Landsbanki. Bad management or personal gain?

The newly restored Landsbanki is full of secrets. For a government bank it should seem incredible that the information flow is blocked by the bank director Ásmundur Stefánsson and the solvency committees of the fallen bank (Old Landsbanki).

There are two main things that have been surfacing recently. First is the massive 30 billion ISK loan to The Icelandic Group AFTER the economic collapse. The Icelandic Group is the golden calf of the Icelandic fishing industry. The company has exported fish for decades and should by all normal business standards make insane amounts of profit.  The company on the other hand has fallen into the hands of the greedy and stupid. The goldmine has turned sour by the owners’ investments that can be considered as “insane”.

What has hurt the company and the fishing industry as a whole even harder, are the complex deals they started doing a few years back, called derivatives, or futures and options deals.

The story of the loan from Landsbanki to The Icelandic Group is asmundurembarrassing to say the least. Various media outlets report that the owners of the company do not seem the have been the real owners according to Ásmundur Stefánsson the Landsbanki director. He defended the loan that was in fact given to the former board members of The Icelandic Group, by saying that the former board members were not owners per se, rather than employees of the bank itself.

The newly founded shelf company, that got a 30 billion ISK loan, is mostly owned by the ex board members of The Icelandic Group to buy all the stocks of the company. Now on the other hand the bank is taking the loans over as shares in the company. This means that the people who got the loan had a whole year to make things better, but they seem to have failed spectacularly.

The bank did not follow up on it’s investment or keep any track of progress according to the Landsbanki director. He also claims that the board members had no personal gain from the deal, and when the bank formally takes over the company the same individuals will keep their positions.

This sounds very fishy to me. The phrase “no personal gain” simply does not register in Icelandic business talk. The term does not exist.

The same people who now are in control of the company ran it to the ground. It is very likely that they also tried to avoid the currency restrictions like most of their counterparts in the fishing industry. See here for details.

The second issue is Landsbanki London office. More on that later….

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