Sigrún Davíðsdóttir's Icelog

The Cayman-Banque Havilland/Rowland connection

with 8 comments

At the beginning of the year, Cayman islanders were dismayed to discover that their PM, McKeeva Bush, returned from a holiday with family and friends on a private jet. The premier felt it was of no one’s business on whose private Gulfstream jet he travelled but the Cayman media found out that a certain Luxembourg company, Pillar Securitisation sarl, owns the jet.

Icelog readers will know that Pillar Securitisation is the ‘bad bank’ of the collapsed Kaupthing Luxembourg. Its administrator is Banque Havilland that took over the Kaupthing operation in Luxembourg. The jet was built in 2000, first registered in the USA as N602PL, then in the Cayman Island as VP-CLA belonging to International Jet Club that rents out and runs private jets. Now it’s registered in the Isle of Man as M-ABCT.

There are two things of interest here: the close connection between Havilland and the Cayman Island, a notorious tax haven and secrecy jurisdiction and then implicitly between Havilland’s owners, the Rowland family, and the Cayman PM – and the fact that Pillar owns and runs a jet.

Private jets are often chartered out but in this case the Gulfstream registration excludes that possibility since it doesn’t allow it to be chartered. Consequently, the PM seems to have been travelling on the Gulfstream by invitation only. And he, or someone he knows, must be pretty close to Pillar and its owners.

It’s also intriguing that Pillar owns a jet. I would have thought that an administrator is bound by the interests of the creditors to maximise the value of the assets instead of spending money on jetting dignitaries around the world. But perhaps Pillar is set up in some special way so as to make a jet ownership acceptable. I sent a query earlier this week to Havilland for an explanation but got no answer.

Last year, Havilland’s owner David Rowland was set to become the treasurer of the UK Conservative party. Daily Mail got all itchy over this and dug out a lot of intriguing and compromising stories about Rowland who then suddenly realised that he was far too busy and really didn’t have the time for this unpaid but influential post. He has been one of the biggest donors to the Conservative party over the last years.

It will be interesting to see if the Conservatives, now in government, will do any more than Labour in throwing light on the murky offshore world, which to a great degree belongs to the remnants of the British Empire. The interesting ties between Pillar and the Cayman rulers yet again raises the question if there is a connection between the political inertia regarding the offshore havens and political donations from those who thrive on offshore businesses.

*I have earlier blogged on Havilland and the Rowlands: Havilland dismisses its CEO Gudmundsson; Havilland and the Kaupthing investigation; on Rowland and other Tory connection; what the Daily Mail had to say about Rowland and more on Rowland; the Icelandic investment bank Straumur has sued Jonathan Rowland regarding share buying; Havilland tries to hinder that the OSP get information from Luxembourg.

Follow me on Twitter for running updates.

Written by Sigrún Davídsdóttir

January 14th, 2011 at 6:23 pm

Posted in Iceland

8 Responses to 'The Cayman-Banque Havilland/Rowland connection'

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  1. A most interesting post especially, if like me, you were blissfully ignorant of these matters.

    rod

    14 Jan 11 at 8:03 pm

  2. One has to wonder what the auditors are actually paid to do, after all they are also paid to clear up the errors afterwards as well. This would lead on to the question “who guards the guards” especially in relation to the Big Four ie E&Y, PwC, KPMG, Deloitte

    Tricky

    17 Jan 11 at 11:42 am

  3. Sigrún, I have been reading through your Icelog, for interest in the meltdown of Icelandic fiscal intelligence in the wake of Iceland being blind-sided by Britain and Holland in your 2007-2008 banking war, and am finding it a little baffling. You seem to be stuck in a mind-set you have adopted that Icelandic international banking was being conducted by criminals who were doing everything wrong, including fighting to hold its own against its opponents, who you seem to think were doing, and apparently could do no wrong.

    For this you appear to believe the Icelandic banks had no assets. You apparently believe that all they had the bankers shifted “offshore” to steal.

    You need to pry your mind open and do some basic research. The assets you believe stolen are to be found in such places as the British government’s holding and Pillar Securitisation. In all locations basic, not in depth, research indicates they are healthy and still earning money. That is, in banking terms, the loan base is solid, not riddled to rickety by defaultings, with repayments continuing.

    You write: “Icelog readers will know that Pillar Securitisation is the ‘bad bank’ of the collapsed Kaupthing Luxembourg. Its administrator is Banque Havilland that took over the Kaupthing operation in Luxembourg.”
    If you look at http://www.banquehavilland.com/important_notice.php you will see written re Pillar, “Following the Bank’s division, a separate legal entity has been created under the name of Pillar Securitisation S.à r.l.” and, “The assets allocated to Pillar Securitisation S.à r.l. include all the loans made by the former Bank in the context of its private banking operations as well as the corporate loans together with all interest accrued thereon and together with all rights and obligations under the relevant loan documentation and any other rights attached thereto.”

    P.S. is not a “bad bank”, or a bank at all, it is what is called a Special Purpose Vehicle, a separate entity created to hold securitzed assets. B.H. certainly administers the assets, but not as a ‘bankruptcy administrator’, as you appear to believe. With the profits from its assets a SPV may do what it may responsibly wish to do, including buying additional assets, own additional assets, lease its assets and so forth.

    Business jets are frequently leased, and the leasor, who may be a subsidiary, frequently rents or time-shares (neither is chartering).

    The contents of P.S. are more ex-Icelandic owned assets that are providing income to new owners after Iceland stupidly gave them all away instead of supporting its international banking system and fighting for them. Everywhere you look, if you open your eyes, you will see ex-Icelandic bank assets still viable and still producing profits — but not for Iceland, while you in Iceland try to make cases against the ex=bankers for “stealing” what is still there, but in the hands of those you gave it all away to.

    The people who bought the assets Iceland sold, or let be sold, for nothing do not owe anything to those Iceland, having taken ownership responsibility, sold the assets away from. Iceland owes the previous owners. Consider: If I owned a dog and placed the dog with a security service for it to rent as a watchdog, and that service sold the dog to you for a tenth of its value, the buyer you sold to would not owe me the nine tenths, you, the seller I entrusted the dog to, would owe me the full ten-tenths value. You are Iceland, I am a Kaupþing depositor, you, with your partner Britain, sold my investment (actually, Britain and Holland leaned on you and talked you into it[and are now pushing you into taking all responsibility for the payback, plus interest]). If you (again, not yourself alone) shift your journalism from tabloid to investigative mode you might become able to recognize this. If you don’t you (all of you in Iceland) are going to lose everything, for giving away to vultures, selling to the crooks (who are not your bankers) and owing your soul to the ‘company-store’ (Holland, Britain and the IMF).

    R.L.Dogh

    23 Jan 11 at 12:06 am

  4. Sorry, I crossed up my dog-selling example, switching you and the renting service you, in the example, sold my dog to. You should still be able to figure the example out, if you want to: ‘Vulture capitalist’ buyers get what they buy for what they pay the seller. If the seller still owed, but sold for less than she owed, she still owes, the buyer who bought from her does not.

    R.L.Dogh

    23 Jan 11 at 12:20 am

  5. Some points, Dogh:
    1 It’s not my idea that the Icelandic banks were involved in something that might turn out to be a criminal activity. There is the Office of the Special Prosecutor in Iceland investigating alleged violation of law. Plenty of possible activity that might be against the law was pointed out in the report of the Althingi Special Investigative Commission. – My own investigations have shown irregularities, no one has yet been charged but the OSP is at work.
    2 The reports of the resolution committees of the fallen banks indicate the value of the assets that the three fallen banks held. Of course they bought some worthwhile assets – and they are being sold to pay the banks’ creditors.
    3 Kaupthing Luxembourg did indeed go into moratorium, it couldn’t function when the mother bank had failed. Havilland is to all means and purposes the administrator of that bank. Yes, there is a SPV around it but the assets are being sold off to pay the creditors. Havilland took over a lot of Kaupthing’s viable business, i.a. some Icelandic customers and their loans.
    4 Those who buy assets from the res coms of course do not owe Iceland anything. The fallen banks were private companies and are being dealt with as such.
    5 IMF stepped in when no other lenders were to be found, just like now in Ireland. The debt to the UK and the Netherlands arose from deposits taken by Landsbanki. The state guarantee is disputed but the Icelandic government, the present one and the last one, has from the beginning said it would pay the minimum guarantee.
    6 Offshore havens are used by all banks, that’s nothing particularly Icelandic. What many Icelanders are interested in is how they were used.

  6. Sigrún, Thanks for taking time to respond to my comment. I am not involved in anything related to Iceland or its banking business, so I am not really concerned with any of it. I have been looking into it more for being intrigued than anything else.

    Among intriguing aspects is that Iceland appears to have very different from international laws in regard to banking and bank regulation. I know no more of Icelandic law than the Glitnir Board knows of United States law, and, unlike them know better than to pretend to (I am especially intrigued that those of that board wrote their own complaint against what you, and they, called “a cabal of white-collar criminals” [doing this in a document submitted to a U.S. court is illegal] and did not obtain legal advice and have their complaint rewritten by a U.S. attorney [for not doing this they filed a case doomed by its filing]). I don’t pretend to have any idea what criteria Iceland’s Special Prosecutor may be looking for ‘criminal activity’ per. Also, I don’t know what is ‘regular’ in Iceland, so I don’t know what qualifies as ‘irregularities’ there. As I understand, however, there are two separate sets of banks, Icelandic, which Iceland nationalized the assets of, and foreign, or ‘off-shore’, which Britain and Holland collapsed, and which, I am informed, were not insolvent when collapsed.

    I also don’t know how Iceland ‘investigates’. I read the English parts of the Alþing’s “special investigating committee” report, which seemed to be focused to drawing conclusions and casting blame instead of investigating, to the point the investigators appeared to have overlooked that they documented Britain’s regulators pushing a choice between two unviable options on Landsbanki-Britain, either or which, taken up, would have taken it to collapse. I am baffled that Iceland threw up its hands, instead of filing a lawsuit in Euro-court. All of what Iceland has been doing since its banks were attacked, to me, looks completely doofy, and worse, fiscally suicidal.

    Kaupþing-offshore (from Iceland) was viable when it was put in moratorium for being a terrorist-state asset. Kaupþing Luxembourg was sold away as an entity. It was just dumped. Blackstone Capital bought, changed the name and carried on without changing the business. That doesn’t suggest anything to you? Like that it was not a failiing business?

    The “creditors” Banque Haviland owes to are the banque’s investors, including ones whose shares converted from Kaupþing shares in the sale. BH has no obligation to sell the contents of the Kaupþing portfolio it bought. It was Britain who put Kaupþing Britain into receivership. The Luxembourg branch sale was a private sale, no state dictating Only Iceland was involved, and it was liquidating, selling right-now, damn the value. The SPV simply carries the securitized Kaupþing era portfolio assets, to isolate them, to insulate them and for bookkeeping. As long as the investors do not want to liquidate their investments they remain and accrue value for those investors, Icelandic and other. For Icelandic investors screwed by Iceland’s panicky actions BH investments are “offshore havens”.

    Iceland’s IMF borrowing is not like Ireland’s, because Ireland was a debtor. It over-borrowed. Iceland’s bankers and investors had assets. Iceland took them from them and threw them away, instead of fighting to keep them.

    And the “debt to the UK and the Netherlands” did not arise from deposits taken by Landsbanki, the debt, to depositors in those countries arose from those countries administratively closing Landsbanki in those countries, orphaning the depositors (who, current records of Landsbanki asset appreciation show, would not have needed to recover from deposit insurance if Britain’s FSA had not regulatorily destroyed Landsbanki Britain, dominoing Landsbanki Netherland and elsewhere.

    The way it appears to me is that Iceland, first, let the fox and the wolf attack its geese that were laying it golden eggs, then, at those predators’ behest, killed the ones they had not. And then went after the goose-keepers who it blames for having brought the golden-egg laying geese and having fed and nurtured them. “It’s their fault we are without the eggs since we killed their geese!” you all are saying, “Let us tar and feather them!”(sorry, if this is an American custom you don’t indulge in) So you sink yourselves deeper into debt and sell yourselves into third-world poverty and vent your anger blaming them.

    As I say, to me it is baffling.

    R.L.Dogh

    25 Jan 11 at 3:50 am

  7. Its worth taking a very close look at the way the Banks of Heritable /Landsbanki “Reciever Administrators in London and Luxemborge have dealt with these various Creditor and morgagors since Oct 2008- if we follow the progress made from the French Courts of Tribunal in Paris – the difficulty in getting to the top of this muck heap – is the average investor or client any of this so termed Icelandic banks has no chance of Justice – well at least to date in the London or Glasgow courts

    Chris Farley UK

    1 Oct 13 at 1:11 pm

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