God, there are so many corruption scandals emerging these days that my head is spinning. I’d love to inform the World at Large [that’s you] about them but honestly, I wouldn’t know where to start.
Except maybe with Kaupthing Arion Bank’s bizarre and completely outrageous settlements with this country’s former tycoons.
First, Hagar. Hagar is a company formerly owned by Jón Ásgeir Jóhannesson* and his father Jóhannes Jónsson of Baugur renown. It holds a whopping 60 percent market share in grocery retail in this country, runs Bónus and Hagkaup and 10-11, as well as a slew of other shops like Zara, Debenhams, All Saints, Top Shop et al. When Baugur went bust last year, they managed to pull a few acrobatic stunts with Hagar so it didn’t go under with the rest. Long story short, Hagar is now owned by Kaupthing Arion [or AriJón as it’s dubbed by some people around here], who have reportedly been tossing it around like a hot potato, at a loss as to what do with it.
First, Jón Ásgeir and Jóhannes asked if they could kindly have it back, minus the colossal debts that are on it. The logic was that there was no one else in the entire country better equipped to run it than they were, what with their vast experience in insanely leveraged takeovers food retail operations. Kaup Arion hummed and hawed about that one for a while until the roar of indignation from the Icelandic public managed to penetrate the glass walls of their castle and they refused.
Now, a few months later, they have decided to put Hagar on the market, i.e. list it on the Iceland Stock Exchange, allowing “the public” [who of course are swimming in money these days] to buy shares. Meanwhile, Hagar staff are allowed to own a piddly 15 percent, of which Jóhannes Jónsson may own only ten percent. Jóhannes, however, gets to stay on as Chairman of the Board, i.e. run the company.
The trouble with the above arrangement is the aforementioned lack of funds amongst the Icelandic public AND as of yet there is no discernible method for preventing shell companies formed in tax havens [but surely not by JÁJ and JJ, no no no] to buy large chunks of the company, thereby regaining control of it.
So that’s one stunt. But Arion has pulled more. For instance, allowing Ólafur Ólafsson, formerly one of Kaupthing’s owners and renowned for his involvement in the Sheik Al-Thani deal shortly before the bank collapse, to maintain control of his shipping company Samskip. Not only does Ólafur owe the bank BILLIONS of krónur, he is also under investigation by the Special Prosecutor’s Office and had his homes and other properties raided a few weeks ago.
Happily, though, Arion has rejected the request by the two Björgólfurs that it write off the loan they took to acquire Landsbanki back in the early noughties and is now initiating proceedings against them to try to reclaim that capital. It does, however, beg the question – why do JÁJ, JJ and ÓÓ hold such favour, when the two B’s do not?
* Clearly Jón Ásgeir’s Wikipedia page hasn’t been updated in a while.