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Changes at FL Group?

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Changes at FL Group?

"Three directors resign from the board of FL Group" reads a prominent headline on the cover of daily Morgunblaðið today. The main headline is followed by two smaller ones, "Hannes Smárason, Chairman of FL Group, comes under criticism" and "Notice of shareholder meeting in one week's time to be issued today."

FL Group, formerly known as Flugleiðir or Icelandair, trades on the Icelandic Stock Exchange under the symbol FL. It is a holding company with interests in several aviation and travel services subsidiaries.

According to Morgunblaðið, the three directors who resigned are: Hreggviður Jónsson, Vice-Chairman of FL Group, CEO of Icelandic pharmaceutical distributor Vistor and an ex-colleague of Hannes's from the consulting company McKinsey; Árni Oddur Þórðarson, a partner in the investment company Eyrir; and the politician Inga Jóna Þórðardóttir who serves on the Reykjavík City Council on behalf of the Independence Party and who is married to the Minister of Finance, Geir H. Haarde.

Eyrir has recently sold its 3 per cent stake in FL Group, and none of the three directors ranked among the top 30 shareholders in FL Group according to the most recent shareholder list, published on the Icelandair website on June 27.

According to Morgunblaðið, the second largest owner of Icelandair, Saxbygg (which Morgunblaðið misspells as "Saxsteinn") decided to sell its 26 per cent stake in Icelandair after Hannes Smárason came under certain undisclosed criticism from his colleagues on the board of directors for his execution of his duties as Chairman. Saxbygg is jointly owned by construction company and real estate developer Bygg and investment company Saxhóll.

According to Morgunblaðið, the buyers of the 26 per cent stake include several shareholders of Mosaic, among them Kevin Stanford, former husband of Karen Millen, Jón Ásgeir Jóhannesson, CEO of Baugur Group, and Jón Ásgeir's partner Ingibjörg Pálmadóttir, interior designer and owner of 101 Hótel in Reykjavík. Hannes Smárason is also buying 5 per cent out of the 26 per cent that Saxbygg owned, bringing his share of FL Group up to 35.5 per cent.

Yesterday we reported that Hannes Smárason and Jón Ásgeir Jóhannesson had just purchased a stake in Íslandsbanki (see Iceland Review, Daily News, June 30, 2005, "Viking invaders buy shares in bank on home turf"). According to the report in Morgunblaðið today, when it comes to FL Group they are also working closely together.

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