REYKJAVIK — Failed Icelandic bank Kaupthing said Monday it would seek to recover 32 billion Icelandic kronur (197 million euros, 244 million dollars) from former executives who had taken loans to buy shares in the bank.
Around 80 former employees, many of them former top executives, have been informed they would be held personally liable for huge loans they had taken to buy shares in Kaupthing before it collapsed in October 2008, administrators of the bank's liquidation said in a statement. . .
Iceland's third failed bank Landsbanki has also said it is planning a lawsuit to try to get back as much as 1.5 billion euros from former executives and shareholders. 17-May-10.
The former chief executive of Singer & Friedlander is preparing to take the Financial Services Authority to judicial review over its refusal to hold an inquiry into the failure of the Icelandic banks. Tony Shearer, who led the 100-year-old City investment bank before it was taken over by Kaupthing in 2005, accuses the regulator of not doing enough to prevent the crash that cost the British taxpayer £8bn and left hundreds of UK savers out of pocket. . .
Mr Shearer has written to Gordon Brown, the Prime Minister, Lord Myners, the City minister, and Lord Turner, chairman of the FSA, asking for a formal inquiry into why all the warning signs about the instability and potential criminal activity at Kaupthing were ignored. . .
However, the FSA has washed its hands of responsibility for the bank's activities in London before the crash, claiming that it was powerless to act when the home regulator in Iceland was meant to be monitoring Kaupthing.
Lord Turner has told Mr Shearer that he sees no need for a public inquiry, adding "there is nothing further to be gained from further exchanges on the subject of Icelandic banks and our past regulation of banks generally".
Hundreds of UK-based savers with Kaupthing in the Isle of Man and Landsbanki in Guernsey have still not been fully compensated for their losses, while dozens of British councils, hospitals and charities are also waiting in line with commercial creditors.
"The papers have reported that you have called for the FSA to carry out a special investigation into Goldman Sachs," Mr Shearer wrote to Mr Brown. "Will you now call for the FSA to carry out and publish such an investigation into the activities in the UK of Kaupthing and the other Icelandic banks? 09-May-10.
Two former executives of collapsed Icelandic bank Kaupthing were ordered on Friday to be held in police custody while prosecutors consider a criminal case against the pair.
Reykjavik District Court approved a request from the special prosecutor responsible for investigating the Icelandic banking crash of October 2008 to hold former CEO Hreidar Mar Sigurdsson for 12 days.
Magnus Gudmundsson, the former head of Kaupthing's Luxembourg operations, will be held for seven days.
Both men were detained Thursday -- the first high-profile arrests in the wake of the banking crash, which crippled Iceland's economy and forced out the tiny Nordic country's former leaders. . .
Iceland's Special Prosecutor Olafur Thor Hauksson said that Sigurdsson is suspected of falsifying documents and breaking laws on stock trading for personal gain. The Associated Press 07-May-10 ~ Bloomberg Business Week website.
The International Monetary Fund (IMF) has cleared a $160m (£104m) loan to Iceland that was contested by Britain and the Netherlands.
The money is the latest tranche of $2.1bn in IMF aid to stave off Iceland's financial collapse. But approval got caught in wrangling over claims for compensation for the collapse of the Icelandic bank Icesave.
Release of a further tranche of money brings to £1.2bn the amount of loans that the IMF has extended to Iceland. 16-Apr-10.
A DAMNING account of Iceland’s failure to protect ordinary depositors – including hundreds of thousands in the UK – who entrusted their savings to online bank Icesave will be published today by a specially convened truth commission, set up in the wake of Iceland’s banking meltdown 18 months ago.
A 2,000-page report into the system-wide financial collapse in October 2008, commissioned by Icelandic MPs, will contain detailed chapters on both the Icesave affair and Iceland’s pitiful depositor guarantee fund. Former ministers and regulators responsible for ensuring deposit guarantees were sufficiently robust are expected to face severe criticism. Guardian Service on Irish Times website - 12-Apr-10.
The world may have moved on, but some depositors caught up in the Icelandic banking collapse are still waiting for compensation.
Some 67 MPs have signed an Early Day Motion for the Government to define who's responsible for dealing with the £500 million lost by savers in Kaupthing Singer and Friedlander Isle of Man.
The Isle of Man regulator says: “Not us guv. The FSA and HMG told us to move the money to the UK.”
The FSA and Treasury say: “Depositors in the Isle of Man are covered by the Isle of Man regulator” — a right muddle in other words.
Many of those who lost their money are British expats who wanted to use a UK bank, but if you don't live here you can't have a UK bank account. The advice of the FSA has always been therefore to “use a UK bank in an offshore dependency” — like the Isle of Man, in fact.
So you do as they say, your money goes up in smoke, and then you sit in regulatory no-man's land with nobody prepared to address the issue with any urgency! City Spy - Business Section - London Evening Standard website - 24-Mar-10.
After the one-sided Icesave-vote last weekend not much has happened officially. The Icelandic government has stressed that the dispute must be put to a rest as soon as possible. The opposition leaders have said that unless an acceptable accord is reached they will not go along with an agreement. This has lead to declarations by Prime Minister Jóhanna Sigurdardóttir that the government might try to finish the negotiations alone. This declaration has a hollow ring, considering that the government has in fact been sent back twice because of widespread opposition. . .
So the question is. How can this be ended? Both the British and the Dutch government know that payment will take years as Alistair Darling said in an interview on Sunday. The burden of the payment will be carried by the now defunct Landsbanki, which should rightfully pay anyway. The dispute turns around a government guarantee for the full amount with interest. 12-mar-10.
The long awaited ‘Black Report’ into Iceland’s economic crisis is set to be delayed once again due to the long responses received from implicated parties.
The report by the Althingi investigation committee will be delayed by a further two to three weeks while committee members go over the more than 500 pages of answers received from the 12 current and former public officials formally invited to reply to committee accusations before publication of the report.
The report was originally scheduled for release last autumn and then delayed until the beginning of February, then the beginning of March and now, again, until two to three weeks into March, RUV reports. This time, the committee has not committed itself to a specific date.
A statement from the committee stated that the answers received represent the final materials needed and all that remains to do is to correlate the findings and print the extensive document. At this stage it is already logistically impossible to release it before the 11th March. 27-Feb-10.
REYKJAVIK (Reuters) - Iceland faced an extended cash crunch on Friday after failing to reach a new debt deal with Britain and the Netherlands.
Prime Minister Johanna Sigurdardottir held out the possibility of a last-minute deal over some $5.5 billion (3.6 billion pound) of “Icesave” debts despite the abrupt collapse of discussions on Thursday.
Time is running short, as a referendum is scheduled for March 6 over a previous repayment deal.
Voters are expected to reject that accord, putting the government under pressure and further postponing the prospect of financial aid to help revive the stricken economy.
The International Monetary Fund and Nordic countries have promised to loan cash-starved Iceland around $4.5 billion to help it to remove capital controls and get the economy moving again. But this is all on hold pending resolution of the Icesave debt.
“Nobody dares invest anything in Iceland until this issue is resolved,” said Lars Christensen, senior analyst at Danske Bank in Stockholm. Businessmortgageprovider website - 26-Feb-10.
Negotiations with Iceland over the repayment of £2.3 billion in debts to the UK have broken down after representatives of the island nation walked out of talks in London.
The walk-out means that Iceland will next week hold a referendum expected to reject a deal for repayment of cash owed to Britain and the Netherlands as a result of the collapse of Landsbanki, the bank behind the Icesave internet savings account.
The UK and Dutch governments this evening said they were "disappointed" that no deal had been reached after 18 months of talks.
Sources close to the talks said that Iceland had been offered an advantageous new floating interest rate on the debt, based on Libor (London inter-bank rate) plus 2.75%, which would have represented a significant cut on the 5.5% currently being charged. Also on the table was the offer of a two-year interest holiday worth around £400 million. 25-Feb-10.