The Icelandic government will introduce a parliamentary bill to abolish Icelandic State Financial Investments, the government’s holding company on the financial market. The decision is made in response to widespread criticism of how the government handled the sale of 22.5% of Íslandsbanki bank last month. No further sale of the state’s shares in Íslandsbanki will take place until a new system is in place, a notice from the government states.
The sale of 22.5% of formerly state-owned bank Íslandsbanki last month through a private stock offering has been harshly criticised by opposition MPs as well as the general public. Several hundred gathered in Austurvöllur square last Friday to protest the way the sale was handled. One of the speakers at the event, Pirate Party MP Halldóra Mogensen, called on Minister of Finance Bjarni Benediktsson to resign.
Insiders make short-term profit
The government has been criticised for the share offering’s lack of transparency, and for the 5% discount buyers received on the shares’ market value, despite high demand for the shares. Many have also criticised the fact that smaller, short-term investors were permitted to take part in the sale, and that Íslandsbanki staff and staff of the consulting company that managed the sale were among the investors.
While the government’s stated aim for the share offering was to attract long-term investors, shareholder lists revealed that many smaller investors sold their shares in the bank just days after the sale, for a significant profit. The list of purchasers included a holding company owned by the Finance Minister’s father.
Government ministers lay low
Government ministers have refused interview requests from reporters over the past week to discuss the sale of the bank. The government notice released today states that “It is clear that the implementation of the sale did not fully live up to the government’s expectations, e.g. on transparency and clear dissemination of information.”