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Issue 729
04-10 OCT 2013
Icelandic bank under legal siege VICTIMS of an allegedly corrupt equity release scheme run by failed Icelandic bank Landsbanki Luxembourg have launched a criminal court action in Spain. by Jack Troughton
Choppers dropped water on the flames
Fire fighting
A FULL scale emergency response was rapidly in place on Tuesday afternoon when fire broke out amongst the trees of Granadella in Javea and successfully tackled the blaze. Pictured is a helicopter releasing water onto the flames below. For the full story go to page 3.
THE BANK – ‘in liquidation’ – and its Spanish agents are accused of fraud, mismanagement and false claims over the selling of the financial product. Landsbanki Luxembourg, its officers and appointed administrator already face criminal charges in France and Luxembourg. In Iceland, home to the parent company, directors and officers who had overall responsibility for the bank face charges of fraud and market manipulation brought by the state prosecutor. The flawed equity release scheme was heavily marketed in 2006, 2007, and 2008, at a time a leading financial advisory company, Merril Lynch, warned of the fragile nature of Icelandic banks – and it is claimed Landsbanki continued to market the product even after it knew the bank was in danger of failing. Victims were promised that as well as releasing cash against the value of their homes, the remainder of the loan would be invested by Landsbanki to pay the interest on the advance and even provide an income in a claimed ‘risk
free’ enterprise - and returns of 9% were promised. It was a form of equity release already outlawed in the UK. Hundreds of vulnerable pensioners living in Spain, France and Portugal – the majority British expats – were left facing financial ruin. It is understood 16 have since died. THREAT In addition they have also had to live under the threat of having properties repossessed by Landsbanki’s “aggressive” administrators after the courts ordered it into liquidation in 2008. Scores of pensioners – their homes at the time of signing up had to worth at least 350,000€ formed the Landsbanki Victims Action Group. Last year there were over 120 members living on the Costa Blanca and Costa del Sol alone. The latest criminal action is being heard by the courts in San Roque – an action in Denia has for the moment stalled because the bank maintains it is a civil rather than criminal matter – and the presiding judge is making a series of investigations. Continued on page 6