British fashion mogul Karen Millen has provided many aspiring businesswomen with a suitable look to ascend the heights of corporatism. But questions are now being asked about her role in Byr Savings & Loan in Iceland.
Byr S&L saw the light of day through the merger of Hafnarfjordur’s S&L and the Machinists’ S&L when charter members of the two had sold their shares to a company belonging to Baugur. The mission was to get their hands on the handsome owners equity.
From the Icelandic Weather Report: The biggest bank robbery in the history of Iceland?
The main purpose of A Holding – aka Baugur – appears to have been to gain hold of the Hafnarfjörður Savings Bank, since plans were already underway to merge it with another savings bank – Sparisjóður Vélstjóra, or the Machinists’ Savings Bank [originally founded by machinists who worked on ships]. That merger went through in December 2006 and increased the value of the two banks exponentially in the merged company, which was given the name Byr. Incidentally, those plans were – as yet – completely under wraps, so there was clearly some underhanded trading going on – I presume that is the basis of the aforementioned lawsuit, although based on the info I’ve seen that’s not completely clear.
A year later, or in December 2007, the owners of Byr decided to increase the bank’s initial equity by ISK 26.2 billion. Those who already owned shares in the bank – the stofnfjáreigendur – were invited to increase their investment, and the increase was financed through loans from Glitnir bank – which in turn was largely owned by Baugur.
Four months later, the bank paid dividends to its shareholders – the stofnfjáreigendur – worth ISK 13.5 billion.
Byr lost 29 billion ISK last year but fortunately for them the government’s emergency law allows it to grant S&L’s up to 20% of owners equity as it was at the end of the year 2007.
Recently the disgruntled minority in Byr has been trying to wrangle back control of the S&L but at a general meeting it was revealed that Agust Armann, father of Magnus Armann, one of Baugur’s favorite frontmen had voting rights on the behalf or Karen Millen, through shares that she owned.
Funnily, Millen was nowhere to be seen on the registry of Byr’s charter members. The reason being that she had hid her ownership through Kaupthing Luxembourg which was registered as the owner.
Karen Millen’s former husband Kevin Stanford has been Baugur’s top business-partner in the UK. Her fashion empire was owned by Mosaic Fashion which bought the business from her in 2004 and was registered on the Icelandic Stock Exchange. Mosaic Fashion happened to be majority-owned by…who else but Baugur and it is now part of its bankrupt wreck. Hagar, owned by Baugur operated Karen Millen’s store in Reykjavik.
Jon Gerald Sullenberger has put forth a possible explanation as to why Baugur’s grip on Byr is hard to release. The S&L has refused to declare who are its biggest debtors, claiming bank-secrecy. It is known that 80% of Byr’s loans have been made to 10 individuals or companies.
Could it be that through Byr, Jon Asgeir Johannesson managed to buy 365 media, operators of Frettabladid and Channel 2 when faced with bankruptcy. Everyone was surprised that the bankrupt businessman could stump 1.5 billion ISK to rescue the company without apparantly breaking a sweat.
What does Karen Millen think about her role in these shenanigans? From a statement she is appalled that people are trying to implement her with questionable deals, but the statement issues no explanation of her role.
Another quirky side to the economic disaster that is Iceland.
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