Sigrún Davíðsdóttir's Icelog

Important step towards clarifying the relationship between Björgólfur Thor Björgólfsson and Landsbanki

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Today, a small investor in Landsbanki Vilhjálmur Bjarnason, now a newly elected member of Parliament for the Independence Party, won an appeal (in Icelandic) at the Icelandic Supreme Court, which will allow Bjarnason to call 15 witnesses and access a certain crucial email in order to clarify the role of Björgólfur Thor Björgólfsson in the collapse of Landsbanki. Bjarnason, together with other small investors, is preparing a possible compensation claim against Björgólfsson. The judgement today brings Bjarnason one step closer to such a case.

Björgólfsson, known as Thor Bjorgolfsson abroad, was the bank’s largest shareholder, together with his father, Björgólfur Guðmundsson. Pere et fils owned ca. 42% of the bank and are alleged to have controlled around 70% of the bank, through the bank’s own shares. Bjarnason alleges that Björgólfsson’s influence played part in the bank’s demise. In order to clarify these issues Bjarnason wanted to be allowed to call Björgólfsson and 15 others as witnesses.

Reykjavík County Court had earlier turned down his request. The Supreme Court has now turned that judgement around in Bjarnason’s favour, with the exception that he will not be allowed to have Björgólfsson questioned since Bjarnason might later bring a case against Björgólfsson.

The witnesses are i.a. the two former CEOs of Landsbanki, various other Landsbanki employees and employees of Novator, the investment company owned by Björgólfsson. Bjarnason will also get access to an email, said to be from Björgólfsson and his employee to FME, the Icelandic Financial Services Authority, sent early 2007, relating to ownership of Samson, the pere et fils company that held their Landsbanki shares. Björgólfsson’s father was the chairman of the Landsbanki board and there were at times two people closely connected to Björgólfsson on the board.

In the aftermath of the collapse of Landsbanki Guðmundsson went bankrupt but Björgólfsson survived. He was the largest owner of Actavis, a generic pharmaceutical company and did for a while hold the single largest loan in Deutsche Bank. Björgólfsson still has some investments in Iceland and Bulgaria and lives in London’s Notting Hill.

What Bjarnason is trying to show is that Björgólfsson and others hid the extent of Björgólfsson’s control of Landsbanki  – that Björgólfsson did in fact control the bank to a greater extent than his shareholding showed and also that he got more loans from the bank than indicated in Landsbanki annual accounts. If all this had been clear, Bjarnason says, he would not have invested in Landsbanki.

Statements of these witnesses are bound to throw a clearer light on Björgólfsson’s role in Landsbanki. Whether it will tell the saga Bjarnason alleges remains to be seen. So far, Björgólfsson has always refused these allegations and claims he never exerted any influence on the bank’s management.


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Written by Sigrún Davídsdóttir

May 16th, 2013 at 2:26 pm

Posted in Iceland

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