30-Mar-2016: Liquidators' Update, see Deloitte site

Media Reports

This page contains brief summaries of and links to media reports of relevance. Click on one of the topics or the source below each entry to see only reports on that topic or from that source.  See Selected for the media reports that the site editors have selected as the most important or relevant.

Iceland deal may be put to vote

Icelanders may demand another referendum before agreeing to pay the £2.2bn owed to Britain after the collapse of Landsbanki's UK retail bank Icesave.

The latest deal, under which Reykjavik will repay the sum plus interest at 3.2%, is regarded as far better than the previous scheme, which set the rate at 5.5%.

Johannes Skulason, a senior figure in the InDefence campaign that opposed the last deal, said many Icelanders were still sceptical.

'People are trying to work out what this will cost our country and at the moment the view is still mainly pretty negative,' he said.  19-Dec-10.


Icelandic banks 'broke the rules' before UK deposits

Glitnir and Landsbanki were breaching banking regulations by the time 64 British local authorities deposited most of their £800m into the Icelandic lenders, according to two secret reports on the collapse.

Documents commissioned by Iceland’s special prosecutor and seen by The Sunday Telegraph suggest Glitnir was operating below the legal limits of its capital adequacy ratios by the end of 2007. A second report for the prosecutor’s office claims Landsbanki also breached the conditions of its banking licence at the end of 2007.. . .

Both reports are critical of Landsbanki’s and Glitnir’s auditors, the Icelandic branch of PricewaterhouseCoopers (PwC), arguing that it should have spotted mis-statements.


PricewaterhouseCoopers criticised in Landsbanki crash report

A report on behalf of Iceland’s Special Prosecutor into the banking crisis says that the Icesave debt upon the Icelandic state would have been massively lower had PricewaterhouseCoopers, Landsbanki’s external auditing company, done its job properly.

According to the report’s Norwegian main author, if PricewaterhouseCoopers had been honest in its reporting of Landsbanki, the bank would have lost its operating licence no later than the end of 2007.

Among other things, the report criticises the auditors for not having flagged up the so-called Icelandic Affair. The Icelandic Group took massive loans from Landsbanki and was allowed to continue borrowing after it became apparent the company would have difficulty servicing its debts. Icelandic Group was saved from being put on Landsbanki’s defaulters’ list by a EUR 40 million loan from Grettir ehf. Grettir ehf. in fact got the 40 million directly from Landsbanki and all three companies involved were owned by Bjorgolfur Gudmundsson. . . 10-Dec-10.

Landsbanki Guernsey depositors challenge island's chief minister

Landsbanki Guernsey depositors fighting for the return of their entire savings are now facing another battle - against the island's chief minister, who is accused of misleading the Guernsey States Assembly over the proportion of their funds depositors are likely to see returned.

Depositors are considering making a formal complaint to the States Members Conduct Panel against Chief Minister Lyndon Trott, who twice stated they could recoup in excess of 100 per cent of their savings - a remark referred to by administrators Deloitte as "speculation."

Deloitte have long estimated that the best depositors should hope for is a recovery of 81-90p in the pound over the next few years. A higher return is, in theory, possible if legal action in Iceland proves successful although Deloitte "remain cautious about the prospects of success."  09-Dec-10.

Guernsey Financial Services Commission issues Landsbanki statement

The Royal Court has granted the application for the compulsory winding up of the company and has agreed to the appointment of the former Joint Administrators (“JAs”) as Joint Liquidators (JLs”). Messrs Richard Garrard and Lee Manning have been duly sworn in as JLs.

The GFSC had no objection to the JAs applying to the Royal Court to put LGL into liquidation and said so in Court. This is a natural progression since the administration process had substantially run its course and the JAs were in the last phase of the recovery of LGL’s assets, principally the remaining property development loans. IFCfeed website. 08-Dec-10.

Landsbanki in liquidation

Landsbanki Guernsey has been placed into liquidation by the Royal Court.

The bank has been in administration for more than two years since the collapse of its parent in Iceland during the global financial crisis. Savers have so far received 67.5p for every pound they had in their accounts.

The Joint Administrators, Richard Garrard and Lee Manning, were appointed to recoup as much money as possible from the bank's assets. Now they believe that process has reached an end, and so the court has appointed them liquidators to wind the bank up. The Joint Liquidators plan to make a further payment to depositors of up to 7.5p in the pound. There could then be a final payment to savers of an unknown amount once the process of winding up Landsbanki Guernsey is complete.

The Guernsey Financial Services Commission is requesting the surrender of Landsbanki Guernsey's banking licence because it no longer has sufficient assets to be licensed.

Savers have campaigned for Guernsey's States to make up any shortfall in the repayments to them but have so far been unsuccessful, despite arguing that Guernsey should have protected their assets. The island introduced a depositors compensation scheme following the Landsbanki Guernsey affair. 08-Dec-10.

Iceland corruption investigator Eva Joly may quit in frustration

Iceland's anti-corruption expert, Eva Joly, investigating "suspicions of criminal actions" at Kaupthing, Glitnir and Landsbanki, has threatened to resign if the inquiry continues to be dogged by lack of political will.

Eva Joly, who advised on France's Elf Aquitaine scandal and the UK's BAE inquiry, said the scale of potential corruption at the Icelandic banks should be treated as one of the important financial investigations Europe has ever known. . . .

In a television interview, she criticised a lack of political will in the Icelandic government to bring anyone who has committed economic crimes to justice.

Iceland's special investigation team is now working on more than 30 potential cases relating to the banking system, after Kaupthing, Glitnir and Landsbanki collapsed and were taken over by the Icelandic government last October. 02-Dec-10.

Landsbanki bought £220m of its own shares prior to collapse

Landsbanki, the Icelandic bank which owned Icesave, bought more than £220m of its own shares in the days leading up to its collapse, creditors have been told.

The Resolution and Winding Up Committee told a meeting of creditors in Iceland that the purchases were being "investigated".

The revelation will prove embarrassing for London-based advisers of Landsbanki . .

Creditors were also told that the committee was suing former executives of the bank who authorised £200m of loans to "related parties".  02-Dec-10.

Landsbanki Committees Seek Compensation From Former Executives

(Bloomberg) -- Landsbanki Islands hf’s winding-up and resolution committees are seeking compensation from the bank’s former executives for allegedly granting loans to related parties.

The committees want the executives who ran the bank in 2008 to pay it 30 billion kronur ($258 million) to 35 billion kronur in compensation for losses on the loans, they said in an e- mailed statement today following a creditors’ meeting. . .

The bank has taken decisions on 9,152 claims filed against it, the committees said in the statement.

“By far the greatest number” of claims discussed at previous creditor meetings “were objected to,” according to the statement.  01-Dec-10.

Landsbanki administrators accuse auditor of negligence

PricewaterhouseCoopers warned it will face claims for damages on behalf of collapsed Icelandic bank's creditors.

Administrators to Landsbanki, the failed Icelandic bank behind the Icesave internet deposit account scandal, have accused the firm's former auditors, PricewaterhouseCoopers, of negligence, warning the accounting firm they expect to claim damages on behalf of creditors.

Landsbanki's creditors include more than 100 UK councils which placed a total £900m with Icesave and — unlike British retail savers — were not protected by a deposit guarantee. The negligence allegations set out at a creditors' meeting yesterday relate to PwC's audit of Landsbanki's 2007 accounts and an endorsement of its half-year financial update six months later. . .

The accusation against PwC's Iceland operations comes after a year of forensic investigations conducted by a team from Deloitte in London. As well as signalling their intention to pursue damages from PwC, administrators have filed a legal claim against former Landsbanki executives relating to losses of more than 30bn kronur (£165m). 01-Dec-10.

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