Kaupthing’s loan book exposed and an injunction ordered against RÚV
by alda on August 1, 2009

Yesterday the website WikiLeaks* published TOP SECRET information about loans made by Kaupthing bank just before the Big Meltdown last October. The info is a 209-page inside document containing slides used at a meeting of the bank’s loans committee on September 25 last year.

The leaked document shows definitively that the bank made massive, high-risk loans to a select few, most notably the largest shareholders in the bank and associated parties. These loans had more than EUR 45M exposure to the client and were in many cases awarded without any collateral or covenants.

Also, it has come to light that there were large sums of money transferred out of the bank AND massive loan write-offs in the few days preceding the collapse. Thus all evidence indicates that the big players knew exactly what was about to go down and were taking appropriate measures to save their own asses.

According to visir.is, loans made to the core investors of Kaupthing [the brothers Ágúst and Lýður Guðmundsson], and companies owned by them, amounted to some ISK 300 billion [USD 2.3 bn / EUR 1.6 bn].

Robert Tchenguiz, a member of the board of Exista [owned by the brothers] received loans of some ISK 330 billion.

Ólafur Ólafsson, he who once flew in Elton John to perform at his birthday bash [and who is associated with shipping company Samskip], received a loan of some ISK 140 billion.

Companies associated with the Baugur family received a loan amounting to some ISK 320 billion at the current rate of exchange.

AND THERE ARE MORE.

Seriously, I have a hard time getting my head around the iniquity practiced here. These were people who collected deposits from hard working individuals like you and me and used them as their own private money pit. As though nothing were more natural than to vacuum up funds from trusting people Europe-wide and just use it to play with. To buy toys with. Like jets. Or yachts. Or aging pop stars. GOD!!!

AND AS IF THAT WEREN’T ENOUGH…

As soon as the information became available on WikiLeaks, Kaupthing’s legal department went into overdrive trying to get the info removed. They started by threatening the site holders with a lawsuit. The site holders responded by giving them the finger, to wit:

No. We will not assist the remains of Kaupthing, or its clients,
to hide its dirty laundry from the global community. Attempts by
Kaupthing or its agents to discover the source of the document in
question may be a criminal violation of both Belgium source protection
laws and the Swedish constitution. Who is your US counsel?

Not to be undone, Kaupthing today applied for an injunction against RÚV [Iceland's national broadcaster] which was planning to cover the matter during its evening news hour [RÚV broke the news of the WikiLeak documents yesterday]. Unbelievably THE INJUNCTION WAS GRANTED just before the news was to go on the air. For some reason it was only aimed at RÚV, not at the other Icelandic media, although the latest is that Kaupthing has threatened injunctions against them, too, if they do not remove all discussion of the matter from their sites.

Particularly baffling in this is that New Kaupthing bank is not the same bank as the one that collapsed – the bank that applied for the injunction today is a bank OWNED BY THE PUBLIC SECTOR and it is hard to see why it goes to such great lengths to keep this information hidden from its owners – the Icelandic public. To the point of legally banning the national broadcaster – also owned by the people – from discussing matters of such great public importance.

Seriously. It does not compute, and my head hurts just thinking about it.