Iceland’s Kaupthing Lent ISK 500 Billion to Owners Skip to content

Iceland’s Kaupthing Lent ISK 500 Billion to Owners

By Iceland Review

According to its loan records, Iceland’s largest bank, Kaupthing, lent almost ISK 500 billion (USD 4.4 billion, EUR 3.5 billion) to some of its major owners at least three months before the collapse of the country’s banking system.

The headquarters of Kaupthing in Reykjavík. Copyright: Icelandic Photo Agency.

According to Morgunbladid, which has a copy of the loan record, the loans were either granted to Icelandic companies in the ownership of these individuals or holding companies registered in their names in the Netherlands or Tortola.

The loans are indexed and were mostly granted through Luxembourg and London. If the full amount is converted to today’s exchange rate of the ISK, it comes closer to ISK 573 billion. The amount of these loans was confirmed by Kaupthing on Friday.

Ágúst Gudmundsson and Lýdur Gudmundsson were granted ISK 169.1 billion (USD 1.5 billion) through the Exista conglomerate; ISK 108.4 to Exista hf. and ISK 30.8 billion to their holding company Bakkabraedur Holding BV.

Exista was the largest shareholder in Kaupthing when the bank was nationalized.

An outstanding loan to Robert Tchenguiz, an Exista board member, amounts to ISK 230.2 billion (USD 2.0 billion, EUR 1.6 billion) according to the loan records, which is ISK 278 billion according to today’s exchange rate.

Seven out of 13 companies under Tchenguiz’s ownership that were granted part of the loan are registered in Tortola. The Kaupthing resolution committee has filed a lawsuit against one of Tchenguiz’s companies because of default.

Lastly, ISK 78.9 billion (USD 698 million, EUR 548 million) were granted in loans to Ólafur Ólafsson.

Claims to all of these loans either lie with the resolution committee of old Kaupthing or the new state-run Kaupthing. It is unclear how high the losses will be because of them.

Click here to read more about Icelandic companies in Tortola.

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