Sigrún Davíðsdóttir's Icelog

OSP charges Jon Asgeir Johannesson, Larus Welding and two Glitnir employees

with 10 comments

The Office of the Special Prosecutor in Iceland has charged Jon Asgeir Johannesson former CEO of Baugur and a major UK retail investor for his role in a Glitnir loan of ISK6bn (now £40m) in summer 2008. Johannesson is charged for exerting undue influence on Glitnir CEO Larus Welding and Bjarni Johannesson who was in charge of connection to Johannesson’s companies. A third Glitnir employee, Magnus Arnar Arngrimsson is also being charged. The charges related to the three Glitnir employee regard breach of fiduciary duty.

This case, called the Aurum case because the collaterals for the loan were shares in Aurum, formerly Goldsmith, the UK jewelry chain. This was essentially a series of transactions, which in the end brought ISK1bn in cash onto Johannesson’s account with Glitnir and the same amount to his business partner Palmi Haraldsson, who is not charged. According to the charges, the purpose of the loan was to find a way to settle Johannesson’s overdraft with Glitnir, in addition to cash and to enable Haraldsson to get money as well. The OSP is asking for the maximum sentence, a six year prison. Johannesson denies all wrong-doing. In the charges it is stated that both Johannesson and Welding live in the UK.

The tendency here, according to the OSP, is the same as in so many other questionable loans to the major shareholders: the loans were very favorable to the borrower and equally unfavorable to the lender.

The Aurum case has long been known to the Icelandic public, ia from the SIC report and from loan agreements, which had landed in the public domain. Earlier Icelogs on this case can be found here. A link to the charges, in Icelandic, is here. Oral hearing is scheduled to start January 7.

In addition to this case, the OSP has brought charges against Kaupthing managers in the so-called al Thani case. So far, Landsbanki managers or major shareholders of Landsbanki have not been charged.

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Written by Sigrún Davídsdóttir

December 16th, 2012 at 10:24 pm

Posted in Iceland

10 Responses to 'OSP charges Jon Asgeir Johannesson, Larus Welding and two Glitnir employees'

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  1. Iceland is to be heartily applauded for setting the rest of the world an example.
    It is about time a nation had the b***s to act and condemn, rather than whitewash over whitewash and cover-ups to protect the corruption and abuse in the Banks.

    We must ask ourselves why certain things are kept out of mainstream international press and why Iceland stands out as a unique proud nation who has the courage to tackle those who think they are above all laws.

    Is Iceland not the only one who has brought to justice those who thought they owned the Justice systems, the Governments and the general consumers ?

    Why is Iceland’s courage and determination to see Justice is done to corrupt bankers and their colluding helping hands in order to protect people in the future by punishing the guilty not all over our press?

    Why is corrupt Britain not talking of the courage of Iceland in their press?

    Why does the International press stay so quiet?
    Could it be out of shame?
    Could it be because little Iceland is showing the world how things should be done to see Justice is done and examples are made?

    All I can say, is BRAVO. ICELAND…..MAY YOU SUCCEED!

    George Ward

    18 Dec 12 at 8:46 am

  2. Congratulations Sigrun on another excellent piece of journalism. I totally agree with the post by George. The Icelandic Government should be be congratulated for their commitment to get these matters resolved and if their was a “NOBEL” prize for bravery I would vote for Iceland. Of course we should not forget Sigrun’s icelog, her true professionalism has been an inspiration to us all and has given us hope, when we had none. Let us hope that this will finally bring the victims of the Landsbanki equity release fraud in France some relief. I would imagine that the Landsbanki Directors & Managers will be getting the call very soon. May I wish Sigrun, her family and all victims of fraudulent equity release products a very Happy Christmas and New Year.

    Peter James

    18 Dec 12 at 9:40 am

  3. Let us hope that next year Landsbanki will be in the same position as Kaupthing and Glitnir and that the excellent work of the Office of Special Prosecutor in Iceland continues.

    I also feel that Iceland has not been applauded loudly enough by other less courageous countries with polluted bankers and that it is time something were done about Luxembourg and the frauds and scams it allows.

    Perhaps next year we will see more bankers and their pals behind bars so that the world can get back on its feet again and decent people can be protected from abuse!

    I too join Peter James in wishing all of you and Sigrun a very Happy healthy Christmas and New year.

    Iceland must be proud and we all wish Icelanders well too as we applaud their courage and determination to fix what went wrong!

    Rachael Williams

    18 Dec 12 at 1:52 pm


    This is another example of what has been going on through Luxembourg and being covered up by Luxembourg , a small country which contrary to Iceland, is doing nothing whatsoever about the fraud, mis selling, manipulation , money laundering and gross abuse , accusations that are being heard in various Criminal Courts against the Banks and their abusive winding up procedures.

    Iceland is clearly doing the right thing whilst others look on and think they can get away with it!

    Well done Antonio Flores!

    Rachael Williams

    19 Dec 12 at 3:14 pm

  5. George Ward, Rachel Williams and others caught up in the Landsbanki EIO (Equity Investment Offer debacle: You should be careful to not say any mean things about the Landsbanki bankers. You may find yourselves embarrassed should it come to pass that you need their testimonies in your Luxembourg lawsuits. They are the ones who know the nature of the Landsbanki EIO dealings, and that they were Landsbanki offered investment opportunities, not “loans” or “equity releases”. EIO equities are not released to the equity owner, and the equity owner does not have any freedom of choice to use his or her equity value as he or she wants to. or to opt where to invest it. Thus, thee is no “release” and no “loan”, as far as the equity owner is concerned, in EIO schemes. The Landsbanki bankers, who are not your adversaries, are who can attest this.

    Who are your adversaries? The Landsbanki Winding-Up Board, Iceland’s financial sector’s TIF, those in Iceland’s government who support the EU’s and Britain’s and Holland’s financial sectors’ demands for Iceland’s taxpayers to indemnify the TIF, and, of course, working behind the scenes, Britain’s and Holland’s financial sectors, and the IMF. The only ones of these you have direct interaction with are the Landsbanki Winding-Up Board and those in Iceland’s financial and government sectors who are creditors to Landsbanki in receivership. Landsbanki EIO participants are, legitimately, also creditors. Yvette Hamilius is only a lawyer. She was appointed by the court to represent landsbanki creditors, to avoid each creditor being represented by a separate lawyer, all jockying for precedence in pay-out and creating a madhouse. Avocat Hamilius is supposed to be representing EIO investors in Landsbanki, too, but she has been suborned by the Landsbanki Winding-Up Board and other influential creditors to treat EIO creditors as debtors, to allow the LW-UB and TIF to steal their investments in Landsbanki that are owed them by Landsbanki. Under the old law EIO creditors are primary creditors (must be paid first), because they are ‘retail’ investors; they are not professional investors (this dates from merchant guild days, when to be a professional one had to be a merchant, meaning a guild member, which non-members were not. The judges in France and Spain are adhering to the old law, applying local law, not merchant law, to retail property owners drawn to invest and not having had the personal decision-making options professionals would have. Britain, Holland, the IMF (as an international financial concern, and the LBW-UB and TIF, and Avocat Hamilius, are attempting to use 20thC. International Law, which the EU bases its law on (modifying as it is forced to), which is an imperial system of law, which means it is not really law, but what the “emperor”, the strongest party, wants.

    It is because the strongest party should be Britain and Holland and the EU that Luxembourg has been casual about violating the old law (on which it depends for its status as a merchant-banking nation, able to serve inter-national merchants, keeping their invested moneys inter-national and so not taxable in their home nations. The 20thC. Law system is falling apart now, though (for losing its credibility as a law system for having no integrity as a law system, for serving the strong to abuse as serves their purposes), wherefore Luxembourg is having to reconsider its position in the Landsbanki Receivership case. The actions of the French and Spanish courts asserting their rights to jurisdictions (actions against retail investors are local, not inter-national) has, with “legally-sanctioned” commercial and financial sector abuses in other countries, such as Britain and Greece, has brought attention to the abusable imperiality of the law the EU bases its right to rule upon. Before this turn the case against EIO investors was “simple”: Keep them focused to thinking their adversaries were the Landsbanki bankers and keep them referring to their investments as “loans”, and thinking of them that way, so that in court they would not be addressing the issues before the court. They could then be made to be what their adversaries called them (and they ignorantly agreed themselves to be, and get a decision from the court before they caught their balance. Burden to undo the damage done them would then be theirs, and, especially just robbed, they would not be able to afford to do anything. This is a standard form of ‘legal’ robbery.

    Now that you have a second chance you need to determine what you are and where you are, and who it really is who is trying to rob you, and why and for whom. The Landsbanki bankers are long gone from the business you are involved in, but they can tell what they were doing, and why, when they offered Equity Investment Opportunities, which was raising cash from any investors they could draw investments from, to try to keep their doors open (while adversaries to them in the marketplace, and in “regulatory” authority positions, both primarily in Britain, were trying to close them, to rid their markets of their competition and score on shorts and default swap insurance policies they had taken against them).

    It would be nice for everyone if Iceland’s prosecutors, and courts, were more adjudicative than political, but they are, instead, the other way. This means you cannot count on anything they do being sincerely, instead of politically, motivated. The whole business you are caught up in is not anything dangerous, from an historical perspective. It is more a circus, but less fun when you are caught up in it, I know.


    23 Dec 12 at 1:52 am

  6. […] whereas the whole amount was lost to the bank. The loan saga is recounted in an earlier Icelog. Here is further to the charges brought now by the Office of the Special Prosecutor and here is an […]

  7. […] shareholder, was also charged in the al Thani case and now sentenced. Other earlier high-fliers charged earlier are Jón Ásgeir Jóhannesson, Glitnir’s largest shareholder and also Hannes […]

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