FL Group: Alleged unauthorized transfer of funds not under investigation Skip to content

FL Group: Alleged unauthorized transfer of funds not under investigation

The Icelandic National Broadcasting Service, RÚV, reported on Friday that the Icelandic Financial Supervisory Authority is not looking into FL – Group’s alleged unauthorized transfer of funds to Luxembourg.

RÚV asked the Icelandic Stock Exchange (ICEX) if there was reason to investigate the truthfulness of unsubstantiated reports that FL- Group CEO Hannes Smárason had transfered ISK 3 billion to a Luxembourg subsidiary of Kaupthing without any formal loan agreements or other similar documentation. ICEX referred the matter to Icelandic Financial Supervisory Authority, FSA, where RÚV was told that the matter was not being looked into.

The Financial Supervisory Authority appointed a new managing director last July, Jónas Fr. Jónsson. Jónsson is an Icelandic educated lawyer with a LL.M.-degree from Cambridge University and an MBA degree from Vlerick Leuven Gent Management School in Belgium. Jónsson spent five years in Belgium in charge of monitoring internal markets for the supervisory authority of the European Free Trade Association. He is the son of Jón Magnússon, legal council for Baugur-owned media conglomerate 365. Jónsson has long been an active member of the Independence Party. His wife sits on the board of directors of the shipping company Samskip known for its ties to the Progressive Party.

In 2004, the daily DV and RÚV reported on a hidden transfer of approximately USD 5 million made by Hannes Smárason’s former employer deCode Genetics in 1999 to a Luxembourg holding company, Biotek Invest SA, while Smárason served as deCode’s Chief Business Officer. Both Smárason and deCode CEO, Kári Stefánsson, have refused to disclose the purpose of the transfer or the identity of the beneficial owners of Biotek Invest SA.

Last Friday, in the op-ed column Staksteinar, Morgunbladid wrote that “in Iceland conditions for engaging in illegal insider trading are particularly favorable. Everyone knows everyone else. It is easy to obtain information. Share prices are extremely high. So high that it is obvious in most cases that the companies can not support them.” Morgunbladid continued “it is high time that the business practices [on the Icelandic Stock Exchange] be investigated more thoroughly than they have been to date. There’s a new team at the helm of the Financial Supervisory Authority. They should scratch the surface and see what they find.”

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