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Purchase by German Bank for Appearances Only

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Purchase by German Bank for Appearances Only

Icelandic money

Photo: Geir Ólafsson.

The participation of the German bank Hauck & Aufhäuser in the purchase of a 45.8 percent stake in the Icelandic state’s share of Búnaðarbanki bank in 2003 was only for the sake of appearances, Fréttablaðið reports.

The purchase was funded through an offshore company under the auspices of Kaupþing bank, which merged with Búnaðarbanki a short while later.

This information is provided in data obtained by the Special Investigation Commission (SIC) of Alþingi, the Icelandic parliament, according to the commission’s letter from March 13. The letter states that Hauck & Aufhäuser was “guaranteed indemnity from its participation in this deal.”

The data obtained by SIC show that in the days leading up to the purchase, a group of people was involved in drafting two agreements regarding the shares to be purchased by Hauck & Aufhäuser, one regarding Hauck & Aufhäuser, the other regarding the offshore company Welling & Partners Limited, registered in the Virgin Islands. Those who drafted the agreements were, among others, several employees of Kaupþing in Iceland and in Luxembourg.

The letter states that it doesn’t appear “the Icelandic state or its institutions were at any stage informed about the making of those deals, their content or their effect.”

According to the data, the German bank took “no financial risk” with this deal. Its financial interests were limited to an agreed upon compensation. All expected profit of the shares purchased was reserved for Welling & Partners Limited.

In a letter from Ólafur Ólafsson and other investors, responding tho SIC, they deny that any deception was used toward the Icelandic state.

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