What is really happening in Luxembourg?

Rumours aside, the serious issue is what is our sources say is happening inside old Kaupthing Luxembourg now Banque Havilland. There is fear within the bank and strange things have taken place that need to be looked at. Questions have been raised over this all over the financial sector in Iceland and other places. The situation is similar to that of the Harry Potter novels. Voldemort the dark lord has such power over people that he is only called „he who must not be named“ and that is said in whispers.

That might be the mood at Banque Havilland today, and has been so since the Rowland family took over.

Chairman of the Board resigns for no apparent reason

martyn konigFirst is the story of the Chairman of the Board of Banque Havilland called Martyn Konig. He came to Blackfish Capital in 2005 and built up Blackfish Capital with the Rowlands. Here is a short bio of Martyn Konig, that shows him as a heavyweight in the financial world and clearly someone that knows his stuff.

„Martyn Konig, Director Martyn Konig has 27 years experience in investment banking and the commodity markets. Since 2005 Mr. Konig has served as Chief Executive Officer of Blackfish Capital, including managing the Blackfish Capital Resources Fund. He has extensive experience in the natural resource sector, which includes senior management responsibility in resource finance and commodity trading operations at various international investment banks. Mr. Konig was a main Board Director of NM Rothschilds and Sons Ltd. for 15 years and held senior positions at Goldman Sachs and UBS. Mr. Konig is a Barrister and Fellow of the Chartered Institute of Bankers. He is also a Non Executive Director of TSX/ AIM listed European Goldfields Limited.“

After only a few weeks on the job as Chairman of the Board of Banque Havilland Martyn Konig resigned without any explanation. The staff at the bank got a simple email telling them that the Chairman of the Board had resigned. No explanations in the email and they do not have a clue why he tendered his resignation with no notice at all.

According to sources this action is very strange and it is highly unusual for a man in his position to resign, especially without any apparent reason. He was well respected and obviously able to do his job otherwise he would not have been instrumental in Blackfish Capital and then made the Chairman of the Board of a new bank. What really happened in Luxembourg?

What is really going on?

Nothing is for certain at this point, but there are several questions that have been put forth that say quite a lot about what is going on. The first question is about what happened in Luxembourg to force this outcome? Resignation without an explanation from a very controversial bank overtake. The rumour mill in Europe and Luxembourg is rife, and yet nobody seems to know what is going on and why this happened. People who work in the bank are left with no explanation and can only wander about the other questions that come to mind, such as:

Did Konig find something he did not like, some funny business perhaps? This question is very valid since both Kaupthing Lux, and Landsbanki Lux are said to have been neck deep in dirty business, at least very unethical business at times. The nature of the purchase and the nature of the business makes this a very valid question. The whole sale process in fact is believed to have been „strange“ to say the least, at least from the political side of things, and the business side as well.

Rumours have not been silenced, rather have they grown since no comments on anything has been heard from Luxembourg about this matter. Those few who dare talk, like an ex Landsbanki Luxembourg employee that spoke on RUV news a few weeks ago indicated that things are not all right in Luxembourg when it comes to the Icelandic banks there.

Some sources believe that Konig was pushed out by Magnús Guðmundsson who was the Managing director of Kauthing Luxembourg and is still in the same position of the bank he helped drive to the ground. Sources indicate that Magnús Guðmundsson is one of the main people in the new Banque Havilland, and controls much there. What is true in that will come to light in time.voldemort1

This leads to another question about the management structure of the bank. Why was the Icelandic setup kept as it was? Hardly any changes made, so the questions keep popping up, why is it a new bank run just like the old one was? And the old one was as has been said before in some dubious business and has a lot of bad reputation. No changes made except the resignation of the Chairman of the Board after a few weeks.

The obvious answer is that the new owners wanted to keep the old structure in place, because they want to keep on doing what they have been doing for whom they have been doing it for. That brings out the question of the owners of the new bank, do they own it really or are they just using their name as a front for someone else?

Who is the Chairman of the Board now that Konig is gone? It seems to be hard to find out who is running the show after he left, and our sources indicate that it could be Magnús Guðmundsson. Who again might be doing what he was doing for his old boss Hreiðar Már, who just moved to Luxembourg to start his own consultation firm coincidentally. See more on that in this article.

Another view is that Blackfish did a massive mistake and bought the bank not realising how bad things where there. The reality could have been quite different than they expected.

The fear from within

What seems to support the claims that all is not well in the state of Luxembourg is what our sources say, that the staff now working for Havilland are scared to talk or even to ask questions out of fear of loosing their jobs. The former employees are not talking either for the same fear of loosing their redundancy packages.

Sources even say that clients have been gagged or bribed with offers of “preferential terms” to keep them from talking. Here is one explanation what a preferential term is:

A “preferential loan” means a loan, made by an employer to an employee or former employee, the spouse of an employee or former employee in respect of which no interest is payable, or interest is payable at a rate lower than the “specified rate”. It does not however include such a loan where the rate of interest is not less than the rate of interest at which the employer in the course of the employer’s trade makes equivalent loans for similar purposes at arm’s length to persons other than employees or their spouses.

This all what our sources say, but nothing is for sure, and that is a part of the problem. Nobody knows anything and the rumours are left to grow. But one thing is for sure, all is not well in the state of Luxembourg.

Hreidar Már was interviewed on Icelandic television station RUV a few days ago, and he simply made no sense, blamed everyone except himself. Here is a good article from the Economic Disaster Area about Kaupthing and the interview among other things.

What he did in this interview is called sophistry.  The senior management of Kaupthing was apparently aways pretty good at the game of sophistry. They just called it Kaupthinking.

“A sophism is taken as a specious argument used for deceiving someone. It might be crafted to seem logical while actually being wrong, or it might use difficult words and complicated sentences to intimidate the audience into agreeing, or it might appeal to the audience’s prejudices and emotions rather than logic, i.e. raising doubts towards the one asserting, rather than his assertion. The goal of a sophism is often to make the audience believe the writer or speaker to be smarter than he or she actually is, e.g., accusing another of sophistry for using persuasion techniques. An Ad Hominem argument is an example of Sophistry.”


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