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Iceland Supreme Court: Al-Thani Deal ‘Deception’

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Iceland Supreme Court: Al-Thani Deal ‘Deception’

Supreme Court of Iceland

The Supreme Court of Iceland. Photo: Páll Kjartansson.

The Supreme Court of Iceland concluded in its verdict yesterday when sentencing four former key executives of Kaupþing Bank to prison that Sheik Mohammed Bin Khalifa Al-Thani of Qatar’s acquisition of a five percent share in the bank two weeks before the banking collapse in 2008 was a deception.

In September 2008, the then Kaupþing CEO Hreiðar Már Sigurðsson expressed his content with the trade to RÚV. “I believe it will strengthen the bank. It’s clear that it’s unrealistic for us to obtain much more funding from Icelandic investors. The bank has become so big and if we intend to continue to grow in an international market we must reach international investors.”

In December 2008 the then Central Bank governor Davíð Oddsson reported the deal to the police after receiving a tipoff. In January 2009 RÚV reported that it may have been a deception. Three years later a charge against the Kaupþing four was issued.

It turned out that the sheik had not invested in the bank at all but that Kaupþing had sold the shares to Al-Thani and provided a loan for the entire purchasing price.

The Supreme Court’s unusually harshly-worded ruling stated that the defendants were guilty of “thoroughly organized violations, committed out of determined intention and unprecedented impudence and disregard.”

“The defendants’ conduct … involves a serious breach of trust against a large public limited company, leading to massive loss in funds,” the verdict concluded.

Former chair of Kaupþing Sigurður Einarsson, one of the defendants, said in an interview on RÚV yesterday that “people were judged for who they were but not for what they did.” Sigurður maintained that the bank’s position had not been jeopardized by the Al-Thani deal.

The case has garnered significant attention; the Supreme Court’s website collapsed for 45 minutes at around 5 pm yesterday after the verdict was announced shortly after 4 pm.

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