Mysteries of Oligarchs and the Icelandic Banking System Come to Light

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2008-12-10 08

The aftermath of the financial collapse is turning into a farce. The nation wants answers and people are not getting any. The affairs of the collapsed banks are carried out in a cloud of secrecy.

The same people who took all the decisions that led to the crash are still in charge—in the banks, in the monitoring bodies and in the government. And the minister of banking, well, he seems to be in another world. And the Financial Supervisory Authority... they seem to be on another planet than the rest of us.

A few examples of how affairs are being handled.

When New Glitnir Bank was established a woman was hired as the bank’s director. She had been working next in line to the old director. A story emerged. She had bought shares in the bank for a ridiculous sum of money with a loan from the bank. But then mysteriously all this disappeared from the books when the bank crashed. How did this happen?

Somewhere in the bank a mistake had been made so that the transfer never took place. For some time, she has revealed, she thought she owned the shares but she didn’t. Then she was going to use her right to vote on the annual general meeting of the bank and whoosh. She could not be found in the books and found out she had no shares.

Tell us another one, please. How on earth could any serious banker not know that a transaction of nearly two million dollars had not taken place? And these were her own personal financial affairs. Do we trust this person to run one of the new state banks? No. Does the Financial Supervisory Authority trust her? Yes. It has just published a report where she is completely whitewashed.

Then there are the companies owned by one of the most “renowned” business moguls in Iceland, who has been purchasing whole airlines and selling them to companies that he owns too to be able to borrow even more from the bank he also had a majority stake in.

His companies, that have been involved in some dodgy business affairs, to say the least, have not returned annual reports to the right authorities for years. And what have the authorities done? They have written letters, sincerely yours, to ask him to return these reports. He has not been fined, not been punished in any way for turning a blind eye on good business practice.

Then there is the state tax investigator who badly wants to look into all the affairs of the bank branches in Luxemburg. If I have not misunderstood everything, those branches have been nationalized too, and belong to the state and therefore to us. Not a simple matter, say the return committees, hired by the state to handle the affairs of the bankrupt banks, and these bank branches deny access to those books.

A high official in the ministry of finance has commented on this saying that our tax investigator has no business peeking into the business of our banks in other countries. Hello. Everybody has known for years that Luxemburg was exactly the place where money mysteriously disappeared into accounts in so-called tax paradises in the Caribbean and elsewhere. This is the place where all dodgy cheques ended up in.

Strangely enough this high official had some shares in Landsbanki which he sold, at exactly the right time, after a meeting with the British authorities last summer where Icesave was discussed. He, like the new director of Glitnir, has been whitewashed.

And then there are the inspectors. Oooh, the feared inspectors, who have been hired to look into this mess and inspect where it all went wrong. Auditor KMPG was hired shortly after Glitnir crashed, to inspect, to turn over the books and ransack every hidden detail.

Every single person who has been following business affairs in Iceland over the past few years knows that the great auditor KPMG Iceland was the auditing company of the now failed bank. And that this great company did not only have Glitnir as a customer but also audited the accounts of all the major owners of Glitnir, like Stodir, FL Group and Baugur Group.

Our minister of banking said yesterday that he had not been aware that KMPG had those ties. Where has he been for the past few years? Sleeping? And now KMPG has said that it wants others to inspect what they have been inspecting. Tell us a new joke, please.

And where does all this information come from, you might ask. The Icelandic media must been having a field day investigating all this? No, this information does not come from the media.

All these stories that I have mentioned here, have been revealed on blogs by individuals who are flabbergasted, disgusted, shamed and angry. The traditional media, largely owned by the same oligarchs that have shamed our country, do reluctant and inaccurate follow-ups like shamed dogs beaten by their owners. It’s appalling.