From Iceland — It's Official Now: Magma Purchase Was Legal

It’s Official Now: Magma Purchase Was Legal

Published September 20, 2010

Magma Energy’s purchase of HS Orka through a Swedish puppet company has been found by a special committee to have been perfectly legal. One Icelandic official called the public reaction a double-standard. The two parties in the ruling coalition appear to be in disagreement about what the committee findings mean.
When Magma Energy bought Icelandic energy company Geysir Green Energy’s holdings of Iceland’s third largest power company, HS Orka – giving them almost total ownership of the company, despite assurances last September that they did not want a majority stake in the company – widespread public outrage was sparked, spearheaded by artist Björk Guðmundsdóttir. Last July, the government put a freeze on the purchase, and assembled a committee to investigate the legality of the transaction. Magma, for its part, ignored the freeze and continued payments anyway.
The committee’s findings are that there was nothing illegal in the purchase itself, although sources close to Fréttablaðið report that opinion was divided within the committee about the legality of the sale. The findings prompted foreign investment committee chairperson Unnur G. Kristjánsdóttir to tell Vísir that she welcomes the result. She added that the criticism of the purchase showed a double standard, as Icelandic companies also use puppet companies to circumvent the law in other countries.
Not even ministers within the government appear to be in agreement over what the findings mean. Minister for the Environment Svandís Svavarsdóttir told reporters over the weekend that the findings changed nothing about the government’s position towards Magma. However, Minister of Industry Katrín Júlíusdóttir said that the findings show that there is no other choice than to move forward with working out a deal with Magma.

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