DV served up a delicious little scoop yesterday in the form of a telephone conversation transcript between two Kaupthing insiders, one Halldór Bjarki Lúðvíksson from the bank’s Corporate Division, and Lilja Steinþórsdóttir, from Internal Auditing. In the phone call, the two discuss the involvement of Sheik Al Thani of Qatar, who purchased a 5% share in the bank just before it collapsed. This was, of course, used to bolster confidence in Kaupthing — after all, if a proper sheik thought it strong enough to invest in, it must be OK, and obviously share prices would be manipulated upwards. It goes without saying that smoke and mirrors were used in the transaction — offshore companies were created into which to transfer money, and then other offshore companies, and others still … all designed to hide the fact that Kaupthing was lending the sheik the dosh to buy the shares.
LS: OK, so why was Choice established, or what kind of company was it?
HBL: Um, this was yet another BVI* company.
LS: Yes, so is this just to hide the trail, or why is it done this way?
HBL: Yes, um, it’s to hide the fact that Óli [Ólafur Ólafsson, large Kaupthing shareholder] actually owned half.
LS: Oh, right.
HBL: The only way to flag this was for the company to be 100% owned by the sheik.
LS: For the sheik to own the whole thing.
LS: But what about those US dollars, what were they supposed to be for?
HBL: Basically that was just a kickback to the sheik, for being involved.
HBL: And so the sheik was promised 50 million dollars.
HBL: For immediate payout.
HBL: In order to, in order to, well, as a fee for lending his name to this.
So, according to this, the sheik received a kickback of USD 50 million just to lend his name to the deal — which would not have been a bad day’s earnings had the whole thing not blown up in their faces. However, I can’t imagine anyone paying even 50 bucks to use the name of Sheikh Mohamed bin Khalifa al-Thani these days — can you? Wouldn’t you just love to ask him: “So, Mr. Sheik MBKAT, was it worth it?”
* British Virgin Islands
[Phone transcript via Eyjan.]