Kaupthing Refuses Writing Off Debt of Icelandic Tycoons Skip to content

Kaupthing Refuses Writing Off Debt of Icelandic Tycoons

Kaupthing Bank has rejected the offer by Björgólfur Gudmundsson, former chairman of Landsbanki, and his son Björgólfur Thor Björgólfsson, often dubbed Iceland’s first billionaire, on writing off half of their ISK 5.9 billion (USD 46 million, EUR 29 million) loan to the bank.

Björgólfur Thor Björgólfsson. Photo by Geir Ólafsson.

“The offer was not accepted,” confirmed CEO of Kaupthing Finnur Sveinbjörnsson to Fréttabladid, adding, “The case is being worked on and has now entered a conventional collection process.”

Part of the loan was granted to Samson, an investment company in the ownership of Gudmundsson and Björgólfsson, in 2003 because of its 45.8 percent acquisition in Landsbanki. The father and son are personally liable for the loan.

The offer to Kaupthing included that the father and son would repay 40 to 50 percent of the loan but that the remaining amount would be written off by the bank. Fréttabladid’s report on the offer on July 7 sparked immense anger in society.

Minister of Finance Steingrímur J. Sigfússon said it was “the last loan under the sun” that should be written off, however pointing out that he couldn’t comment on the proposed write-off as a minister, only as a citizen of this country.

Gudmundsson has since been declared bankrupt—which was the largest personal bankruptcy in Iceland’s history—so it is assumed that Kaupthing’s claim will be directed at his son.

Björgólfsson’s only personal assets in Iceland are two houses in Reykjavík. The investor also holds a stake in companies based in Iceland, such as pharmaceutical company Actavis and telephone company Nova, Stöd 2 reports.

Nova, along with other companies, is in the ownership of investment company Novator, which is owned by BTB Limited, a company registered in the Virgin Islands.

According to Stöd 2’s sources, BTB Limited is one of the 400 offshore companies that are currently being investigated by the Commissioner for the Inland Revenue.

Novator’s representatives told Stöd 2 that discussions are ongoing with Kaupthing on Gudmundsson’s and Björgólfsson’s loan and that they had not been informed that the discussions were over.

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