010 - 10:48

Iceland banking crisis investigator eyeing finish line

Posted on06 April 2010. Tags: banking, Iceland, investigation, olafur thor hauksson, ólafur þór hauksson

olafur-thor-littleOlafur Thor Hauksson, Iceland’s Special Prosecutor looking into the banking crisis, believes his team will complete its first investigations before the end of the month.

Hauksson said when the first stage is completed decisions can then be made about prosecutions. He said that the different issues being investigated are all at different stages and would not be drawn on which cases have come the farthest.

“We are set to close some cases this month, but that is only very provisional,” Hauksson told He added that all too often, prosecutors are at the end of a case and then suddenly find they need more time. But the information available today suggests that the end of April is a fair target, Hauksson says.

Like Rats leaving.................

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  • 10/10/08 09/01/10
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a sinking ship the Icelanders are starting to leave their country

Bill to chase personal assets lost in Iceland banking crash

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Bill to chase personal assets lost in Iceland banking crash

Posted on25 February 2010.

alþingiIcelandic property owners who tried to avoid the effects of the banking crash by signing their assets over to family members will not get away with it if a new parliamentary bill comes into effect.

Many businessmen transferred their assets over to their wives or other family members following the banking collapse. They did this so that their creditors might be hindered and delayed in seizing their assets.

Under current law, such asset movements can be annulled during a period of two years; but a new bill by Social Democrat MP Helgi Hjorvar would see that period increased by two years to a total of four years, according to

Financial investigators raid houses in Iceland and UK

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  • Wed, 27/01/2010 - 11:35

olafur-thor-littleThe special prosecutor’s office in Iceland yesterday carried out house searches in co-operation with the UK’s Serious Fraud Office. There were eight house raids in Iceland and four in the UK relating to the dealings of Exista hf.

Exista is being investigated due to its sale of Bakkavor in autumn 2008 and its cancellation of personal guarantees on employee loans taken out to buy shares in Exista.

Exista itself released a statement saying that the Serious Fraud Office is investigating share transactions from when Exista owned part of the British high street chain JJB Sports.

Gordon Brown what a tosser

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  • 13/10/08 31/05/09
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  • Mon, 08/02/2010 - 17:02

I know this thread might not be the ideal place to stick this comment but I just wanted to get out what a hypocrite and creep Gordon Brown is (never mind his little Darling). All this talk that he was justified in his actions because there was a chance that Icelandic banks might move money from UK banks before the respective bankruptcies justifying him using terror legislation etc. Basically he is saying that because it is wrong to move money around to achieve a better outcome in bankruptcy for one of a group of companies rather than another (ie Khf would have had the big pot and KSFUK the small one but for his action) he was justified in jumping in and taking the steps he did. When in fact his failure to inform the IOM FSC in the normal course of things of the deteriorating situation of KSFUK achieved exactly the kind of thing he thought was so wrong by the Icelandics: ie he got (kept in our case) another company's money in his (KSFUK's) pot so as to maximise their pay-out by depriving us of the chance to get it back in ours, where it should have been, had things run their normal course. Fine - let him justify his own position and actiions by outside events but let the thieiving Scotch pudding accept what he did to us was equally abhorrent and pay us compensation for the hit we have had to take for his selfish benefit. I don't know about you guys but its all gone quiet and when it does I get angry again !!

@ steveservaes re the evil Gordon Brown and Nobodys Darling

  • fight theft
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  • Mon, 08/02/2010 - 17:49

I quite agree Steve and what made me sick to my stomach was Gordon Brown crying again on TV re his dead baby daughter. Usually one learns compassion and empathy for their fellow man from life's experiences like this, but not this bastard he is crying for his tragedy not giving a damn about our tragedies affecting 11000 people and still deeply affecting 3000 from suicide, broken homes, illness, death from stress. Does he care that the money I lost was mainly from my husband who dies of leukemia not ling before his daughter’s death and took the only inheritance I had form my mother who died not much later. Does he care that I am reliving the losses and digging up the grief again of the loss of these loved ones who would “turn in their graves” to see the injustice thrust at me and the theft of their life savings and mine from that hypocritical bastard.

I cannot bear to see him on TV without angrily swearing at him and his little darling. May they get their just deserts what goes around comes around and he didn't even learn from his daughters death from which he got the sympathy of the nation and mine, but not now. His tears on TV the other day I doubt were even for her but he tears of a scared coward acing like a little boy. May he feel scared and all the IOM Gov. too.

Also for any UK tax payers and those who pay European withholding tax ( which ends up in the UK) I think we must all sign a petition that we will not pay a penny in anymore UK taxes until we are fully reimbursed interest suffering and all until we have every penny returned that at least matches any tax demands. I’d be quite happy for GB to be the first UK Prime minister to be assassinated with Darling (or we’ll save the “firing squad for him) for ruining the UK as well as our lives and health – for their evil deeds and giving 14 billion in bankers bonuses weeks after creating our collapse – instead of just returning our half Billion, Angry enough Steve? We still have to get to the Media……

A picture speaks a thousand words

  • Wanda
  • 12/10/08 31/08/09
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  • Tue, 09/02/2010 - 16:07

No doubt in my mind that Gordon Brown sheds his crocodile tears just to gain the sympathy of the masses. And to take the spotlight off his almighty **** up that has branded us all as mere "collateral damage". That he is prepared to take the public's sympathy all for himself, sparing none for our plight, is the true mark of the man.

Perhaps now is the time to re-look at my YouTube debut in which I say..... "Gordon Brown is NOT a man of his word". I would dearly love for him to see my genuine tears, as I weep for myself and the thousands of others whose lives have been turned upside down by a snivelling coward and his Darling sidekick. Angry? Me? Hell, YES!

Angry? YOU BET

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  • 18/10/08 31/05/14
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  • Wed, 10/02/2010 - 06:08

Most of the words I would use to describe the man are unprintable, so I don't write much about him on here, but never a day goes by when my blood doesn't boil at the mere mention of him.

They say that bullies, brutes and tyrants cry in public not out of any sorrow or loss, nor to endear themselves to the public - they don't feel the need for that.
It is purely a symptom of their insecurity and paranoia.

As I've said before on here, and verified by glen07, a senior civil servant, Lord Turnbull, likened him to Joseph Stalin in the way that he deals with people - and this was before he was PM.

Let's face it, the manner in which he achieved the top job was tantamount to a coup.
True ; he had to have the approval of the Party - but that was reminiscent of a Politburo-style rubber stamp.

Then came the sanctimonious crap - "open, fair and honest government" peppered with sentimentalist hogwash - " when I was a boy ..."

What has happened to us has brought out his true colours. He and his rotten government have not felt the need to deny that his actions caused the downfall of our bank, and yet in the same breath he brazenly brushes aside all claims that he might in some small way be responsible for our present plight.

The man is a liar, a hypocrite, a charlatan, and an utter disgrace to what was once a prestigious and dignified office to hold.

      gordon brown is an arse upon which
      everyone has sat except a man

       adapted from e.e. cummings

Yes - I was nearly physically

  • The Biggest Ban...
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Yes - I was nearly physically sick when I saw his pathetic attempt to win voters sympathy with his hypocrtical snivveling. This man is a slimy, lying, cheating, low-life, thief. Anyone who has ANY doubts should read "Gordon is a Moron" by Dr Vernon Coleman, published by Blue Books ISBN:978-1-899726-08-0. He has DESTROYED England. I can't wait to see the arrogant, useless, egotistical control-freak, piece of shit destroyed at the next election - or preferably before if someone could find a gun !

The headline says it all !!!

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  • Mon, 08/02/2010 - 17:34

The headline says it all !!! Couldn't agree more !!! Complete and utter tosser !!!

Icelandic tycoons at centre of SFO raids

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Icelandic tycoons at centre of SFO raids

Serious Fraud Office carries out series of raids on offices of firms linked to Lýdur and Ágúst Gudmundsson

*, Tuesday 26 January 2010 20.37 GMT

Simon Bowers

The Serious Fraud Office and counterparts from Iceland carried out a series of co-ordinated raids today on the offices of companies linked to Icelandic tycoons Lýdur and Ágúst Gudmundsson, including the Lincolnshire headquarters of Bakkavor, one of Britain's largest chilled food suppliers.

Before the banking sector meltdown brought the small north Atlantic island's economy to its knees in October 2008 the Gudmundsson brothers, both of whom have homes in Belgravia, were among Iceland's most influential and wealthy entrepreneurs. The holding company Exista, in which they hold a near-45% stake, was the largest shareholder in Kaupthing, Iceland's biggest bank, before its collapse.

But yesterday's raids are understood to be focused on other alleged activities at Exista. Among the actions under scrutiny is the sale of a major stake in Bakkavor by Exista to the Gudmundsson brothers shortly after the banking meltdown.

Raids in the UK were conducted by the SFO and British police at four addresses, including Exista offices in Paddington, at the request of Icelandic prosecutors and do not relate to investigations being pursued by UK authorities. Inquiries were sparked in part by a dossier on Exista that was passed to criminal prosecutors by administrators to Kaupthing.

Intelligence exchanges between the SFO and the Office of Iceland's Special Prosecutor Ólafur Hauksson have been building for months, but searches at UK addresses mark a new level of collaboration. Hauksson said he expected more UK raids to follow, relating to other inquiries in Iceland.

Meanwhile, Hauksson's team today carried out simultaneous raids at eight addresses in Iceland linked to Exista. In addition to their own lines of investigation, Icelandic prosecutors were carrying out a formal search request from the SFO relating to their inquiry into past activities at British sportswear retailer JJB.

A joint venture between Exista and businessman Chris Ronnie jointly acquired a 29% stake in 2007 in a deal financed by Kaupthing. Ronnie was later appointed to the JJB board, quickly becoming chief executive. He was suspended last year after it emerged the stake had been seized by administrators to Kaupthing.

The SFO announced in September that it is investigating suspected criminal price-fixing and fraud in the sportwear retail industry. It is focusing its attention on Sports Direct as well as JJB. JJB has negotiated immunity in exchange for whistle-blowing co-operation.

Bakkavor, the launchpad for the Gudmundsson brothers, began as a sleepy fish roe processing firm. In a series of Kaupthing-brokered takeovers in the UK it swallowed Katsouris Fresh Foods — a company five times its size in 2001, and four years later bought Geest,making it one of the largest suppliers of ready meals, pizzas, desserts and sliced fruit to Britain's supermarkets. A year later Laurens Patisseries was acquired from serial entrepreneur Andreas Liveras.

Is Icesave affair as important as it seems?

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****Follow link to this article if you want to see the unofficial graphic representation of Icelandic national debt and I woul recommend reading the following comments on the aticle concerned.****

Is Icesave affair as important as it seems?

Ice News Posted on25 January 2010. Tags: debt, Iceland, Icesave, IMF, loan

kronurPayments and interest on Icelandic national debts over the next 14 years will be around ISK 2,260 billion, of which the Icesave debt amounts to around ISK 289 billion – which is a smaller amount than the Central Bank of Iceland loaned Kaupthing without security shortly before the banking crash.

In the last year Iceland’s Althingi parliament has discussed the Icesave debt for at least 400 hours and the discussion has been the main news in the media most of that time. Public and political debate on the rest of the national debt has gone almost without discussion, on the other hand.

The figures of ISK 2,260 billion and ISK 289 billion were worked out by computer programmer and prolific blogger Vilhjalmur Thorsteinsson and take into account variables including inflation and interest.

His unofficial graphic representation of national debt can be seen here. Simply click on the chart to make it larger.

The categories, read left to right, mean:

Current treasury debt, local governments, energy companies,
Icesave contract, IMF loan, Nordic loan,
Loan from Poland, loans due to the banking system

One of the biggest operations

  • expat
  • 10/10/08 31/05/09
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  • Fri, 05/03/2010 - 07:24

One of the biggest operations of the Icelandic special prosecutor into the banking collapse took place two weeks ago in Luxembourg. Special Prosecutor Olafur Thor Hauksson’s team has, among others, been involved in searching the premises of Kaupthing Luxembourg.

The investigation centres on trade in Kaupthing shares, as well as debt insurance.

As well as being one of the Special Prosecutor’s biggest operations to date, it is also thought to be one of Luxembourg’s biggest financial investigations to date.

Hauksson took a five person team to Luxembourg on Sunday and worked personally on the investigation with local police. House searches began on Tuesday and included the five Icelanders and 40 Luxembourg police officers. Two buildings formerly used by Kaupthing were raided and questioning only came to a close last night.

Hauksson would not tell RUV how many people have been questioned this week or their identities; but confirmed that most of them live in Luxembourg. He also emphasised how helpful and professional he has found the police in Luxembourg.

Icelandic film been made - asking where has the money gone?

  • glen07
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  • Mon, 25/01/2010 - 22:47

Maybe I Should Have…found out where all the money went

Ice News Posted on25 January 2010. Tags: film, Gunnar Sigurdsson, Iceland, Icesave

Maybe I should have...If you took out a ISK 2.2 million car loan, paid off 700,000 in the first year and were left with a debt of 5 million after having returned the car, maybe you’d want to make a movie about the Icelandic banking crash too. Just where has all the money gone?!

Maybe I Should Have is the name of a new film by Gunnar Sigurdsson and is a personal account of the Icelandic economic collapse: an unscientific investigation into what actually happened.

The film’s budget was tiny, but still stretched far enough for foreign filming locations including London, Washington DC, Guernsey and Tortola, the tax haven every Icelander has now heard of.

The film’s journey is punctuated with an authoritative roster of interviewees including a former foreign minister, a London banking boss and ‘Outvasion Viking’ Bjorgolfur Thor Bjorgolfsson, who explains how sometimes money just ‘disappears’ to ‘money heaven’ never to be seen again. Which is nice to know. Explains a lot.

While a fair bit of the Icelandic banks’ money was indeed simply made up on paper, the rest of it (especially the money deposited in Icesave and other savings accounts) was very real. Sigurdsson demands the answer to a very simple question: where is that money now?

Regrettably he falls short of a concrete answer; but the more people openly asking such questions, the more likely we are to get an answer.

Maybe I Should Have is a highly entertaining and well-made film despite certain shortcomings. It goes on general release in Iceland on 5th February and the makers hope it will make its way onto the international film festival circuit in 2010 as well.

IMPORTANT ! Youtube BBC interview with Icelandic President

  • glen07
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  • Fri, 08/01/2010 - 10:59

Please watch the BBC Newsnight interview with the Icelandic President:

Icesave Agreement: Just Sign It.

  • glen07
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  • Thu, 07/01/2010 - 09:46

Iris Erlingsdottir
Iris Erlingsdottir

Icelandic journalist and writer
Posted: January 2, 2010 07:46 PM

IceSave Agreement: Just Sign It!

At long last, Iceland's parliament--the Alþingi--has passed a bill settling Iceland's dispute with the United Kingdom and Holland regarding the government's responsibility for losses suffered by British and Dutch depositors when one of Iceland's three major banks--Landsbanki--went into receivership in October 2008. Unfortunately, Iceland's President, Ólafur Ragnar Grímsson, has not yet signed the bill and has indicated that he may instead call for a national referendum. If a recent poll is accurate, the agreement would be rejected by a large majority of Icelanders.

Tens of thousands of investors--individuals, municipalities, and charities--took advantage of the exceptionally high rates offered on Landbanki's IceSave savings accounts, only to discover that these accounts were not formally backed by any government. Landsbanki officials had inexplicably failed to register as a domestic bank in either country, and thus were not backed by government deposit insurance. When Landsbanki went into receivership on October 7th, British authorities invoked anti-terror legislation on October 8th to freeze Landsbanki's assets there.

When Davíð Oddsson, the head of Iceland's Central Bank, and Icelandic finance minister Árni Mathiesen indicated--Davíð on TV: "We will not pay the foreign debts of irresponsible mess makers; we'd be saddling our children with such debt, it would be slavery..."- that Iceland would guarantee losses suffered by Icelandic depositors, but not foreign depositors, Gordon Brown noted that Iceland was in violation of the European Economic Area's (EEA) anti-discrimination laws and insisted that the Icelandic government reimburse all depositors. Although the International Monetary Fund (IMF) agreed to assist Iceland, it has refused to release additional funds until the IceSave matter is resolved.

The first attempt to resolve this matter resulted in a blatantly unfair agreement, which Iceland rejected. After further negotiations, a more palatable accord was hammered out and approved by a narrow majority in the Alþingi on December 30, 2009. Fitch lessened its downgrade on Iceland in anticipation of the bill's passage, and Iceland received the first tranche of a loan from the Nordic countries.
Almost there: PM Jóhanna Sigurðardóttir and Finance Minister Steingrímur Sigfússon, viewed through the lens of extraordinarily talented political cartoonist Halldór Sigurðsson.

The group InDefence has presented Ólafur Ragnar a petition purportedly containing over 60,000 signatures calling for him to veto the bill, and over 500 people are currently camped out in front of his official residence, Bessastaðir.

It would indeed feel satisfying to tell the Brits to cram it. The invocation of anti-terror legislation against a NATO ally in a matter that obviously did not involve any physical danger to the British public was insulting and irresponsible. The bullying tactics employed against a much smaller country that was in obvious distress demonstrated a complete lack of tact or compassion.

Nevertheless, Ólafur Ragnar should sign the bill because it's the right thing to do, and because the consequences of rejection would be disastrous.

It's the right thing to do because the foreign depositors relied on the integrity of the Icelandic banking regime when they placed their funds in Landsbanki's hands. These depositors suffered as much as the Icelandic depositors because of the incompetence (and worse) of the Landsbanki executives and the Icelandic regulators. It was not unreasonable for the depositors to rely on statements by the bank and Icelandic regulators strongly denying rumors of problems with the bank's business model. If the Icelandic regulators had been doing their jobs and warned the public, it's likely the pension funds and charities wiped out by Landsbanki's default would have parked their money elsewhere.

As for the consequences, it's clear that the ratings agencies would place Iceland below investment grade, which would greatly increase the rate at which the country would be able to borrow. It's possible (if not likely) that the IMF would refuse to release any further funds.

The current government would almost certainly fall, and any chance at reasonable reform would die. The conservative Independence Party that ran Iceland until the collapse would retake power and restart the party. The businessmen whose reckless actions placed the county in danger would return with the illicit funds they've placed in off-shore accounts and buy Iceland's resources for a song.

Most importantly, the new government would take whatever steps necessary to ensure that these culprits never see the inside of a jail cell. The investigation of the misdeeds that led to Iceland's collapse has proceeded very methodically, and the special prosecutor now appears on the cusp of indicting some of the Independence Party's biggest supporters. If the investigators are allowed to continue, we'll see whether the rumors of money laundering for the Russian mafia are true, whether vast amounts of money are indeed sitting in Tortola, whether bank employees exploited pension funds with same glee that Enron employees exhibited while ripping off California consumers, and whether our politicians and regulators were bribable.

Until these questions are answered and the culprits are punished, we will never have a functional democracy in Iceland. The current government has been given the unenviable task of placing the country's finances on a reasonable and sustainable basis after years of irresponsible overspending by the Independence Party, and much of the belt-tightening has adversely affected individuals who had nothing to do with the banks' pyramid schemes. All of the Icelandic people are rightfully upset by Gordon Brown's handling of the matter, and are galled at the prospect of sending needed funds to him.

We're also impatient with the pace of the special prosecutor's investigation--how can the United States place Bernie Madoff behind bars within weeks of discovering his fraud, while we're still waiting for the first indictment of any of the bankers?

So, we're damned if we sign the IceSave agreement, and damned if we don't. We need every krona we can get to rebuild our damaged economy, and it hurts to see these funds shipped off-shore. By not signing the agreement, though, we would ensure that our history is rewritten by the very persons who have placed our country at peril and who are just waiting for the chance to plunder it again. We would also be flipping a very large middle finger to the international community at a time when we need its assistance the most.

By signing it, Ólafur Ragnar would ensure that the new government would be able to finish what it has started--a thorough investigation into the events that led to our fall. Unless Eva Joly and Ólafur Þór Hauksson are permitted to complete their task, not only will the wrongdoers escape justice, but we will show them that there are no adverse consequences for their incompetence and malfeasance.

Good thorough journalism for a change @Glen07

  • fight theft
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  • Thu, 07/01/2010 - 20:47

and just wnen I was commemting on why the Iclelandic bankers and other fraudsters and criminlas can't be brought to justice as fast as Madoff etc in the US along came this artical a few hours later:

Title of article:

Whitecollar crime fighter Eva Joly takes on IceSave published 7 January 2010 in nrc hanlesblad
Eva Joly is a member of the European parliament who has made it her mission to fight white-collar crime.
By Caroline de Gruyter

Eva Joly is dressed in a soft sweater and velvet pants. Blonde curls spring up above her face. But don’t let looks deceive you: she is one of the most committed white-collar crime fighters in Europe. Joly, a French-Norwegian binational, was the best known investigatory judge in France in the mid 1990s. Back then, she handled the Elf-case, a scandal involving the oil multinational that revealed corruption at the highest levels of power in France. In those days, Joly went nowhere without her bodyguards.
Since June, Joly (66) has been a member of the European parliament, representing the French Europe Écologie party (led by Daniel Cohen-Bedit). In her capacity as chair of the Committee on Development she has been keen to take on the rampant tax evasion by multinationals. She is also advising the Icelandic public prosecutor, who is looking to build a criminal case against the bankers that bankrupted the island nation in 2008.
After the Elf-affair, have you come to distrust multinationals?
“That is beside the point. Elf was about corruption. What worries me now is something different: that many people see taxation as an evil, that taxes are there to be reduced and that this is okay. But it is not okay: tax money is needed to build our roads, run our hospitals and public transport: services in the public interest.”
How much are governments missing out on?
“In France, businesses are supposed to pay 33 percent tax, according to the law. In reality, only small companies do. The big ones use well known trick to evade taxation. Large companies in France pay only 13 in taxes, opposed to 33, which costs the state 100 billion euros annually. That amounts to two thirds of the 140 billion euro budget deficit.”
According to Joly, large companies create complicated global webs of related subsidiaries that they use to funnel profits through using well known techniques called ‘round tripping’ or ‘transfer pricing’.
“A huge part of world trade takes place within these multinationals. Alcatel, Philips: they all do this.”
Why hasn’t anybody put a stop to these practices?
“One reason is that states compete amongst themselves to attract multinationals, reducing tax rates across the board: a race to the bottom. Norway is one of the few nations trying to do the right thing. Norwegians pay a lot of taxes and demand good services in return.”
Is that something only rich countries can accomplish?
“In Norway, where good statistics are available, the Bergen Business School discovered that a multinational turns over 30 percent less than a Norwegian company doing exactly the same. One would think the opposite would be true, because improved efficiency is supposed to be the reason for mergers and take-overs, but guess what is causing this 30 percent difference? Tax-evasion. If this is hard to prove in a non-corrupt, rich country like Norway, can you imagine how difficult it must be in Zambia or Nigeria? Multinationals can go about their business unhindered there.”
What should those countries do then?
“Never do business without help from countries like Norway. Oslo has sent advisors to Zambia as a form of development aid. They help national authorities there to negotiate better contracts with multinationals. That’s a start. The problem is: European politicians are hardly aware of this. I hope that the European parliament will start paying attention. By the way, the Netherlands are not helping in this respect, because of their harmful tax laws favouring holding companies. According to the Center for Research on Multinational Corporations, a Dutch NGO, the Netherlands comes second only to America in terms of direct foreign investment. That might sound crazy for such a small country, until you figure out that most of these companies are Dutch in name only. What do these companies earn you? Thanks to your good recordkeeping this is well documented: 1.8 billion euros a year, only 0.8 percent of your GDP. That is the same amount you spend on development aid, which is undercut by this practice. A lot of these letterbox multinationals, officially based in the Netherlands, do business in Africa. Can’t the Netherlands do without them?”
Is this what your work in Iceland is about?
“Absolutely. The handful of banks that led that island to its doom are all private enterprises. When they collapsed, at the end of 2008, they had ten times more money in their current accounts than the state. The government was left powerless. There are about 330,000 Icelanders and most of them had nothing to do with this. But now the banks’ deficits have become the state’s deficit, affecting everybody. This is theft of public money.”
How is the investigation coming along?
“I cannot say much. The investigation is in progress and might take a couple of years.”
The Icelandic president does not feel that Iceland should repay the Netherlands and the UK back the damages incurred by IceSave’s demise. What is your opinion of the Dutch and British insistence that they do?
“The Netherlands and the UK are being arrogant. They are asking for 2.7 and 1.3 billion euros respectively at 5.5 percent interest. But Iceland’s public debt amounts to 300 percent of GDP. They will never be able to pay back the whole amount.”
Still, Dutch money has vanished.
“Yes, but the Dutch need to understand that it is both unrealistic and unreasonable to demand everything be repaid with so much interest, and to make this a condition for Iceland’s entry into the EU. What IceSave did was wrong, but the Dutch and the British are also partly to blame. All business was conducted through IceSave’s branch offices. The Dutch and British financial regulators said: these branches are not covered by our jurisdiction because they are the Icelandic supervisor’s responsibility. But everybody knew there was no way a handful of people in Reykjavik would be able to supervise properly what was happening in Amsterdam and London. According to a European directive, EU countries should regulate multinationals from outside the EU operating on their territory just as strictly as home-grown enterprises.”
Meaning the Dutch supervisor was negligent?
“To a certain extent, yes. The Dutch were supposed to ensure that the regulators in Reykjavik were doing a proper job, which they weren’t. The Netherlands has tried to cover its tracks citing IceSave’s legal status. Scandalous, really.”
How will this all end?
“If you do not meet Iceland halfway, only fishermen will remain on the island and you still won’t have your money back. The brain drain has begun: 8,000 highly educated people have already left the island and more will follow. It is not in our interest to impoverish Iceland. It has natural resources we might need in the future and it has a strategic location. We should not bully them, but negotiate, in a more grown up and proper fashion than we are currently doing.“

Comments by Eva Joly

  • Brabander
  • 15/10/08 31/05/09
  • unspecified
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  • Fri, 08/01/2010 - 19:42

Glen 07,
I fully agree with Eva Joly's comments re lack of tax paid by the multi-nationals. In my previous incarnations I have experienced this practice first hand, there is nothing illegal about this and multi-nationals have tax departments whose job is to establish legal tax structures to ensure they minimise their tax liabilities. Within the USA this is done by establishing a holding company in Delaware. Unfortunately this problem can only be resolved through multi-lateral co-operation and the signs of that happening very soon are not very good as individual nations (and even states within the USA) compete with one another to attract these companies.
Actually the same observations can be applied to the lack of tax paid by the super rich who "hide out" in countries where they pay no or low income taxes. This is why there were so many Icelandic banks in London! Whilst the Netherlands has a low tax regime for international holding companies the UK operates a NO tax regime for the super rich as long as they are non UK domiciled for tax purposes. Russian/Swedish and Thai multi billionaires have not chosen the UK as their "residence" because they love the country!

According the Dutch papers the principal Icelandic objection to the deal negotiated with the UK and NL is not so much the level of interest (although they believe it is too high) but the fact that it is treated as SOVEREIGN debt ie Iceland can only get rid of the debt by repaying it or through a future agreement with the nations involved.
It is still possible that a compromise could be reached re the level of interest but during the earlier negotiations the UK and NL apparently dug in their heels re the sovereign element.

My interest is in how all this will impact on our claims against Kaupthing Bank hf. There would appear to no UK or IOM government support for our claims whatsoever and I do not believe that it is likely that the Icelandic authorities will take any responsibility for this issue. After all they have much bigger worries.

I think you'll find that

  • expat
  • 10/10/08 31/05/09
  • unspecified
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  • Wed, 06/01/2010 - 17:33

I think you'll find that there are two postions on this issue. One is that the Icelandic PM and a sizeable proportion of the populace object to the terms and conditions of the repayment. The interest rate is onerous by some accounts (5.5%) and the potential for still bankrupting Iceland exists as does loss of soveriegnty. That is one side of the coin and perhaps one that needs looking at by the UK and the Netherlands, as it is also the case that they both refuse to take any blame for what has happened here.

The who was regulating who and was anyone looking anyway arguement. I would just quote paragraph 2 of the anouncement on the HM Treasury web site in October 2008 which states: Kaupthing Singer & Friedlander (KSF) is regulated by the FSA. The FSA has determined that Kaupthing Singer & Friedlander no longer meets its threshold conditions, and is likely to be unable to continue to meet its obligations to depositors. The FSA concluded that KSF is in default for the purposes of the Financial Services Compensation Scheme. The Treasury has used the Banking (Special Provisions) Act 2008 to ensure a resolution that preserves financial stability and provides protection and continuity of business for depositors.

The other side of the coin is the popularist view that Icesave, Glitner and the other Icelandic banks were private companies and so why should the population pay the debts. Therefore absolving Iceland of any gaurantee obligations which can be argued were the basis of the expansion of their banks in the fiorst instance. This position has been pressed by the Icelandic media and the Nationalsist Party and has certainly gained in popularity.

In our case as KSF IoM depositors its about the guarantee and Icelands positon that they will only honour gauantees for their own domestic depositors.

You can also delve into the who was who was representing who at any negotiations issue, but that's been done to death on this forum!!!

But you can vote on it on the Guardian web site

I've voted on Guardian website

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
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  • Wed, 06/01/2010 - 22:40

Looks like the majority of voters say to give Iceland, a small nation, a break. I don't want the ordinary Icelandic people to suffer. I want their rich cats and bankers, who have moved their money out of the country, due to inside knowledge of the true financial situation within the Icelandic banks, to be pursued and pay up!!!!!

Giving Iceland a break

  • Brabander
  • 15/10/08 31/05/09
  • unspecified
  • Offline
  • Wed, 06/01/2010 - 23:18

Glen 07.
The problem with your argument is that the Icelandic people had the opportunity to bring their banksters to book, they did not do so! Nor, of course, did the UK or US governments. The reality is that the financial elite is always protected wherever they are, the other citizens take second place.
The other issue I have is that Iceland protected its domestic savers but not the innocent depositors with their banks abroad. Why do you consider the citizens of Iceland innocent, surely we the depositors are the most innocent of all.
Remember that, over time, some of the money made by the Icelandic banks has filtered back to Iceland supporting the high standard of living there. It is therefore plain incorrect to state that the general population of iceland never benefited.
In Dutch papers there is a lot of justifiable anger towards the president of Iceland whose hands are extremely dirty.
No doubt some sort of compromise will be reached but the reputation of Iceland will remain damaged for a long time.
By the way this does not excuse the total and utter incompetence of the FSA and FSC. It is totally beyond me that these guys still have jobs, I suppose they are part of the financial elite.

Whilst certainly not wishing

  • expat
  • 10/10/08 31/05/09
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  • Thu, 07/01/2010 - 19:31

Whilst certainly not wishing to raise the temperature on this issue I have to say I am in 100% agreement with Brabanders remarks about Icleand and have always been surprised how Iceland seems to get off lightly with critisicm over this whole issue. The SFO are not investigating for no reason.

I have been following the Icelandic angle on this from the very start, as I see that as the fulcrum of what has happened to our deposits. It is about an Icelandic expansion and collapse, the roles of the UK and USA are of course releveant, but any amount of investigation will show the recklessness and indeed fraudulent manner in which the Icelandic banking industry expanded and flourished. Think of the £105milIion "investment" by a Qatari shiekh! I could even suggest that that the Icelandic management was telling porkies to the IOM management, stupid as they were to heed the words. A point I made to Doherty on the fateful evening of October 8th last year. Still no point in going back over that, but read the Tyndwall enquiry minutes.

Any suggestions that the Icelandic populce didn't benefit are I'm afraid very wide of the mark, Iceland was looked upon only a few years ago as one of the leading economies and one of the most expensive places to be on the planet. It was a leading emerging market.

The people had plenty of opportunites to change their corrupt political system and didn't. It was and no doubt still is an essentially feudal society (feudal as in political system), similar to Russia in fact with which it has plenty of dealings. This whole popularist view that it was the "fat cats wot done it" has been nurtured by the very politicians who supported them!

Having said that I agree 100% that the regulators, of every hue, Icelandic, UK and IoM, still have a great deal to answer for here. I made the comment many months ago that Hector Sants should have been working off his notice by now and nothing has changed my mind on that. Its small succor to know that the FSA will be disbanded by the next government.

And finally don't forget that Iceland precluded us from any cover from the guarantees that were in place, guarantees that supported the expansion and profiteering of ALL the Icelandic banks. The very guarantees that many were told would cover them 100% as the dying breath of KSFIOM was being exhaled!

And to add insuit to injury Iceland produced Bjork, who ruined the beautifull Joni Mitchell song "The Boho Dance", it doesn't get much worse as far as I am concerned!!!

@ Brabander

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Wed, 06/01/2010 - 23:37

I think you mistake my postings. I was merely posting news from the Ice News website and reporting what the poll, on the Guardian website, was suggesting. I agree with your sentiments entirely. I just mentioned that I don't think many of the Icelandic public were instrumental in causing the banks' dodgy dealings. If any of them were then I agree, they are culpable too! I believe a debt is a debt and should be repaid but I prefer it to be from those responsible for it. The President of Iceland has probably stopped this bill as he has many cobwebs and dealings in his closet he does not want revealed. I agree he should stand up and be counted!! I don't suppose the average English taxpayer is too happy in having to bail out greedy banks and disastrous governmental, financial decisions. They can look to the FSA as not having their best interests at heart!!!!! They made the decisions to actively support the Icelandic banks being in our territory and promoting vulnerable savings plans. They have much to answer for. I am not an Icelandic crusader, quite the opposite. I have kept up a volly of news articles criticising Iceland. I hold them fairly to blame for much of our woes. So I'm on your side, believe me but just want to blame the real culprits, not just lash out on some who may have been unaware of damages being done and stupid decisions being made.


  • Brabander
  • 15/10/08 31/05/09
  • unspecified
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  • Thu, 07/01/2010 - 11:58

Glen 07,
I accept yout points!
I am absolutely sure that the overwhelming majority of people in Iceland are not culpable and never benefited, to any major extent, from the reckless overseas expansion of their banks. It is also suspicious that the very people who benefited from many of the dodgy loans given out by Kaupthing move in the same circles as the president's wife (sometimes having the same passports). Google a few names and you will discover what I mean! It is no coincidence that the biggest Ponzi artist of all falls in the same category!
It galls me however that the very people to blame for this fiasco ie the politicians in charge in Iceland at that time (the Independance Party as well as the current president!) and the so called "elite" are now the most vociferous in rejecting any liability for the damage they caused. The president is, I believe one of the main culprits, as a populist he is, of course, not stupid and the Icelanders love that he puts a finger up to the greedy foreigners. He reminds me of the president of the Czech Republic, Vaclav Klaus who is also a populist and loves showing he stands up for his little country against foreign bullies. This gambit only works too well as is shown by his popularity.

Despite this I am still hopeful that, eventually, we will get at least 90% back but we will have to wait many years and we do not have the use of our money during that time.
I still maintain that bank depositors are NOT investors and I think it is pretty awful that we rank pari passu with the other creditors of the bank.
The lesson I have learned is that I will never trust any bank again.


Money moves

  • Wanda
  • 12/10/08 31/08/09
  • a depositor
  • Offline
  • Wed, 06/01/2010 - 13:59

This little snippet of news was in my local paper yesterday. "An unidentified buyer from Reykjavik, Iceland, bought a three-bedroom house on Washington Drive in St. Armands for $1.62 million, or nearly $500,000 less than the former owner paid in December 2005".

How fortunate for this "unidentified" buyer, who managed to hold on to their millions amidst the Icelandic meltdown. Unlike the majority of us poor suckers! Interesting to see that they are now investing their money in the US and not in their own country.

Taken from Huffington Post

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Thu, 07/01/2010 - 09:42

Taken from Huffington Post, dated 21st June 2009:

"Now, there are logical arguments that can be made to justify the IceSave agreements. Yes, there may be sufficient Landsbanki assets in England and Holland to cover savers in those countries, so perhaps the risk to Icelandic taxpayers is minimal. (By the way, Landsbanki's former owner, Björgólfur Thor Björgólfsson, has an address in London, a luxury lair courtesy of Iceland's unwashed masses - you want money, go after him! And who was working in these Landsbanki branches in England? Where are these people, what is the responsibility of the obnoxiously overpaid directors who worked there or anywhere else in this gigantic swindle factory?)"

Another fat cat......

Perhaps proof for the Serious Fraud Office..

  • fight theft
  • 10/10/08 28/05/13
  • a depositor
  • Offline
  • Thu, 07/01/2010 - 06:23

If this house buyer was a Kaupthing banker with is money hidden in the Caribbean (as supposedly is the case with many of these fraudsters) it may be worth bringing this news to the SFO for investigation. I cannot understand why Stanford has been jailed for his operations and Madoff got a 150 year jail sentence when the Kaupthing directors get 8 months! I hope the SFO Eva Jollie can get to results, justice and pay back sooner rather than later.

Icesave: Misunderstanding in the foreign media

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
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  • Wed, 06/01/2010 - 12:09

Taken from Ice News, dated Jan 6th, 2010:

Icesave: Misunderstanding in the foreign media

By Alex on Jan 6, 2010 in General, Iceland, International, MBL, Politics, Society

FT“Icelanders are not going to pay their debts generated at the time of the fall of the banks in 2008.” This is a common misunderstanding of the facts being played in the foreign media after the president of Iceland decided to send Icesave to a public vote.

News of the president’s ‘veto’ on the Icesave Bill travelled quickly over the globe, and it seems that many journalists are under the wrong impression that Iceland does not intend to pay the Icesave bill. Sky News was the first to come out with this misunderstanding that Icelanders did not want to pay the British and Dutch.

Beside Dutch and British media, German media have been quite active and there this misunderstanding lingers, as many German news channels continue to state that Icelanders have rejected paying back the Icesave debts. Among the strongest headlines seen in German news media was in the Financial Times Deutschland, where the headline stated that the President of Iceland has called new a crisis down upon Iceland.

The Guardian is closest to the Icelandic government’s stated truth, saying that an argument has been ignited between the President and the heads of the Icelandic Government. By his action the president had put Iceland in further uncertainty, but the Prime Minister has promised that the debt will still be paid.

Most media agreed that this action will have unforeseen long-term implications, both politically and economically. reports

the latest on Iceland and Icesave,

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 05/01/2010 - 15:30

From Times Online January 5, 2010

Iceland blocks repayment of £2.3bn to BritainRobert Lindsay 100 Comments
Recommend? (4) The British Government's already stretched finances came under further pressure today when Iceland's President vetoed the repayment of a £2.3 billion loan from the British taxpayer.

The cash was paid out by Britain in 2008 to compensate UK investors in Icesave, whose parent bank Landsbanki had collapsed.

Alistair Darling, the Chancellor, handed over the money because he had promised that UK savers would not lose a penny to Landsbanki's bankruptcy. Iceland's official compensation scheme did not have the necessary funds.

Today Iceland's President, Olafur Grimsson, vetoed a bill that would have enforced the repayment of the money by 2024.

However, Mr Grimsson today refused to sign off the second, more tightly worded bill after fierce political pressure from the country's opposition party and a petition against the Bill signed by nearly a quarter of the country's voters.

Under Iceland's constitution there must now be a referendum on the issue.

But the repayment is deeply unpopular in Iceland. A poll in August found 70 per cent of the country was opposed to it.

A UK Treasury spokesman said: “The Treasury will consult with colleagues in Iceland to understand why this Bill has not been passed and will work with them, the Netherlands and within the EU to resolve this issue as soon as possible.

"The UK Government expects Iceland to live up to its obligations."

Thousands of savers in the Netherlands were also hit by the collapse of Landsbanki. The Dutch Government said today that it was "extremely disappointed" by the veto.

The Icelandic Government issued a statement to try to reassure Britain and the Netherlands. It said: "Despite the President‘s decision, the Government of Iceland remains fully committed to implementing the bilateral loan agreements and thus the state guarantee provided for by the law."

Iceland’s parliament approved the Bill last week by a narrow majority of 33 votes to 30.

Its passing was seen as a way to help boost the country's bid to join the European Union and get its shattered economy back on track.

But the Bill still required the approval of Mr Grimsson, who was petitioned by 40,000 people asking him to refuse to sign it.

Many of the 320,000 population resented bailing out foreign customers of banks that were supposed to be supervised by other nations.

The Bill is also opposed by the main opposition party.

This is only the second time in Iceland’s history that the President has not signed into law a Bill approved by parliament.

The money represents 40 per cent of the country's gross domestic product but Iceland said that it planned to repay it gradually to savers in the UK and Netherlands by 2024.

The British and Dutch governments say that more than 320,000 savers lost money when Landsbanki failed in October 2008.

From The Telegraph
Iceland's president has said he will block a £2.3bn deal to compensate the UK for coming to the aid of 300,000 customers of Icesave, the failed internet bank.

Published: 1:02PM GMT 05 Jan 2010

President Grimsson's decision comes on the back of public opposition in Iceland to the bill, which would force the country to pay back the UK and Dutch governments for compensating savers who lost money in Icesave accounts following the collapse of Landsbanki. There have been large demonstrations against the agreement, which will saddle each citizen with £11,000 of debt and amounts to 40pc of Iceland's gross domestic product. Iceland's parliament can either drop the bill or put it to a referendum.

The country's president is now at loggerheads with its parliament which last Wednesday passed the deal by a narrow margin. Iceland has been one of the biggest casualties of the global financial crisis, and the parliament passed the accord in the hope that it will help unlock further loans from the International Monetary Fund (IMF).

"The British and Dutch governments will do anything they can to hold the payout from the IMF" said Lars Christensen, an analyst at Danske Bank. " This is a big big blow for the Icelandic governement's efforts to come back into the global economy."

Iceland's currency collapsed and its Government was forced to turn to the IMF after the financial crisis led to a systemic failture of its banking system, with Landsbanki, Glitnir Bank and Kaupthing all falling.

Kaupthing collapsed in October 2008, along Glitnir and Landsbanki, leaving 300,000 British savers unable to access their money and institutions nursing billions in losses. The UK was eventually forced to freeze Kaupthing's assets in the days before its collapse amid fears that money could be transferred back to Iceland.

Landsbanki under restriction due to FSA regulations before terro

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Mon, 21/12/2009 - 20:13

What about KSF though?

Taken from Ice News, dated 16/12/2009:

Landsbanki under restriction due to FSA regulations before terrorist laws applied

By Misc. Editors on Dec 16, 2009 in Finance and Business, Iceland, MBL, United Kingdom

A letter sent from the UK FSA, Financial Services Authority, to Landsbanki on the 3rd October 2008 established that assets were frozen five days before the British government introduced the terrorist law.

According to sources from a local Icelandic newspaper (Morgunbladid), the letter referred to the legislation of financial services and markets from the year 2000. GENPRU, the rules of supervision, said that the FSA had decided to put Landsbanki under certain conditions, including an unbound account in the UK containing no less than 10 percent of the overall deposit amount held on permanent deposit in British pounds.

These accounts would then have to increase up to no less than 20 percent of the funds before 6th October. During this time, Lanksbanki claimed it was almost impossible to provide such funds under extremely short notice. The FSA also stated that the account must be held at the British central bank, the Bank of England, or at a different account approved by the FSA

Icesave repayment ..... or not!

  • grapow
  • 20/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 05/01/2010 - 18:37

It seems that the UK's negotiations with Iceland were only ever going to do enough to protect their own backsides with the monies they had already credited to affected Icesave savers. This now seems doomed in any event.

I wonder what ever happened to all the rhetoric we heard shortly after the initial collapse that the UK Govt represented IoM in international affairs - doesnt see to have any substance at all? How could an apparent settlement be reached for Landsbanksi but not KSF?

Just to keep you informed,

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Wed, 06/01/2010 - 07:51

Just to keep you informed, PPDG have been liasing with Landbanski DAG for many months on this very issue, we are actively pursuing this whole issue. We'll be in postion to let you know more in a short time as this turn of events needs a bit of discussion, there are many issues here that need addressing. Keep in mind Iceland was happy enough to profit from it's badly run ponzi scheme banks, they have a guarantee we want upholding, the UK shoukld have been negotiating for IoM and Gurnsey and the FSA stood and watched as it all happened. A complicated little web!!

So until then this is the Comment in the Times this morning by Roger Boyes who wrote the illuminating "Meltdown Iceland".

From The Times January 6, 2010

Iceland out in the cold as it seeks to share blame over collapseRoger Boyes: commentary
Iceland may seem to outsiders to be at war with the world, stubbornly refusing to help to clean up the messy aftermath of its financial crisis.

In fact, as President Grimsson’s veto has demonstrated, the island nation is at war with itself; unsure where responsibility for near-bankruptcy lies. Its confusion over the issue is rapidly making a community of 300,000 ungoverneable. How much sovereignty should it surrender to foreigners, to the European Union, or the International Monetary Fund (IMF), to which it has turned for financial help? How far has any country mired in debt already surrendered chunks of its political independence?

Those are the critical issues underpinning the rejection of the amended Icesave deal — and they are stirring emotions on the island.

“I am in rapture,” said Birgitta Jonsdottir, a parliamentarian. “I started crying during his speech.” Tears of joy, apparently. It had been widely expected that the President would approve the Bill, narrowly passed in Parliament late last month, that would guarantee repayments to Britain and the Netherlands beyond the cut-off date of 2024.

The Government has urged compensation as a symbolic move, signalling that Iceland was ready to honour its obligations, that it was going to develop policy with the IMF and that it was a credible candidate for speedy membership of the European Union.

But the President threw out the Bill, forcing the Government either to drop the legislation or organise a referendum. The chances are strong that Icelanders would vote against further concessions to depositors and scrap the new law.

“Olafur Ragnar Grimsson says he is convinced that his refusal to sign the Bill will lead to unity within the nation,” said Egill Helgason, the influential television pundit. “That might be wishful thinking. But what options does the Government have, except to resign?”

Critics accused the President of populism. Others said that he was playing to the Independence Party, the conservatives who led the country into crisis in the first place through their patchy regulation of Iceland’s banks.

The financial sector swelled as a result to several times the country’s gross domestic product and dwarfed the traditional economic bedrock of the fishing industry.

The Independence Party is now in opposition. David Oddsson, its former leader, the long-standing prime minister and former head of the central bank, has become editor of the main daily newspaper and has been using it to spearhead a campaign against the Icesave deal, stirring up nationalist resistance.

A deal would be painful and deeply unpopular on the island. The calculation is that it would saddle every man, woman and child with an additional £10,000 of debt. That is just a fraction of Iceland’s total debt, estimated at £35 billion.

But Britain has made plain: no Icesave deal, no fast-track for the EU. The harder Britain pushes for this linkage, the more the British look like the bad guys on Iceland.

Some Icelanders accept that their society has to work out where responsibility begins and ends. It is a complex calculation, though, which has to take in the apparent irresponsibility of investors and the possibly criminal liability of Icelanders involved in the banking boom. Too complex perhaps for what is set to be a polarising referendum.

“Is Iceland responsible or not?” said the politics professor Silja Bara Omarsdottir. “Could the people who saved with Icesave know that they were taking a risk and therefore should take the hit themselves? And since we are doing this, should we also maybe take on the accounts on the Isle of Man and Guernsey, which neither the Icelandic or British Government seem to want to take responsibility for? But no, nobody thinks that we are fighting for justice, just Icelandic interests.”

Roger Boyes is the author of Meltdown Iceland: Lessons on the World Financial Crisis from a Small Bankrupt Island (Bloomsbury)

Bank grabs Spurs chief's jet

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Mon, 21/12/2009 - 08:52

Travel nightmare follows snowfall..... China blocked green deal - Miliband..... Cowell in job offer to chart rivals..... We understand your grief - Harry..... Investment move as soldier mourned..... Auschwitz gate sign recovered..... Brittany death 'natural causes'..... Palaces upkeep data may be revealed..... Police probed over toddler error..... Row over Lockerbie bomber reignited.....
Travel nightmare follows snowfall..... China blocked green deal - Miliband..... Cowell in job offer to chart rivals..... We understand your grief - Harry..... Investment move as soldier mourned..... Auschwitz gate sign recovered..... Brittany death 'natural causes'..... Palaces upkeep data may be revealed..... Police probed over toddler error..... Row over Lockerbie bomber reignited.....
Daniel Levy
Grounded: Daniel Levy's jet has been repossessed
Bank grabs Spurs chief’s jet

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From an article in the London Evening Standard, dated 20th July 2009.

Hope the sum shows in the figures from the liquidator!

A jet belonging to the chairman of Tottenham Hotspur has been repossessed in a dispute over unpaid mortgage payments.

The British subsidiary of Icelandic bank Kaupthing acted after Daniel Levy's English National Investment Company (Enic) failed to keep up repayments on a £15 million loan.

The £13 million plane was grounded at Stansted airport by administrators Kaupthing Singer & Friedlander, which has a mortgage on the plane, after Enic refused to pay. Enic says the bank has failed to release £1 million in deposits after it was granted a moratorium on payments by the Icelandic Financial Supervisory Authority after Iceland's financial meltdown.

Mr Levy's friends have described the action as “small beer”.
Bookmark and Share

Article from Huffington Post

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Sat, 19/12/2009 - 04:26

Although dated 16th June, 2009, this article, written by an Icelandic journalist, shows the sort of corrupt practices were going on. It would seem the common Icelandic person is as fed up as were are with their authorities and banking magnates!!! I guess this is what the Special Prosecutor is honing in on!

"Europe's Biggest Financial Swindle Since World War II
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Read More: Europe, Friedrich Nietzsche, Iceland, Iceland Bank Crisis, Iceland Bankrupt, Iceland Banks, Iceland Economic Crisis, Iceland Economy, Iceland Economy Collapse, Iceland Financial Crisis, Iceland Global Economic Crisis, Iceland National Bankruptcy, Johanna Sigurdardottir, Johanna Sigurdardottir Iceland, Nietzsche, World News

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"Is there a real will to deal with the problems here?"

Eva Joly, French-Norwegian magistrate judge and economic crime-fighter, on the attitude of the Icelandic government towards the investigation into the country's economic collapse.

We tend to think of revolutions as single linear events, resolved in a straightforward manner soon after the status quo is called into question by forces that hold some clear moral or technological advantage.

Unfortunately, revolutions are long, messy affairs with no clear start and no clear ending. Four years passed between the fall of the Bastille and the Reign of Terror; another six years would pass before Napoleon crowned himself emperor. Four years passed between the 1929 stock market crash and the low point of the Great Depression; the world did not recover until after the Second World War.

I have always believed, ever since the Icelandic economy came crashing down with the country's bank cabal, that our politicians have failed to grasp the enormity of these catastrophic events. I've also seriously doubted if there really is a sincere political will to investigate them, to really get to the bottom of what is now being described as Europe's biggest financial swindle since World War II. 

It was to be expected that the administration of the conservative Independence Party, whose reign laid the ground for the country's swamp of sleaze and corruption, would drag their feet initiating any sort of investigation, but no matter where on the political spectrum they are, Icelandic politicians seem to view this investigation as some kind of a side issue. It took months to establish the office of the Special Prosecutor which has been starved of funds from the beginning; the banks and their boards are still littered with incompetents who oversaw the old swindle mills. How clueless Icelandic politicians are was especially evident during this spring's election campaign. I'll never forget watching the largest televised debate before the election, where nary a single word was uttered about the collapse or the investigation, but candidates bickered about what quick-fix would save the country - more aluminum plants, EU membership. There was something surreal about these exchanges, bringing to mind scenes of a mass destruction - the mad elephant has trashed the living room, and everyone is squabbling about how to pick up the pieces, with the elephant still strolling around the room.

Icelanders are anxious to grasp any encouraging economic news as a sign that good times are just around the corner, and that the massive protests in January 2009 that brought down the Independence Party-led government were overly-dramatic, unnecessary. Instead of focusing on any possible misdeeds in the past, many say, let's concentrate on the future and build our country back to its rightful place as the world's most prosperous country.

Eva Joly, the famous Franco-Norwegian economic crimefighter hired to help the Icelandic government recuperate the funds stolen by insiders when Iceland's economy melted late last year, has just given an ultimatum to the newly-elected center-left government: remove the disqualified State Prosecutor (whose son is involved with one of the banks under investigation) and give me the resources to do my job properly, or I walk. Joly, who has been in her advisory post for over two months and is no doubt sick and tired of dealing with Icelandic political hillbillies, said on Icelandic state television that the fact that this had not been done yet gave "very wrong signals, making me ask myself, is there a real will to deal with the problems here?"

Fortunately, Ms. Joly's threat was taken seriously by the government; they know that the Icelandic public views Madame Joly as a sort of a guardian angel, someone who is not afraid to speak the truth, but more importantly someone they can trust, a characteristic in short supply among Icelandic politicians.

One of the most telling of Ms. Joly's remarks was her statement that her investigation was the most important of its type in recent European history, and would take five years to do properly. In this Age of Twitter, she might as well have asked for a century. Everyone wants to believe that good times will roll long before then. It's one thing to take a domestic vacation this summer, but to have no prospects for foreign vacations for the foreseeable future is beyond their comprehension. Life was so good when Iceland was sitting on top of the UN's prosperity lists that they just can't conceive of a less extravagant lifestyle.

Former owner of Landsbanki, Björgólfur Thor Björgólfsson, and his wife, Kristín Ólafsdóttir, enjoying the good life on a yacht in Cannes last month (furious Icelanders have recently been posting this photograph on Icelandic blogs as evidence both that crime pays and that money doesn't necessarily buy taste). Every woman, man and child in Iceland stands to be indebted to the tune of $16,000 to repay British customers who deposited their savings into "Icesave" accounts in the bank's London subsidiary. The London bank granted a $327 million loan to one of Björgólfur's companies, whose outstanding debts to the now state-owned Landsbanki amount to $310 million.

Iceland's self-styled tycoons have parked their money in foreign bank accounts, just waiting for the market to bottom-out. Then they'll swoop in, buy up all the over-mortgaged properties from the nouveaux pauvres, and strut like princes again. This pesky investigation outrages them. How dare she try to take away "our" money! "She's obviously biased against us," they say, "and is only using the investigation to further her cult of personality and leftist political goals."

Every day there's some news story demonstrating that they just don't have a clue. The mayor of one of Reykjavik's suburbs just can't understand why he should resign for giving lucrative contracts over to his daughter's firm. The former CEO of one of the failed banks sees nothing wrong in granting himself a very substantial loan with suspicious terms, to say the least, in order to lower his taxes (the loan is now being investigated) . The State Prosecutor can't see why he should resign just because his son was the CEO of one of the bank's main shareholder. The head of one of the "new" government-owned banks announces that he can't see any legal reason to try to reverse the "old" bank's decision to forgive loans its officers and directors took out to purchase bank shares in a fraudulent attempt to manipulate its stock price. The head of the conservative Independence Party raised the price of gasoline at the stations he owned because of new government taxes--long before the taxes were scheduled to take effect.

Meanwhile, home break-ins have increased 70%, the unemployment compensation fund is expected to run out of funds this fall, nearly one-third of Icelandic households is expected to become insolvent this year. Young workers are leaving for greener pastures in Denmark, Norway, and Canada. Nearly 80% of Icelanders believe the economic system is fundamentally corrupt.

Half of Icelanders believe that this corruption has infected the media. The major media outlets are owned by the same individuals widely suspected of manipulating the economy for their personal benefit. With few exceptions, the reporters repeat the right-wing narrative that the economy is already on the rebound, and that the government should loosen its controls.

Fortunately, the Internet has revolutionized Iceland more profoundly than perhaps any other nation. A new Facebook page protesting the government's agreement to pay British and Dutch investors for losses suffered by one of the banks has grown in little over two weeks to include over 31,000 members--over 10% of the entire population (imagine 30 million protesters in America). Dozens of dedicated bloggers (my favorite, Lára Hanna, unfortunately not in English) put together an alternative narrative from the disparate pieces of information they learn from friends and family.

In his classic work, The Structure of Scientific Revolutions, Thomas Kuhn postulates that, like political and social revolutions, scientific revolutions are not clean affairs. Rather, they come about when disparate facts that can't be explained by the existing paradigm are gathered by a minority of (typically) young scientists, who form a new framework that encompasses the old and new data. The older scientists, whose careers are invested in the old paradigm, resist these challenges by creating exceptions to their rules, then exceptions to the exceptions, until the old theories are supplanted when the young scientists obtain positions of authority within academia and research organizations.

Iceland's existing paradigm is not dissimilar to Friedrich Nietzsche's Last Man. Icelanders (or at least the financial and political elite that led us over the cliff) believed they were better at everything than everyone else, and deserved all the rewards commensurate with that status. It was simply unacceptable and inconceivable that they could ever fail. And for several years, we all believed them.

Now, we've all seen the Emperor's new clothing, and most of us have enough modesty left to be shamed by it. The new paradigm is out there, building itself up in the new media piece by piece. The investigation of Eva Joly and Special Prosecutor Ólafur Þór Hauksson is essential to its construction."

Icelandic banker issued travel ban

  • glen07
  • 21/10/08 n/a (free)
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  • Fri, 18/12/2009 - 23:56

I know this refers to another Icelandic bank but obviously the net is starting to tighten on what's been going on in Icelandic banking.

Taken from Icenews, dated 18th December 2009:

"Icelandic banker issued travel ban

By Alex on Dec 18, 2009 in Finance and Business, Iceland, MBL, Politics, Travel and Leisure, United Kingdom

kronur1The former Chairman of the Board at Byr Savings Bank in Iceland, Jon Thorsteinn Jonsson, has been issued with a travel ban due to the current investigation into Byr and the Exeter holding company being carried out by the Special Prosecutor. He is the only person to so far be barred from leaving Iceland by the Special Prosecutor.

According to Frettabladid, the state had good reason to issue the travel ban following the Special Prosecutor’s November house searches of Byr and MP Bank related to the case – not least because Jonsson has recently changed his legal residence address to London, making him highly likely to leave Iceland at any time.

Jonsson was arrested during the house searches at the end of November, like other people under investigation were also. He was then held longest of all, remaining behind bars for nearly 24 hours before release.

The travel ban lasts over the weekend and it is not yet known whether the Special Prosecutor will ask for another."

JJB Sports in further trouble as takings are cut by half

  • glen07
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  • Thu, 17/12/2009 - 23:47

I believe they had loans from Kaupthing!

Taken from Evening Standard, 16th December 2009:

"JJB Sports in further trouble as takings are cut by half

CRISIS-riven retailer JJB Sports today laid out the true extent of its trading woes as it admitted takings were more than 50% down on a year ago.
Dressing down: the retailer is still having problems getting stock as suppliers are worried about its future

In a disastrous trading statement which sent its shares plummeting, the group said like-for-like sales, meaning stores that were open for more than a year, fell 37% in August compared to the same weeks in 2008.

That dreadful figure did improve slightly in September, October and November, but the first three weeks of December have seen trading plummet again, back down to 32%.

Including the impact of putting the Qube and Original Shoe Company chains into administration, revenues in the past five months are down 52% on the year.

JJB is still facing serious difficulties securing stock since suppliers are concerned that the business might not survive, having only narrowly avoided administration earlier this year.

That has put the retailer in a Catch-22 situation, since it cannot get customers to open their wallets when the shelves are devoid of the latest gear.

Indeed, JJB’s interim trading figures show customers are continuing to stay away from its stores. In September and October sales were 27% lower than at the same time last year.

JJB tried to underplay the sales collapse by blaming it on tough comparables, since it l aunched a sale on 25 November last year.

But that sale went on until March this year as the retailer desperately tried to flog stock, suggesting that its effects will be a longer-term drag on trading figures.

Back in September, when JJB saw its half-year l osses soar by 230% t o £42.9 million, chief executive Sir David Jones said suppliers were “very uncertain about the group’s future”.

Today shareholders were feeling the same, with a big sell-off sending shares down 5%, by 1¼p to 26¾p.

Brokers issued a stream of negative notes, with Seymour Pierce acknowledging last week’s appointment of former DSGi manager Keith Jones would “strengthen the board”, but flagging up concerns over the “longerterm viability” of JJB’s strategy.

The retailer used around a third of the £94 million it raised in October in order to pay off debts with Bank of Scotland.

JJB today claimed its range of sports gear was improving, with stock levels currently standing at £81 million, but that is almost a fifth lower than the same time last year.

The company said that those problems meant it was “cautious about Christmas and New Year”.

It said trading is expected to remain “difficult”, but added that it believes stock levels will be back to normal in the first quarter of next year."

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  • expat
  • 10/10/08 31/05/09
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  • Fri, 18/12/2009 - 07:56

This is a link to an article in the Financial Times along similar lines.

Mike Ashley facing investigation into Icelandic bank collapse

  • glen07
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  • Thu, 17/12/2009 - 23:12

This article is taken from the Evening Standard, dated 16th December 2009

"Ashley in Iceland probe

Mike Ashley was today facing an investigation into his relationship with Iceland’s banks and rival sports retailer Chris Ronnie.

Ashley, founder and deputy chairman of Sports Direct and owner of Newcastle United FC, looks set to be dragged into a probe by the Serious Fraud Office (SFO) into the failed Icelandic bank Kaupthing. Ashley was a depositor with some of Iceland’s banks and reports said the SFO plans to look at whether he may have also taken out loans.

Investigators are also said to want to know if Ronnie, the former chief executive of rival JJB Sports, may have indirectly received some of the loans.

The SFO plans to look at what happened immediately before the demise Mike Ashley was a depositor with some of Iceland’s banks of Kaupthing and how some customers were able to withdraw funds days before its collapse."

In addition, it wants to examine the scale of loans, including those to property tycoon Robert Tchenguiz, who borrowed £1.25 billion to buy stakes in Sainsbury’s and Mitchells & Butlers.

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From The Times December 21,

  • expat
  • 10/10/08 31/05/09
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  • Mon, 21/12/2009 - 07:15

From The Times December 21, 2009

Takeover bid by Sports Direct 'broke City rules'Marcus Leroux, Helen Power Recommend? (3) Sports Direct, the retailer controlled by Mike Ashley, has been reported to the Financial Services Authority (FSA) for allegedly breaking City rules in its attempt to buy a smaller rival, The Times has learnt.

The complaint by Blacks Leisure exposes Mr Ashley to yet more regulatory scrutiny. He already faces separate investigations by the Office of Fair Trading (OFT) and the Serious Fraud Office (SFO).

It is understood that Blacks has told the FSA that Sports Direct made an approach to buy it in February without disclosing to either the company or the stock market that it had already lost control of a 29.9 per cent stake it once held in its smaller rival.

Mr Ashley, who owns Newcastle United Football Club, last night declined to comment.

Sports Direct approached Blacks after it learnt that a private equity group had expressed interest in its sportswear rival. Simon Bentley, Sports Direct’s acting chairman, is a former chief executive of Blacks.

It is understood that Blacks has told the FSA that Sports Direct intimated at the time that it still held a substantial stake in Blacks. The market also believed this to be the case.

But, in an apparent breach of FSA rules, Mr Ashley’s company did not tell Blacks that it had lost control of its stake when Kaupthing Singer & Friedlander, the Icelandic bank that funded its acquisition of the Blacks shares, collapsed.

Insiders said that the stake actually reverted to Ernst & Young (E&Y), the administrator of Kaupthing, three months earlier.

A source close to Sports Direct conceded that the company indicated to Blacks it still owned the stake. “The discussions we had were absolutely on the basis that we had that 30 per cent. I’m quite certain had there been agreement, Kaupthing would not have stood in our way,” the source said.

Sports Direct is still in dispute with E&Y over its lost stake. Mr Ashley’s company believes that it bought back the shares from E&Y, although the accountant disputes this. Blacks, which operates as Millets as well as Blacks Outdoor, only discovered that Sports Direct had lost control of the stake in July when Sports Direct’s auditors forced the company to write off its shareholding.

A source close to the company said: “The Blacks management was incensed that this wasn’t disclosed. If the shares were under dispute they couldn’t vote in a takeover.

“They’ve informed the FSA because they believe Sports Direct has failed in its duty to inform the company of changes to is shareholding.”

Some observers believe that Sports Direct may have been intending merely to foil a possible takeover of its smaller rival by Lion Capital, the private equity owner of the Cotswold Outdoors chain.

The offices of both Sports Direct and JJB, its rival, were raided by the Office of Fair Trading in September over allegations that they colluded to rig the prices of goods in their stores. The allegations are strongly denied by Sports Direct, although JJB has given evidence to the regulator in return for leniency.

The SFO is pursuing a parallel criminal investigation after a referral from the OFT. An earlier inquiry by the Competition Commission looked at cross-holdings in the famously incestuous sportswear sector. The Competition Commission found the sale of five stores by JJB to Sports Direct raised antitrust issues.

A source close to Sports Direct said last night that the recent appointment of Keith Hellawell, the former drugs czar, as chairman of the company was intended to help the sportswear retailer with regulatory inquiries.

Mr Hellawell was previously the chairman of Goldshield, the generic pharmaceuticals business, which was the subject of a long-running SFO inquiry into alleged price-rigging, a practice said to have cost the National Heath Service hundreds of millions of pounds. The SFO’s case, nicknamed Operation Holbein, fell apart after a House of Lords ruling in an unrelated case created a technical legal impediment to the groundbreaking prosecution.

E&Y, Sports Direct, Blacks and the FSA all declined to comment.

? Mike Ashley, the retailing billionaire behind Sports Direct, has also had a torrid time with his football club, Newcastle United.

Mr Ashley appointed Seymour Pierce to sell the club last summer, but had to withdraw it from the market when it became clear there were no serious bidders.

The sportswear tycoon, who will almost certainly make a loss on his investment in the Magpies, is disliked by many of the club’s fans. His recent decision to rebrand its historic stadium, St James’ Park, as did little to improve relations.

However, the tide may be turning for Newcastle, who yesterday beat Middlesbrough 2-0 and are at the top of the Championship. If the club is promoted to the Premier League next year, Mr Ashley will hope to be able to sell it at a reasonable price.

Majority in Iceland want to reject Icesave bill

  • glen07
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  • Mon, 21/12/2009 - 08:45

Taken from Ice News, dated 19th December 2009:

Majority in Iceland want to reject Icesave bill

By Alex on Dec 19, 2009 in Finance and Business, Iceland, MBL, Politics, Science & Technology, Society

icesave1-0392394A large majority of the Icelandic public want parliament to reject sovereign responsibility for Icesave in the Netherlands and the UK, according to a high-tech, but non-binding referendum.

Around 7,500 people took part in the secure electronic ballot commissioned by the Eyjan news website. To take part in the referendum, eligible voters had to have an access code sent to their online banking service – meaning nobody could vote more than once.

69 percent of voters said that the Althingi parliament should reject the Icesave bill and not force Iceland to take responsibility for the debts of a private company; 29 percent said parliament should approve the bill; and 1.6 percent took time out to vote that they have no solid opinion.