The damages case of Glitnir Bank’s winding-up committee against businessman Jón Ásgeir Jóhannesson’s so-called “gang of seven” and the auditing firm PricewaterhouseCoopers was dismissed at court in New York yesterday and sent back to Iceland.
The headquarters of Glitnir, now Íslandsbanki, in Reykjavík. Copyright: Icelandic Photo Agency.
The ruling concluded that since all of the accused are Icelandic citizens and Glitnir an Icelandic company, the case belongs before Icelandic courts, Fréttabladid reports.
The winding-up committee is demanding USD 2 billion (ISK 232 billion, EUR 1.5 billion) in compensation, which it claims Jóhannesson and his partners defrauded from Glitnir in a complicated conspiracy against the bank’s shareholders.
The judge listened to the dismissal demand of the seven businesspeople and announced the ruling 40 minutes later. The dismissal was agreed to under two conditions.
The first is that the accused have to declare in writing that Icelandic courts have the jurisdiction in this case even though some of them have their legal domicile outside Iceland, and the second is that they have to agree that their overseas assets can be confiscated if they end up losing the case.
Steinunn Gudbjartsdóttir, chairwoman of the Glitnir winding-up committee, said the ruling is not a blow to their case. “I wouldn’t phrase it quite as strongly. It is certainly a disappointment but the case is not nearly over and this is not a ruling based on the content of the charge.”
Jóhannesson is pleased with the ruling. “I am very satisfied but at the same time sad for having had to go through this since May,” he told Fréttabladid, pointing out that the case has had serious consequences for the accused; he had to step down from the boards of companies in the UK, for example.
Jóhannesson does not believe the case can be reopened in Iceland. “I don’t see how the winding-up committee can take this case to Icelandic courts, having declared that they aren’t qualified to deal with it. Also, Icelandic legal experts have told me that the charge made in the US isn’t valid before a court in Iceland.”
He calls for the winding-up committee’s resignation. “They have spent a lot more than two billion [ISK] on this case and I cannot believe claimants will accept that. They gambled everything and lost, so they must feel obligated to step down.”
Regarding the cost, Gudbjartsdóttir said it didn’t go out the window as the work undertaken in the US will provide useful to the case when it is resumed in Iceland, although she wouldn’t reveal how much exactly the proceedings have cost until now.
She denied having said that Icelandic courts aren’t qualified to handle the case. “We have maintained that the case belonged in the US which was based on the advice of our lawyers. The court ruled otherwise and we respect that.”