Auður Capital. Bullet loans and the Manifesto.

Auður Capital is a financial company founded by women.

This is from their website: “Audur Capital is a financial services provider, unlike any other you may know. Our company is founded by women with a vision to incorporate feminine values into the world of finance. We are on a mission to unlock and create new value with a more balanced set of values.

The company has been a self proclaimed “saviour of banking” as this BBC article shows. Another article from The Guardian is similar. This sounds very good, a bit naive perhaps but could be sold to a lot of people.

The company was founded by two women, Kristín Pétursdóttir a former Kaupthing exec who was the assistant CEO of Kaupthing daughter company, Singer and Friedlander in London. She quit the bank late 2006 after having sold her shares in 2005.

According to DV newspaper she got a so called bullet loan. A defintion can be seen in this Daily Telegraph article about Iceland.One of the major areas of concern is the amount of money allegedly lent by the banks to their employees and associates to buy shares in those same banks, simply using those same shares as collateral. These loans – known as “kúlu-lán” – allowed borrowers to defer paying interest on the loan until the end of the period, when the whole amount plus interest accrued is due.

The fact about those loans was that only selected people, friends, family, politicians and selective clients could get them. They made the loans so that there was no way one could loose money on them, and if things went badly, you walked away with nothing, instead of massive debts like regular loans.

This even went so far that days before the whole banking sector in Iceland collapsed, Kaupthing wrote off many of those loans to their employees and owners. Incredible amounts of money, they got, but never had to pay back.

This bullet loan was according to DV newspaper around 900 million ISK, she got, sold and made a hefty profit she used to start up Audur Capital. The regular Icelander believes those loans are just as blood money, dirty money given to certain people to make sure they profit and the regular bank customer has to pay for it.

The loan is not visible in the banks annual books because she did not use a holding company because bankers could not start their own holding companies to manage stock options and personal loans from the bank until 2006. According to the philosopy of Auður Capital : “We are fiercely independent, risk aware and straight talking and we believe in profit with principles and emotional capital. Those are our values and they are very much in the DNA of our company. Let us elaborate: Independence is important to us because it provides the freedom to always put our client’s interests first. Independence is reflected in our ownership and in every way we do business. We will not engage in activities that may bias our behaviors and investment decisions on behalf of our clients.

The question is if taking “bad money” that is in the end paid by the general savings client of the bank, and run away with the profit, is it moral?audurcapital

Next is Halla Tómasdóttir, the other founder, was the Managing Director of the Iceland Chamber of Commerce before she started Audur Capital. There are only two things to say about her, the Iceland Chamber of Commerce did pay for, and fiercely promoted the disasterous Mishkin report. The report that was designed to lie to the world and to Icelanders about the reality of the economic status of Iceland. To deny that is futile, and only shows the delusional state of those who do.

The second thing is the Manifesto presented by Halla Tómasdóttir for the Icelandic Chamber of Commerce that would show the way into the future. This is a rough translation of the manifesto and in our view, completely contradicts the core values, the philosophy and all that crap Audur Capital stands for. So many who have read this agree that this could be looked upon as an attack on Icelandic culture. A wet neo-conservatist dream:

The Manifesto:

How will Iceland be the best in the world?

The Icelandic Chamber of Commerce will be 90 years old this year, and from the beginning the ICC has been in the forefront, creating a better environment for commerce. At today‘s Commerce conference, Halla Tómasdóttir, the CEO of the ICC introduced a new manifesto where the criteria is laid out for Iceland to be the best in the world. The manifesto is here below.

The best business environment in the world

-Long Term image campaign
The government and the business industry work towards long term image of Iceland. Measures will be coordinated and funds distributed specifically to follow a clear policy

-Flat and low taxes
Individual and corporate income tax, as well as VAT will be merged into one low flat tax without exceptions. Tolls, commodity tax and other special taxes will be disbanded. The tax environment will never be worse than than the best in our neighbouring countries.

– Land of entrepreneurs
The government sets the goal to make Iceland a prime land for entrepreneurs and by that guarantees new employment for years to come.

– Self made regulations
Restriction and limit setting rules will be disbanded of all types of business and the business industry will increasingly given the opportunity to make its own rules.

The best education in the world

-Freedom to choose and competition

Private parties take over the educational institutions, but the state will still finance education of the elementary, primary and college stages. Research funding will increasingly be diverted into competitive funds.

– Language and cultural literacy

English will be taught parallel Icelandic studies from the age of 5 and educational availability of English choices in education increased dramatically. Other languages optional, nobody graduates college with efficiency in less than three languages. Teachings in intercultural communications to be increased dramatically on all levels of education.

-Creativity and initiative

Creativity and initiative on all educational levels to be encouraged. Arts – industrial and book learning will be emphasised equally. From elementary school the children will be schooled in creativity and entrepreneurship.

-The best schools in Iceland and in the world
To attract the best students and scholars to Iceland, at the same time to encourage Icelanders to keep on, and increase their studies abroad in the best universities in the world, on both sides of the Atlantic.

The best bureaucratic system in the world.

-Environment for employment opportunity
No direct employment creations on behalf of the government and state, for example by large scale industry like power building power plants. The private sector will be given the chance to utilise the best and interesting opportunities.

-The best public sector employees in the world
Public sector employees to get the same benefits and duties as the private sector employees

-Simplicity and transparency
One only needs to go to one place online where the official government service can be clearly seen and everyone can understand.

-Fewer ministries and government institutions
Ministries will be decreased to seven by creating one welfare ministry and one ministry of all employment issues. Institutions will be systematically decreased by removing them completely if possible. If they are necessary, private parties will be handed the controls.

The best community in the world

-Equal opportunities
Equal opportunities for men and women of all ages to education, employment and job opportunities. Welfare and safety will be insured to those who can‘t utilise the opportunities.

-Freedom or choice and health care
Private parties will increasingly take over the health care institutions and the pension funds and insurance companies will take over the benefit system. The government will keep on financing the health care system and will guarantee all services to those not insured.

-International community with a free employment market
Foreigners will be welcome and no restrictions to prevent people to working here in Iceland. Employers and employees will be given full freedom to deal directly without involvement of unions.

-Self sustaining of natural resources
Natural resources will increasingly be privately owned and utilised in a sensible way so they can be enjoyed by future generations.


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