Is KPMG worried?

KPMG should be really worried about their reputation. Or maybe they’re well connected enough to not have so they don’t have to.

Morgunbladid today asks what kind of business ethics are practiced within the walls of KPMG.

The paper yesterday told an unbelievable story of an investor who approached the company for assistance on a business project in Croatia. Through an illegal shareholders meeting, two KPMG employees later shifted ownership towards themselves and an investor who had been a part of the opration. They used connections at the IRS to get the false documents ratified. The head of KPMG in Iceland Sigurdur Jonsson was aware of and approved this.

The same Sigurdur Jonsson who is the father of Jon Sigurdsson, CEO of FL Group. Remember the outcry when KPMG was supposed to investigate the crash of Glitnir. The same Glitnir that was so intertwined with FL Group that you could hardly see the difference.

And of course behind those companies was Baugur, whose accountant was Stefan Hilmarsson at…KPMG, who was found not guilty for his part in the criminal case against Baugur last year. Tryggvi Jonsson who was found guilty was a former owner of KPMG Iceland. Another of KPMG’s accountants was accused in a big tax-fraud case against a former owner of 365 media, now owned by Jon Asgeir Johannesson.

Is Ben van der Veer sitting quietly in his office in the Netherlands? Are his shareholders worried about the company’s involvement in the financial collapse of Iceland?

Robin Hood in reverse

Egill Helgason gets it spot on.

Icelanders are taking the debts of the rich and giving it to the poor.

When the fishing quota system was initiated the quota was handed to selected fisheries, amongst them fisheries owned by members of parliament, who did not have to pay a single krona for it. They then created a market for the fishing quota and became billionaires. In time, those who bought the quotas learned how to leverage it to finance entry into a different game, investments. It is now leveraged three times the worth of the annual catch, in many cases in foreign currencies.

And now the fisheries want their debts annulled. To save the industry of course.

The industry they have toyed with mercilessly, leaving former prosperous ports without hesitation, leaving them to rot and decay. The industry they have cheated by employing cheap foreign labor, flags of convenience and hiding profits in tax shelters.

No wonder those captains of industry are amongst the strongest opponents of Iceland joining the EU. They would have to play by rules that don’t revolve around their own behinds.

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Dumping liabilities onto taxpayers could be a profitable business. Two of Kaupthing’s former CEO’s have formed a company that will help you negotiate with the banks to cancel debts. It could lead to absurd situations like ones where they enter a conference room with a massively indebted individual who they granted the loans to in the first place. And on the other side of the table are their former assistants who processed the loans in the first place and were much better paid for than now by the state.

Absurd? Yes. But obviously a growing business, that’s what Sigurjon Arnason and Tryggvi Jonsson are doing in Landsbankinn.

Broken roadmap

Normally the University of Iceland recieves around 200 applications this time of year. Now it is 1.600.

Many who applied are unsure whether they will receive a place.

The economic geniuses that are the government of Iceland have announced the new heftily deficited budget and there are cuts for the universities that are expecting record turnouts, as well as cuts for the student loan organizations.

At a time when people cannot get a job and are prepared to use the downturn to educate themselves so that they will bounce back stronger, more educated the government and parliament are more inclined to push those people onto unemployment benefits.

A broken roadmap for the future.