"Major Deception" Occurred With Bank Sale, Investigation Finds - The Reykjavik Grapevine

“Major Deception” Occurred With Bank Sale, Investigation Finds

Published March 29, 2017

Photos by
Vísir/Stöð 2 Screenshot

The Parliamentary Investigation Commission (RNA) has concluded that the German bank Hauck & Aufhäuser was never an investor in The Agricultural Bank of Iceland (Búnaðarbanki) when the Icelandic government’s 45.8% share in the bank was sold to the now-defunct Kaupthing Bank in January 2003, and “major deception” was committed against the Icelandic government by jailed banker Ólafur Ólafsson, amongst others, through a deliberate obfuscation of who was actually investing in the bank.

In a press release from RNA, RÚV reports, the Commission states that detailed written documents show that Hauck & Aufhäuser, Kaupthing, Kaupthing Luxembourg, and a group of investors working for and at the behest of Ólafur made secret deals to hide who actually owned the shares that Hauck & Aufhäuser purported to own. The actual owners of these shares, Welling & Partners, is an offshore company located in the tax shelter Tortola.

With numerous secret agreements and transfers of funds to Welling & Partners’ bank account at Hauck & Aufhäuser, the latter was protected from any financial risk. Welling & Partners reported received $100 million USD for their part. Three years later, they transfered $57.5 million USD to Marine Choice Limited, a company started by Mossack Fonseca and registered in Tortola. The owner of Marine Choice Limited, it turned out, was none other than Ólafur Ólafsson, a former 10% owner in Kaupthing who is now in prison for his role in Iceland’s 2008 financial collapse.

Another $46.5 million USD was transfered from Welling & Partners to another company registered in Tortola, Dekhill Advisors Limited, but it has not yet come to light who owned that company.

Gylfi Magnússon, who was appointed Minister of Business in the wake of the emergency 2009 parliamentary elections, told RÚV that “gross and deliberate deception” had been at work here.

Ólafur, for his part, did not appear to express a great deal of remorse. Vísir reports his own words, quoted in the report: “You can’t expect me to be here, 15 years later, to respond to the speculations of the media. Just … I’m sorry,” saying these final two words in English.

Go travel with Grapevine tried and recommended tours by Grapevine. Fund Grapevine journalism by booking with us.


Show Me More!