Borgun Sale ‘a Blunder’? Skip to content

Borgun Sale ‘a Blunder’?

By Iceland Review

An “obvious blunder” is what Prime Minister Sigmundur Davíð Gunnlaugsson last night called Landsbanki bank’s sale of its shares in the electronic payment service company Borgun in 2014, RÚV reports. The bank’s sale of its 31.2 percent stake in the company to Borgun Holding Company and BPS for ISK 2.2 billion (USD 16.74 million, EUR 15.46 million) in November of 2014, has created debate lately, especially following the news that those who purchased it stand to gain substantially from Visa Inc.’s takeover of Visa Europe. The sale process itself was also criticized at the time for lack of transparency and for being conducted behind closed doors, not the least because some of the investors had close ties to Finance Minister Bjarni Benediktsson, RÚV reports.

In Alþingi, the Icelandic parliament, yesterday, Árni Páll Árnason, leader of the Social Democratic Alliance, asked Sigmundur Davíð whether he would support an investigation of the sale, either in Alþingi or independently. Sigmundur replied: “I think it makes sense for parliament to follow through in the matter.” Steinþór Pálsson, CEO of Landsbankinn, told reporters yesterday that the bank had no information that Borgun could potentially benefit from the takeover of Visa Europe.

“We were under pressure from competition authorities to sell,” Steinþór told RÚV last week, “and we thought we were getting a good price. We knew of this Visa contract, or a statement of intent abroad. We saw no obvious connection, because Borgun had hardly been in the Visa business; they had mainly been a MasterCard company. It’s not until we sell that they increase their Visa business much more, and as a result comes this payment they’re getting because of business after we sold, something we didn’t foresee at the time.”

About 100 people protested the Borgun sale in front of the Landsbanki headquarters on Austurstræti, downtown Reykjavík, this afternoon, under the slogan, “Closed because of corruption.” Landsbanki is 98 percent government-owned.

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