Rtn north edition 747

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NORTH EDITION

Your English Newspaper

roundtownnews.com

Issue 747

07-13 FEB 2014

Bank chiefs indicted by Jack Troughton

Imagine...

Scores of balloons were released

by Jack Troughton CALPE SCHOOLCHILDREN marked the International Day of Peace last Thursday by releasing scores of white balloons carrying the youngsters’ messages of hope into a bright blue sky.

FIVE SENIOR executives of the failed Icelandic bank have been indicted for fraud to the delight of victims of an allegedly corrupt equity release scheme run by the finance house. Three former Landsbanki Luxembourg chiefs – the “predatory” subsidiary running the flawed scheme – were indicted in Paris following an investigation into an alleged scam over the loans. And two former chief executives of the collapsed parent bank in Reykjavik have been indicted for putting Landsbanki at risk by guaranteeing loans without sufficient insurance. Iceland’s banking system nosedived at the start of the credit crunch following the collapse of Lehman Brothers in 2008. The same year Landsbanki Luxembourg went into liquidation. And since the move, vulnerable pensioners have faced financial ruin and have been living in fear of having their homes repossessed by administrators. Hundreds of pensioners across Spain, France, Germany and Portugal, took out loans under a heavily marketed equity release scheme between 2006 and 2008. It is believed there are between 400 and 600 victims “going through an absolute nightmare” who have yet to contact the action groups on the Costa Blanca and Costa del Sol.

Victims, said to be asset rich but cash poor, were promised that as well as allowing them a drawdown of up to a quarter of the value of their homes, the remainder of the loan would be invested to pay the interest of the advance – and even provide an income in a “risk free” scheme. Returns of 9% were promised but never materialised. At the time top financial advisors Merrill Lynch was already warning of a fragile nature of Icelandic banks. Landsbanki’s form of equity release had already been outlawed in the UK. Following complaints from victims across Europe a criminal investigation was launched into the scheme and in 2011 Landsbanki Luxembourg was indicted “in bankruptcy” for fraud – and ordered to pay a record 50 million Euro bond. The French courts have now turned their attention to the men selling the scheme. The case is expected to involve tens of millions of Euros and could evolve into one of the biggest banking trials ever seen in Europe. The Landsbanki Victims Action Group in Spain currently has over 120 members and has also launched court actions in Denia and San Roque. A spokesman for the victims’ legal team said in the light of developments it was hoped the Luxembourg Appeal Court would overturn the decision of an instructing judge not to open the case and investigate “the more than dubious and criminal actions” of Landsbanki. Continued on page 3

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