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Kaupthing Leak Exposes Loans

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http://www.telegraph.co.uk/finance/newsbys...oses-loans.html

Kaupthing, the bank at the heart of the Icelandic financial collapse, lent billions of pounds to companies linked to a key director and top shareholders, according to leaked internal documents.

The papers appear to cast light on Kaupthing's highly unusual lending practices just two weeks before the Icelandic system failed last October, wiping out millions of pounds of savings deposited by UK local authorities and charities.

It reveals that its highest loans, totalling more than €6.4bn (£5.45bn), was given to companies connected to just six clients, four of whom where major shareholders in the company. Kaupthing granted some of these loans with partial or no collateral, the largest of which was given to Exista, its biggest shareholder with a 22pc stake.

The bank, which had a huge retail depositor base in the UK, was also lending millions of pounds to individuals and holding companies so that they could buy shares in Kaupthing itself – effectively propping up its own share price.

It is understood that the 205-page document, published on the internet over the weekend, was presented at an internal meeting at Kaupthing on September 25 last year. It details the loans to companies and high-profile individuals such as Kevin Stanford, Robert Tchenguiz, the Candy brothers and Simon Halabi.

Among some of the bank's biggest borrowers, were companies connected to:

* Lydur Gudmundsson, who founded the Bakkavor food empire that employs 20,000, many in the UK. Mr Gudmundsson, who sat on the board of Kaupthing and Exista, was granted loans worth €1.86bn for companies linked to him and his brother, Agust. One note detailing a €791.2m loan to Exista itself admits that "bulk of the loans are unsecured and with no covenants".

* Robert Tchenguiz, the London-based property entrepreneur and board member of Exista, was loaned €1.74bn to finance his private investments. Last night, Mr Tchenguiz confirmed that he had been the bank's biggest client, but declined to comment further.

* Kevin Stanford, the retail entrepreneur and director of House of Fraser, who emerges in the document as Kaupthing's fourth largest shareholder. He was given a €519m loan to buy shares – of which €181m were in Kaupthing itself, using those same shares as collateral.

There is no suggestion that any of the shareholders acted illegally.

Tony Shearer, who was chief executive of the 100-year-old British bank Singer & Friedlander when it was taken over by Kaupthing in 2006, expressed his deep concern that the Financial Services Authority had not examined the Icelandic bank's books more carefully.

It would appear that Kaupthing business practices where on the level of Robert Maxwell, if the above is accurate.

Once again the FSA appears to have been asleep at the wheel and not doing it's job. Thank god it didn't do negativity, just think of the mess we would be in now!

I wonder if anyone will end up in jail over this?

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http://www.telegraph.co.uk/finance/newsbys...oses-loans.html

It would appear that Kaupthing business practices where on the level of Robert Maxwell, if the above is accurate.

Once again the FSA appears to have been asleep at the wheel and not doing it's job. Thank god it didn't do negativity, just think of the mess we would be in now!

I wonder if anyone will end up in jail over this?

Anyone who complains or protests.

FSA and our Govt. are owned by these and similar.

We should shut down all foreign banks operating in the UK. They bring us no benefits whatsoever. Just criminality.

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