Verdict: Kaupþing Iceland Bank Director Must Pay Skip to content

Verdict: Kaupþing Iceland Bank Director Must Pay

Reykjavík District Court ruled on Wednesday that Ingólfur Helgason, former director of Kaupþing Bank in Iceland, must pay Arion Bank, founded after the collapse of the former bank, ISK 9.3 million (USD 75,000, EUR 58,000) because of a bullet loan granted to him in early 2006.

kaupthinghead_ipa-sjoThe former Kaupþing headquarters. Photo copyright Icelandic Photo Agency.

The loan was worth ISK 50 million (USD 406,000, EUR 311,000) and intended for buying shares in Kaupþing. However, according to the debit of PricewaterhouseCoopers, the loan was not used for that purpose., vb.is reports.

Even so, Ingólfur submitted shares that he already held in Kaupþing as collateral for the loan. The funds were disbursed to two accounts in Ingólfur’s ownership.

The amount that he is to pay, according to Wednesday’s verdict, corresponds to ten percent of his personal liability of the loan’s principal.

In August 2010, when the loan was called in, it stood at ISK 88 million. Accrued interests amounted to more than ISK 5.4 million and his entire debt therefore ISK 93.4 million (USD 758,000, EUR 580,000).

The board of Kaupþing declared in September 2008 that personal liabilities because of loans for buying shares had been disallowed.

The verdict supports Arion Bank’s pleadings in that as the loan wasn’t used for buying shares in Kaupþing, the disallowance is not in affect in Ingólfur’s case. He therefore must pay the amount requested by Arion Bank.

ESA

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