Sigrún Davíðsdóttir's Icelog

Archive for August, 2011

Chinese interest in Iceland (updated)

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The FT dedicates a front-page article today to a Chinese property billionaire, Huang Nubo, who wants to buy the largest single farmland in Iceland, Grimstadir, for a major development of all-year tourist facilities and a hotel. He is also planning to build a bigger hotel in Reykjavik, though he hasn’t yet secured property or land there. The two hotels will be linked by his own air company, another angle to this grande scheme. Nubo has offered 1bnISK (€6m) for the land, saying he plans to invest further 20-30bnISK (€120-180m) in the project.

Nubo’s Icelandic connections go back to his student years, when he had an Icelandic friend. He has lately cultivated his Icelandic connections and taken some Icelandic friends to the North Pole. One of his Icelandic friends is married to the former leader of the Social democrats, former minister of foreign affairs Ingibjorg Solrun Gisladottir. This friend of Nubo is also closely related to the present minister of foreign affairs Ossur Skarphedinsson.

Huang Nubo worked for the Chinese communist party, was an official until he emerged as the owner of Chinese properties in 2003. His company, Zhongkun Group, owns properties in China, resorts and tourist facilities. His company website indicates that most of this is still no further developed than to the computer picture stage.

Lately, his interests have been turned to the US but a planned project in Tennessee hasn’t materialised. Now he seems to have his attention turned to Northen Europe, Iceland first and foremost, inspired by his love of and interest in nature and poetry. One article states he has invested 1m yuan (€108,000) another mentions $1m in ‘China-Iceland Culture Fund,’ a noticeable sum in Icelandic culture life that has so far, as so many of Nubo’s other projects, has failed to reach the tangible state.*

He is also said to be one of the largest shareholders in Royal Business Bank, an American-Chinese bank, investing $1m. Unfortunately, the bank’s website gives no indication of who the shareholders are but this allegedly largest shareholder doesn’t sit on the board of the bank. The bank was set up in 2008 with a capital of $71m.

The leader of the Progressive party, Sigmundur David Gunnlaugsson whose constituency would benefit from the Chinese enterprise, has welcomed the investment, saying it really doesn’t matter if the investor is French, German or Chinese. Svandis Svavarsdottir environment minister says that big plans need to be carefully scrutinised. Prime minister Johanna Sigurdardottir says that investors like Huang Nubo is just what Iceland sorely needs. With strong regulations, that Iceland has, according to Sigurdardottir, there is nothing to afraid of.

This Chinese interest in Iceland is one of several Chinese projects under discussion in Iceland. China plans to build a huge embassy, indicating that its interest must be for something more than just normal diplomatic relationship. A Chinese research institution is exploring the viability of building an unmanned research station, in addition to its station in the Antarctica, to investigate the Northern lights. In addition, there is great interest in China for the sea route through the ice cap around the North pole.

Only foreigners from the EEA can buy land in Iceland, which means that this matter has to go through official channels in Iceland.

Icelandic politicians must now decide whether and to what extent Iceland should welcome Chinese investors. Investors from a country where no one is rich unless deemed worthy by the Chinese Communist Party and its officials. A country that is avidly seeking investments abroad though at the same time foreign investment in China is a tortuous process. That’s the fundamental difference between investors from, say EU countries, and from China. A difference much noted in Africa where Chinese investors have invested vast sums in land, mining and infrastructure.

In case, Icelandic politicians haven’t noticed, the questions asked everywhere in democratic countries is if politicians and business leaders are content with dancing to the Chinese flute or if they think pressure should be exerted on the Chinese to open China to foreign investments, ia. by improving fundamental rights such as human rights and rights of private property.

*This is wrong. The money has materialised, is held by a fund in China, which sponsored a poetry festival in Iceland last year. The next festival, now in autumn, will take place in China.

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Written by Sigrún Davídsdóttir

August 30th, 2011 at 1:38 pm

Posted in Iceland

Thor thundering on

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A feature in the latest Observer, by Simon Bowers and me, tells the story of the yacht Bjorgolfur Thor Bjorgolfsson was planning to have built, inspired by James Bond films, named ‘Project Mars.’ As the pictures on the designer’s website show, the Bond connection is hinted at by a Bond film playing on a screen in the lounge. On one of the walls there is a big picture of an Aston Martini, a witty reference to Bjorgolfsson’s own Aston Martini.

The specifications indicate that the yacht would have space for fifteen passengers, catered for by captain, crew and staff of 34 people. The yacht allows for a truly off-shore life, providing perfect living quarters and work space, as well as leisure and entertainment zones.

Bjorgolfsson has for a number of years had business interests in Finland where he has been co-operating with three Finnish investors – Ahti Vilppula, Ari Salmivuori and Kai Mäkelä –  who all have been in the Finnish media for questionable affairs. Salmivuori was involved in the telecom company Elisa, which Bjorgolfsson invested in. The company became a battle field of a bitter power struggle, making headlines in 2007-2008. Bjorgolfsson was forced to sell his stake in Elisa in October 2008 as his empire was shaken to the core by the collapse of Landsbanki. Salmivuori invested in Amer Sports, one of the world’s largest producer of sports equipment, where Novator also held shares for a while, later bought by Mike Ashley, who also had Icelandic connections, via Kaupthing.

Another long-time partner of Novator is Altima Partners, an investment fund in the UK, set up in 2004 by several bankers from Deutsche Bank, specialised in Eastern Europe. These bankers cooperated with Bjorgolfsson earlier, while at Deutsche and the relationship has continued. Among these contacts are Georg Tzvetanski, Radenko Milakovic and Dominic Redfern – all of them involved in Eastern European privatisation projects after 2000, led by or done with Bjorgolfsson: Bulgartabak (which they didn’t get), Balkanpharma (later merged with Actavis), Bulgaria Telecom and in the Czech Republic, Cesky Telecom and Ceske Radiokomunkace. Bjorgolfsson and Altima have also co-invested in properties, through their Luxembourg fund, Landmark, i.a. in Bulgaria.

Another part of Bjorgolfsson’s Bulgarian interests was the Economic and Investment Bank, EIBank, where he held a controlling stake of 48.6%. In the US cables, from 2006, published on Wikileaks EIBank is mentioned as one of the problem banks in Bulgaria. The three names mentioned are Bjorgolfsson, Tsvetelina Borislavova, who earlier shared bed with the Bulgarian prime minister Boyko Borissov, and Svetoslav Bozhilov. US diplomats expressed, at the times, worries of lending to connected parties and money laundering. Novator sold its share in EIB, now called CIB, in September 2007.

Bjorgolfsson has been investing in Bulgaria since 1999. His 2004 deal regarding Bulgaria Telecom has long been contested in Bulgaria. According to Bulgarian media in March this year, an investigation into the deal might be underway. It’s not the first time that an investigation has been attempted and this time it might well go as earlier, that nothing comes out of it.

Bjorgolfsson has lost his main assets, Landsbanki and Straumur Investment Bank but he is still an active investor with a vast network stretching over several continents. Part of that network is visible in Luxembourg where 16 Novator companies and 8 Actavis companies are still registered. He didn’t manage to realise his project Mars but if business continues to thrive he might well have another stab at another yacht in the future. After all, a yacht is the much desired trophy asset among alpha male investors.

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Written by Sigrún Davídsdóttir

August 29th, 2011 at 5:08 pm

Posted in Iceland

Enter the ‘True Icelanders,’ exit the Icelandic EU membership?

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Earlier this summer, Ossur Skarphedinsson minister of foreign affairs visited Brussels to formally mark the beginning of the Icelandic accession talks. As it is now, Skarphedinsson is more or less the only leading Icelandic politician who speaks convincingly for an Icelandic membership of the European Union. If the political landscape in Iceland evolves with the little political enthusiasm there is and polls showing a falling interest in an EU membership, it seems unavoidable that Iceland will continue to stand shoulder to shoulder with Norway, firmly outside of the EU.

For the last many years, opinion polls have shown hesitating doubt towards membership, with the pro and con side swinging around the 50% line. With the Social democrats, firmly for membership and leading the government it might indicate a strong pro side. That doesn’t seem to be the case. The social democrats are in a difficult position with a coalition partner, the Left Greens, strongly against membership and by the struggle to pull Iceland out of the crisis.

The heavy-weight block in the political arena in Iceland has always been the Independent Party (C). Over the decades, the party has in many ways shaped the Icelandic foreign policy, when there has been any. After being back and forth on Europe, in the later years mostly indicating a mildly pro-EU stance, the party leadership has now firmly placed itself on the other side. It took great political courage to lead Iceland into NATO in 1949, something that seems lacking in the party now.

The first indication of a strong pull towards the ‘no’ side followed the results of the Icesave referendum in March. The IP leadership stood behind the ‘yes’ side, having participated in the negotiations and come to the conclusion that the new agreement was positive for Iceland. Party leader Bjarni Benediktsson tread lightly, didn’t state his case forcefully but did talk for the agreement.

The old IP leadership, led by David Oddsson, now editor of Morgunbladid, was vehemently against Icesave and Morgunbladid couldn’t find strong enough words to ridicule and belittle Benediktsson. Though unclear how powerful the Oddsson wing of the conservatives is, the ‘no’ victory seemed to strengthen it. There were rumours that Oddsson would try to use the ‘victory’ to oust Benediktsson though there was no obvious candidate to replace him. And a persistent rumour flew around that Oddsson himself might want to step in as a leader. This second coming, if ever a possibility, never materialised.

In an interview earlier this summer Benediktsson indicated that he was now doubtful as to the merits of an Icelandic EU membership. He has since spoken in unequivocal terms. He is against membership and in addition, he thinks Iceland should walk away from the membership talks and withdraw its application for membership. This would no doubt be an ideal solution for a party so long split by its position on EU.

The feeling is that Benediktsson’s change of mind isn’t entirely convincing. In 2008, Benediktsson came out as a strong supporter of Icelandic EU membership since it would add a much needed strength and stability to the depreciating Icelandic krona. Compared to his reasoning then, his EU stance now is seen as bowing to the Oddson wing, in order to secure his own position as a leader for the coming party conference in autumn. As one source said to me, Benediktsson and the men closest to him are all of one mind: Iceland should join the EU.

Though there seems to be a majority among Icelandic conservatives against EU membership there is a strong and vocal part of party members, among professionals, civil servants and other middle class voters for membership. Next election will be no later than spring 2013. At the time, EU membership could well be a hotly debated issue and could possibly drive some pro EU conservatives away, though they might have a hard time voting for the social democrats, already now weary from being in government since May 2007. But perhaps a referendum will already be over at that time.

With the IP turning its back on the EU it might again be inclined to turn to its old coalition partner, the Progressive Party, traditionally a centre party in the Scandinavian sense, born among farmers who now are few and far between. Under their new leader Sigmundur David Gunnlaugsson the progressives have progressively reinvented themselves as a more nationalistic party, finding idols in new parties like the ‘True Finns’ who now more modestly call themselves ‘The Finns.’

It remains to be seen if the progressives will try to taka monopoly on nationalistic tendencies and turn them into political ideas, since these tendencies are to be found in all parties, as indeed among the whole Icelandic population. If these two parties will form a government it will most likely have its back staunchly to the EU, dreaming of a rapprochement with Canada and the BRIC, dividing and conquering through bilateral agreements. This works for Russia but might be difficult for Iceland.

There are plenty of Icelandic politicians who speak vehemently against Icelandic EU membership. Those familiar with the ‘no’ wings in Norway, Sweden and Denmark, at the time of their referenda, will recognise the tone and the arguments. This rhetoric was tried and tested up to the Icesave referendum with national pride in all hues against reason. Politicians who speak with passion for Icelandic membership do not seem to exist for the time being. There will be associations and organisations to speak for membership but the question is if there will be any convincing and passionate politicians among them.

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Written by Sigrún Davídsdóttir

August 26th, 2011 at 1:12 pm

Posted in Iceland

Historical parallels in the Thor’s saga

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Iceland is a country where people have a strong sense of what family they belong to and most people know their family history quite well. Now that the story of Thor Jensen and his offspring Bjorgolfur Thor Bjorgolfsson is about to premiere as a film, it comes to mind that Jensen’s story is no less controversial than the one of his great-grandchild. There were people who thought that Jensen was a ruthless businessman who left losses to others while he himself walked away unscathed.

In 1907 Thor Jensen founded a company with another entrepreneur, Petur J Thorsteinsson. Thorsteinsson was at the time probably the richest Icelanders. He made his money up in Bildudalur in West Iceland running a shipping company and fishing and fish-processing company. When his businesses were at their biggest around 400 people worked for him. Quite something at a time since the population of Iceland was, in 1900, 78.000.

Thorsteinsson was an illustrious name and the new company he founded with Thor Jensen was called PJ Thorsteinsson & Co. Thorsteinsson had a long relationship with the Danish banks at the time and had been several decades in business. The aim of the new company was to get a share capital of ISK1m, at the time the size of the Icelandic state budget. They never quite reached that goal but the company was nicknamed ‘The Million Company.’ It built up a harbour at Videy, the tiny island off Reykjavik, and a vast empire related to fish-processing, even with a train running on the island to transport coal, salt and other goods.

Jensen and Thorsteinsson could combine their plans and ambitions in one company but it turned out that they could not work together. Thorsteinsson left the company though it still bore his name but he left his capital in it. Jensen now ran the company but four years after Thorsteinsson left, it went bankrupt. Thorsteinsson lost most of his once so vast wealth. Jensen was more fortunate, with his wealth if not intact then at least not badly dented. At the time, there was an investigation into the affair, where Jensen famously couldn’t remember a thing about the whole debacle.

Many years later, after Thorsteinsson had died, Jensen wrote his autobiography. He had now regained his memory and squarely blamed everyone except himself for the bankruptcy. Mostly he blamed Thorsteinsson even though the bankruptcy happened years after Thorsteinsson left the company. This was before the era of offshoring and it was pretty clear who had lost and who hadn’t.

Stories run in families in Iceland but the families of Jensen and Thorsteinsson became related through marriages. It’s been a quiet consent in both families not to discuss the demise of ‘The Million Company’ at family gatherings. The story was later told in a book, published in 1990, about the ‘Bildudalur King’ by Asgeir Jakobsson. The minor shareholders of Landsbanki and others who lost money on Landsbanki, such as pension funds, might be amused, or not amused, by the strong parallels of Jensen and his great-grandchild who from the beginning of his business entreprises was strongly drawn to the story of his forefather.

This is a family with spectacular success and no less spectacular bankruptcies, as is born out by ‘The Million Company,’ by Bjorgolfsson’s father who ran the shipping company Hafskip aground in the 80s and then father and son being the main shareholders of the now collapsed Landsbanki and Straumur, not to mention bankruptcies related to them such as the travel company XL and Eimskip.

The Thorsteinsson’s family might not be too amused by the story in the new film on Thor’ saga, if this film recycles only the Jensen saga from his autobiography. Historically aware viewers will wonder if the film is yet another example of plus ça change.*

*This log was inspired by a conversation with a descendant of Thorsteinsson who wanted to make me aware of the fact that there is another side to the Jensen’s own story of his success. Icelanders have long a long memory when it comes to families.

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Written by Sigrún Davídsdóttir

August 19th, 2011 at 1:34 pm

Posted in Iceland

Banking, the Icelandic way: yet another bankruptcy of ISKbillions

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Sigurdur Bollason isn’t one of the most famous Icelandic businessmen and yet two of his now bankrupt holding companies have collapsed under ISK11bn (€66.8m) debt. To illustrate the size of ISK11bn, the cost of running the Icelandic Parliament is ISK2,9bn a year so this money would go a long way to run the Parliament for three years. Bollason’s story is illuminating, in order to understand banking and business, the Icelandic way, as practiced before the collapse of the Icelandic banking system in October 2008. Since end of 2010, Bollason’s registered address is Luxembourg but he is mostly seen in the UK.

Bollason’s parents ran a successful fashion shop in Reykjavik and that’s the way Bollason went. Around 2000 he met Kevin Stanford, through his fashion enterprise. As I have written on earlier, it was, allegedly, Bollason who introduced Stanford to Icelandic businessmen like Baugur’s owner Jon Asgeir Johannesson and to bankers at Landsbanki and Kaupthing. Stanford eventually became as valued a customer as some of the Icelanders, meaning that Kaupthing lent him money to buy shares and, towards the end, money to gamble with in the bank’s attempt to influence its sky-rocketing CDS, nota bene in co-operation with Deutsche Bank, but that’s another story for another log.

After the privatisation of the Icelandic banking system in 2003, the development was towards the three banks, each with a few major shareholders. At Kaupthing and Landsbanki these major shareholders stayed the same until the bitter end. At Islandsbanki, later called Glitnir, they changed: in summer 2005 the largest shareholders were a group connected to Samson, with Bjorgolfur Gudmundsson and his son Bjorgolfur Thor Bjorgolfsson, at the core. At the beginning of 2006 they sold their Islandsbanki shares to Karl Wernersson and Einar Sveinsson who in early 2007 sold to Johannesson and related parties.

Below these major bank investors/owners there was the second tier, smaller investors who got loans from the banks to aid and support the major players in their investments. Without naming names, the feeling is that these fellow travellers were useful in securing control without having to own all that much in the company. The banks were usually fellow travellers as well, both co-investing and lending.

Bollason belonged to this second tier and invested mainly in the Baugur orbit. He took out a loan both in Landsbanki and Glitnir in 2008 in share buying schemes in respective banks. Though owned by father and son, Landsbanki lent heavily to the Baugur sphere, as well as to father and son companies. Straumur, where the son was the chairman of the board lent almost exclusively to companies related to its chairman.

The two now bankrupt Bollason companies owe ISK6bn to Glitnir, as Glitnir gave Bollason a loan of ISK4bn to buy shares in the bank. Glitnir both sold the shares to Bollason and gave him the loan. The other company leaves a debt of ISK5bn, from an ISK3.5bn loan to buy 1,4% of Landsbanki in two instalments, in July and August 2008. The recovery from these companies is nill, meaning considerable losses to these two banks. After house searches early this year it’s clear that the Office of the Special Prosecutor is investigating the Landsbanki loan to Bollason.

The question is: was it ever a good banking practice for Landsbanki and Glitnir to lend Bollason this amount of money to buy shares in respective banks? The short answer is ‘no.’ There is nothing to indicate that he had the financial means to borrow by the billions. – It’s an unavoidable thought that loans like these would be a good ground for shareholders to sue the bank’s managers and board. These loans could indicate a colossal breach of fiduciary duty.

The next question is: why did both Landsbanki and Glitnir then think it was good business to give him these loans at no risk to Bollason and a huge risk to respective banks? Here, we need to keep in mind that the loans to Bollason were just one of many to people in the sphere of the major shareholders.

Taken as a phenomenon – a bank lends money to buy its shares when markets are falling and no one is buying its shares – it seems clear, that this was organised share parking on behalf of the banks, possibly indicating an organised market manipulation. This wasn’t just a question of single loans. This was part of banking the Icelandic way and all the banks were practicing it, as is amply demonstrated in the SIC report The vehicles set up to hold the shares have been going bankrupt one by one since the collapse of the banks.

All these banks operated abroad, with London being the harbour of their foreign operations. Two of these banks, Kaupthing and Landsbanki, took deposits from UK private and institutional investors. The private deposits were guaranteed, the institutional investors lose their deposits. The UK Serious Fraud Office is investigating Kaupthing, albeit in an apparently curiously narrow way, focusing on loans to the Tchenguiz brothers. Since Kaupthing and Landsbanki operated, in many ways, in a similar way it’s incomprehensible why Landsbanki and its major shareholders aren’t being investigated as well.

The Financial Services Authority has just fined a hedge fund chief executive a record £2m. Michiel Weiger “Visser deliberately misled investors by various means, including by engaging in market manipulation, to disguise the performance of the Fund and to secure continued and increased investment in the Fund.” This rhymes with what the SIC indicates regarding the Icelandic banks. Independent auditors’ reports, done by Jean-Michel Matt and Helge Berg, on Glitnir and Landsbank respectively point in this direction. Are hedge funds just a manageable size for the FSA or is there some higher reason?

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Written by Sigrún Davídsdóttir

August 17th, 2011 at 11:22 am

Posted in Iceland

Thor’s Saga – without the critical questions and SIC information?

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Bjorgolfur Gudmundsson had quite a story to his name, before buying the lion’s share of Landsbanki, as the Icelandic state sold its share in the bank in 2002. He had created and sunk a shipping company, Hafskip, in the 80s. An affair that got him imprisoned, in front of his young son Bjorgolfur Thor, and landed him in jail for fraud. No doubt, a traumatic experience for both of them.

Just as in the Icelandic sagas, reputation is a leit-motiv in the lives of father and son. Their version of the Hafskip saga was how the almighty in the Icelandic business community in the 80s took a revenge on the challenging intruder, even though Gudmundsson’s wife does indeed stem from one of the historically so powerful Icelandic families. Others beg to differ, saying the investigation and the Hafskip ruling was unequivocal: there was serious fraud committed within Hafskip.

With money and respect stemming from the Landsbanki ownership, as well as controlling the now failed investment bank Straumur, father and son hired people to write their version of the Hafskip saga. Unfortunately, their book was published in autumn of 2008, not quite the right timing for contemplating the past as their Icelandic power house, Landsbanki, collapsed. Moreover, the Icelandic bank crash, yet again, left not only Gudmundsson’s reputation in tatters – he went bankrupt just a few months later – but also the reputation of his son.

An important point of reference for Bjorgolfsson has always been his Danish great-grandfather, the businessman Thor Jensen (1863-1947). Jensen moved to Iceland as a youngster, rose to fame and riches and had twelve children, one of whom became a prime minister. In a society where power runs in families, the off-springs of Thor Jensen have been at the core of power, closely connected to the Independance Party (C). Bjorgolfsson’s wish to associate himself with his illustrious forefather even went so far as to buy Jensen’s ‘mansion,’ on an Icelandic scale, that Jensen built by the little pond in the centre of Reykjavik.

Bjorgolfsson bought the house in a much disputed sale from the Reykjavik city council, in the summer of 2008. It is still thought to be owned by a Novator company, owned by Bjorgolfsson but it’s been empty since he bought it. Not quite, yet, the mood in Iceland to see Bjorgolfsson take up residence there in style and glamour. His house in Notting Hill in London and his country house in England are well out of Icelandic view.

In 2007, a Danish documentary film-maker, Ulla Boje Rasmussen, apparently got the idea to make a film about Thor Jensen. This film, Thor’s Saga, then expanded to encompass his great-great-grandchild, Bjorgolfsson, and will soon be premiered in Denmark. The film is funded by the Danish and the Icelandic Film Institute, in collaboration with TV2 Denmark and the Icelandic Ruv. Bjorgolfsson has, allegedly, had no part in the project.

On Sept. 7, the film will be launched in Copenhagen with a panel debate where Bjorgolfsson will participate. This will be of great interest to those who followed the demise of the two banks where father and son were in control of, Landsbanki and Straumur, with the father as the chairman of the former and his son the chairman of the latter. Bjorgolfsson has not be much seen or heard in Iceland though he did appear in the documentary Maybe I should have, where he storms out when asked how he feels about Icelanders seeing him as a criminal. The debate is organised by the Nordic Council, at the request of Boje Rasmussen, with the Borsen Executive Club. It’s Scandinavia’s largest PR company that organises the film’s PR, Geelmuyeden and Kiese, quite an honour for a documentary film.

The idea is to get an Icelandic politician to participate. The organisers hope to get minister of economy Arni Pall Arnason on the panel but his participation has not been confirmed. Another distinguished participant is Danske Bank’s chief analyst Lars Christensen,who in March 2006 wrote the famous, or infamous from the point of view on Iceland at the time, report on the Icelandic banks. The debate is convened by Anders Krab Johansen, Borsen’s editor.

As readers of Icelog know, the Icelandic Parliament published a 2600 pages report last year, written by an investigative commission. Its conclusion on father and son was damming, as can be seen in the executive summary. Ia, the report pointed out how the two got loans out of Landsbanki and Straumur, way beyond any rhyme and reason and how the connection between the two banks indicates bad governance as demonstrated by loans between the two banks with no collaterals. Bjorgolfsson has recently actively been refuting the report’s conclusions on his Icelandic website. In a statement to the SIC, former minister of finance Arni Matthiesen claimed that Bjorgolfsson had lied to him and others at emergency meeting in October 2008.

Bjorgolfsson’s activities in St Petersburg and later in Bulgaria have raised questions. There was colourful article in the Guardian on his Russian enterprises, Die Welt used unnamed sources to connect Bjorgolfsson with the Russian mafia and Euromoney published a thorough article on the new owners of Landsbanki in 2002, doubting how fit and proper they were to run a bank.

Bjorgolfsson has had some ties to Denmark. He invested in the property group Sjælso Gruppen in 2006, together with his father and Straumur (then called Straumur Burdaras), and in Property Group through Straumur. Already in 2009, I was informed that Bjorgolfsson had sold his shares in Sjælso. As with other Novator entities, the ownership structure was complicated, further complicated by name changes.

A theme to be discussed at upcoming debate in Copenhagen is what can be learnt from the crisis in Iceland and how to secure the finance sector against similar calamities in the future. One of the findings of the SIC report is how Samson, the holding company owned by father and son and a third investor, their St Petersburg partner Magnus Thorsteinsson, were in breach of the Landsbanki sale contract re the financing of the purchase as well as breaching a ban on Samson to engage in other activities than holding the Landsbanki shares.

With this in mind, and on the whole the damning conclusions in the report re Landsbanki and Straumur governance and the questionable lending to by these banks to father and son, the short answer to this questions is to make sure that major shareholders of financial institutions stick to their contracts and to good and transparent governance. – Bjorgolfsson no doubt takes a different view on the SIC findings and any conclusions drawn from the report.

After the failed attempt to rewrite the Hafskip story it will be interesting to see if Thor’s Saga is an attempt to rewrite the recent history of Bjorgolfsson and Gudmundsson – and how successful the film will be.

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Written by Sigrún Davídsdóttir

August 15th, 2011 at 4:49 pm

Posted in Iceland