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Panama Papers Reveal Tortola Connections of Iceland’s Richest Men

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Panama Papers Reveal Tortola Connections of Iceland’s Richest Men

Björgólfur Thor Björgólfsson.

Björgólfur Thor Björgólfsson. Photo: Geir Ólafsson.

An article in Stundin today reveals the connections of father and son Björgólfur Guðmundsson and Björgólfur Thor Björgólfsson to offshore companies.

Björgólfur sr. is the former chair of the board of Landsbanki and used to be the bank’s largest shareholder.

The article focuses first on the company Ranpod LTD, registered in the tax haven Tortola by the Panama law firm Mossack Fonseca and owned by Evelyn Bentína , Björgólfur sr.’s daughter. Both Björgólfur and his son Björgólfur Thor were authorized signatories of the company, which was founded in July of 2008, a few months before the financial crisis. All of this was revealed in the Panaman Papers, a leak of more than 11 million documents from the Panama law firm Mossack Fonseca.

In July of 2009, when Björgólfur sr. declared a personal bankrupcy, his debts exceeded his assets by ISK 100 billion (USD 800 million, EUR 716 million).

Investing in companies in tax havens is not illegal, as long as their earnings and assets are declared on tax returns. Registering companies in a tax haven does, however, offer certain secrecy for the investors, since neither the ownership of such companies nor their annual reports or business dealings are public.

The Panama Papers suggest that Ranpod LTD is still in operation, and in 2014, Evelyn Bentína was registered as its sole owner. She claims the company is no longer in operation and declines to reveal why it was established. A spokesperson for Björgólfur Thor claims he has no knowledge of the company and is, therefore, unable to provide any information about it. She states that it has never been owned by Björgólfur Thor and, thus, he has no authority to provide any information about it.

Father and son, Bjögólfur and Björgólfur Thor, have connections to at least 50 offshore companies in tax havens, established through Mossack Fonseca. They are by far the largest Icelandic investors mentioned in the Panama Papers. Documents in the Panama Papers regarding them go as far back as 2001, when they owned a brewing company in St. Petersburg in Russia, along with Magnús Þorsteinsson. They sold the company to Heineken in 2002 and bought a majority stake in Landsbanki, which they owned up to the financial crisis in 2008. Before they purchased their stake in the bank, they were, thus, already using companies founded through Mossack Fonseca.

Not surprisingly, it was Landsbanki that had Mossack Fonseca establish most of the companies connected to Icelanders in tax havens, as revealed by the Panama Papers. In fact, Landsbanki was Mossack Fonseca’s sixth largest client worldwide, and the law firm established 400 offshore companies for the bank. The companies were or are owned, directly or indirectly, by the father and son, sometimes through other companies, or companies they directed without owning them. Of the two, Björgólfur Thor is a much larger user of the offshore companies, being one of Iceland’s largest investors. He has, again, become the country’s richest man, estimated last year to own ISK 173 billion (USD 1.4 billion, EUR 1.2 billion). Forbes includes him on a list of the world’s wealthiest individuals.

The most striking information obtained through the Panama Papers is the size of loans their companies were granted by Landsbanki Luxemburg, which was a subsidiary of Landsbanki, in which they held a majority stake. Moreover, there were numerous loans granted between their offshore companies. Björgólfur sr. also granted the Tortola company Bell Global Investments a ISK 2.7 billion (USD 22 million, EUR 19 million) loan in 2003.

The Special Investigation Commission of Alþingi, the Icelandic parliament, knew of some such loans, but possessed very limited information about them. Those were several loans in the billions of ISK.

The most interesting examples of such loans are those given by Landsbanki Luxembourg in 2004 and 2006 to the Tortola company Edda Printing and Publishing Limited. One amounted to almost ISK 2 billion (USD 16 million, EUR 14 million) and the other almost ISK 1.6 billion. Those were never paid back. Björgólfur sr. was one of the company’s authorized signatories. Similarly, a ISK 1.1 billion loan granted by Landsbanki, Luxembourg to Brimalda Capital Limited on Tortola, of which Björgólfur sr. was an authorized signatory, was never paid back.

The large picture obtained of the Björgólfur father and son’s finances is that amounts in the tens of billions of krónur were transferred from Landsbanki Luxembourg to dozens of companies connected to them. Some of the loans were never paid back, and it’s impossible to tell where those amounts ended up.

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