New chairman of FL-Group says no evidence of unauthorized transfers Skip to content

New chairman of FL-Group says no evidence of unauthorized transfers

By Iceland Review

Web-portal Ví, Morgunbladid and Icelandic National Broadcasting Service, RÚV, all reported on the FL-Group extraordinary shareholder meeting held yesterday in Reykjavík.

At the meeting FL-Group shareholder Vilhjálmur Bjarnason, adjunct lecturer at the University of Iceland and the president of the Icelandic Association of Independent Investors asked several questions of the board and the chairman. Among other things, he requested that the company’s auditors examine if ISK 3 billion was transferred without proper authorization out of the company’s accounts. Allegations to that effect have been widely reported in Icelandic media over the past few weeks. The new chairman of FL-Group, Skarphédinn Berg Steinarsson, said the company had already published the results of the first 6 months of this year without any comments. Over the next few months, this issue would be investigated further, together with many other aspects of the FL-Group’s operations, and the results would be announced at the Annual General Meeting (usually held in the spring).

Bjarnason also asked why FL-Group had not considered buying Sterling earlier and at a lower price since a possible purchase had been under consideration for over two years. Steinarsson replied that FL-Group had not previously had the opportunity to buy Sterling.

Bjarnason also asked about ISK 5 billion discrepancy between announcements about the new equity issuance; why the offering price of the issuance had been 10 per cent lower than the market price when the issuance was announced; what fees Landsbanki and Kaupthing Bank were being paid for underwriting the issuance; and whether a report of independent experts about the new issuance was available. Such a report is required under Icelandic law when equity is issued in return for assets such as shares in other companies; the board of directors of FL-Group recommended that participants in the new issue be offered the option to pay for the shares either with cash or shares in the ten largest companies on the Icelandic Stock Exchange.

When asked if he had received satisfactory answers to his question about the alleged unauthorized transfer of ISK 3 billion, Bjarnason replied that he had put the question to the company’s auditors, not the chairman. Bjarnason quoted a character, Umbi, from “Under the Glacier”, a well-known book by the Icelandic author and Nobel Laureate Halldór Laxness saying he would “have to infer answers from what they [FL-Group’s board and management] chose to keep silent about”.

Bjarnason said the replies to his questions were “not satisfactory” and that he would keep asking the questions “over and over” until he had received good answers. When asked if he did not have confidence in the board and the management of FL-Group he said he in the wake of the recent resignations from ranks of both the board and the management he did not do so.

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