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Glitnir’s winding-up committee brings charges against Jón Ásgeir Jóhannesson

So, the winding-up committee of Glitnir bank has formally charged Jón Ásgeir Jóhannesson, the bank’s main owner before it collapsed, for abusing his position, along with Jón Ásgeir’s business partner Pálmi Haraldsson [he who sobbed to DV that  he couldn’t leave his house without being harassed] and Lárus Welding, former CEO of the bank who was paid hundreds of millions of krónur both for coming on as CEO and then about 18 months later for stepping down. [Some might call that kind of money bribery, but you didn’t hear it from me.] Also charged are three other key employees of the bank [who as it happens are still working there … for Íslandsbanki, that is].

The winding-up committee is demanding ISK 6 billion in compensation.

The indictment in its entirety is published on Eyjan today. The press has been busy picking out blurbs from emails that these guys sent each other and reading them provokes a reaction that is somewhere between hilarity [because they seem so goddamn immature] and nausea [because they show such brazen disregard for other people’s money]. In the emails they’re wheeling and dealing, creating all sorts of complicated business deals that I personally can’t make heads nor tails of [and I pity those poor people who have to try and untangle the intricacies of these sorts of plots and am reminded once again that it’s not surprising the criminal investigation into the collapse is taking so long]. The ultimate aim, obviously, is to vacuum funds from the bank for their own personal use.

One individual, Einar Örn Ólafsson [not charged], is clearly alarmed and writes to Lárus Welding that he feels “our good owner” is putting him in an awkward position with his demands. He also expresses concerns that the value of shares that were put up for collateral for some kind of loan [shares in Goldsmiths – a UK retail chain] are worth a lot less than Jón Ásgeir claims, i.e. “1.5  and not 4” — whether he means pence or krónur is unclear.

One of the best email blurbs is this one, from the same individual:

I have to admit that I don’t understand why we don’t just loan Pálmi ISK 2 billion to stash away in the Caymans before he goes bankrupt. Instead of going into all these Goldsmith acrobatics.

Clearly someone had some common sense left in the bank. Too bad no one listened to him.

Incidentally, in the indictment, Jón Ásgeir, Lárus and Pálmi are all listed as having “an undisclosed address in the United Kingdom.”

PS – if you’re coming over here from Affarsvarlden, please note that Alda is my actual name, not a pseudonym. [How’d they get that idea?]

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  • sylvia hikins April 8, 2010, 11:46 pm

    Was the compensation paid to Icelanders with deposits in the collapsed banks the 20,000 or so euros under the insurance scheme? I sat opposite someone in Reykjavik who told me she had virtually lost her life savings when the Icelandic banks collapsed. At least in the UK small savers could spread their money across a number of banks. The choice in Iceland was such a small one, hence the individual losses must have been proportionately higher. The person I spoke to is virtually working 7 days a week to pay the bills.
    I sat there listening feeling helpless and appalled. Justice can’t come soon enough for those despicable businessmen whose greed has destroyed so many lives.
    sylvia from viking wirral

  • Lissy April 8, 2010, 11:50 pm

    When I read that quote about Goldsmith and acrobatics earlier, it made no sense. Thanks for putting it in context, because now I understand the sarcasm.

  • alda April 9, 2010, 12:08 am

    Sylvia – no, Icelanders’ deposits were covered in full. She must have had money in a money market fund or shares in the bank. Lots of people did.

  • James April 9, 2010, 7:31 am

    “an undisclosed address in the United Kingdom”

    Hopefully they are of no fixed abode, seeking shelter each night in cardboard boxes underneath Waterloo Bridge. But I suspect they’re actually renting huge townhouses in Kensington – making the most of it before the 5 metres by 4 metres prison cell…

  • Joerg April 9, 2010, 7:33 am

    “Clearly someone had some common sense left in the bank. Too bad no one listened to him.”

    Are you sure about this? Maybe, Pálmi did listen and stash some money in the Caymans after this rebuke.

    And didn’t Lárus Welding change his name

    http://www.economicdisasterarea.com/index.php/uncategorized/new-name-still-the-same/

    before heading off to Harvard?

    http://www.economicdisasterarea.com/index.php/features/larusoff-to-harvard/

    So, the prosecutors might not be able to find him in the UK.

  • Michael Lewis April 9, 2010, 9:33 am

    Purely a personal view, but it looks likely that we’ll see some sort of fraud convictions. Amazed that regulators didn’t spot some of this earlier. You have to wonder why they didn’t notice. I remember the press around the takeover of Singer and Friendlander by Kaupthing, much of it was negative and querying why our own FSA were not looking a bit closer at ‘personalities’.


    She must have had money in a money market fund or shares in the bank. Lots of people did.

    Similar problems with people in the UK – someone was interviewed on TV, because he had -all- his pension in one stock – RBS. For most people who don’t want to do legwork, the humble index tracker fund is best. In the UK, if you hold shares with a broker – doesn’t matter if they go bust – you still own the shares (even if they are in a nominee account i.e. held collectively by the broker on behalf of thousands of small investors).
    So, I am suprised the money market fund holders in Icelandic banks were burnt – thought they’d have been safe, unless it was some sort of ‘replication’ of an money market index, and people were essentially buying some structured product marketed by the bank.

  • andy April 9, 2010, 10:53 am

    if it was happeneing at Glitnir (Enron style) then imagine what was happening elsewhere.

    Bet they do not sack the three other Glitnir indivduals although their integrity is up for discussion.

  • alda April 9, 2010, 10:58 am

    andy – apparently they’ve been temporarily suspended from the bank until their names are cleared. Or not.

  • Erlendur April 10, 2010, 3:21 pm

    There’s also a third option for savings: Housing. A lot of people took out a currency indexed mortage on their house when they bought a new home during the „góðæri“. So when the ISK collapsed they lost their equity incredibly rapidly.