Ombudsman investigates bank privatization Skip to content

Ombudsman investigates bank privatization

By Iceland Review

The possible lack of competence of prime minister Halldór Ásgrímsson to participate in the sale of the Bunadarbanki in 2002 has led the Althing Ombudsman to investigate rules on privatization.

The Althing Ombudsman monitors the administration of the state and local authorities and safeguards the rights of the citizens vis-à-vis the authorities.

Prime Minister Halldór Ásgrímsson of the Progressive Party has been harshly criticized for his role in the privatizations of Landsbanki and Búnadarbanki in 2002. This summer Halldór admitted trying to persuade the two groups selected to bid for Búnadarbanki to work together and join up in a single bid.The Icelandic National Audit Office investigated the financial ties between Halldór Ásgrímsson and the S-Group which ultimately prevailed in winning the controlling stake of Búnaðarbanki.

The Althing Ombudsman sent the four following questions to the prime minister on Wednesday regarding the execution of the sale of government owned companies.

1) Has the government taken a position on the suggestion from the Icelandic National Audit Office this summer that the legal mandate of the ad hoc ministerial committee on privatization and the government’s executive committee on privatization is unclear? Will the government introduce a bill concerning the process of privatization?

2) Is there is a plan to revise the 1996 rules and regulations governing the process of privatization?

3) Has the conflict of interest clause been thoroughly introduced to those who were involved in the privatization process? Is there is a reason to?

4) Is there is a plan to sell other government companies?

The Althing Ombudsman did not take into consideration whether or not Halldór was competent to participate in selling the Búnadarbanki to the S- group.

The Althing Ombudsman ends his letter with the following message: “I emphasize that these questions are made in order to assess whether or not it is necessary to revise those rules that hitherto have been followed, or to put in place new rules or even legislation.”

Prime Minister Halldór Ásgrímsson welcomed the outcome of the investigation of the Althing Ombudsman and said that in his view this outcome should encourage the opposition to bury their battle axes and stop criticizing the work of the government.

The leaders of the opposition believe the questions asked by the Althing Ombudsman show that there were substantial grounds for doubting the implementation of the Búnadarbanki privatization and the competence of the parties involved.

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